Stakeholders in the California commercial real estate market might be interested in learning that Orange County has enjoyed the highest national growth in office rentals over the last two years. Much of the growth in office rentals has resulted from the drive of tech companies to find spaces in submarkets.
According to CBRE Group, the tech industry has had a large impact on office rents because the companies are willing to pay premium prices so that they can get space in hot technology submarkets. This has led to stiff competition in talent-rich tech submarkets such as southern Orange County, which has a very low office vacancy rate.
The CBRE states that tech companies being forced to move into adjacent submarkets to the hottest locations may drive the growth of office rents in those areas as well. Average rents in the top tech submarkets are increasing much faster than the rents for non-tech businesses. The average premiums paid by tech companies in hot tech submarkets is 16.2 percent. Across the U.S., Orange County experienced the largest growth in office rents at 23 percent during the last two years.
Investors who are interested in purchasing office buildings should conduct due diligence before they move forward. Commercial law attorneys who are experienced in handling commercial real estate transactions might help clients identify buildings that are in good areas and likely to provide good profits. The attorneys may conduct market analyses, review the buildings’ rents and vacancy rates and examine any potential issues. Legal professionals may then advise their clients whether the asking prices are good or if the clients should ]negotiate for a lower amount. The attorneys may be able to offer guidance throughout the transaction process in order to help clients avoid legal problems and enjoy higher profits.