Orange County’s Office Market Tightens: Trends and Insights for 2026

As we transition into 2026, Orange County’s office market is undergoing significant transformations, primarily influenced by a tightening supply rather than a surge in tenant demand. According to Savills’ Q1 2026 Market in Minutes report, the area’s overall office availability has plummeted to 19.1 percent—the lowest figure recorded since 2020 and marking a 340-basis-point decline year over year. This decrease correlates with a substantial reduction in office inventory, plunging by four million square feet since 2023, which is reshaping the landscape of Orange County’s commercial real estate.

Despite the apparent scarcity of available office space, leasing activity during the first quarter of 2026 remained robust, totaling 1.3 million square feet. This activity is consistent with historical trends, with leasing levels fluctuating between 1.0 million and 1.3 million square feet over the last three years. Most of the leasing activity has been concentrated in submarkets like the Airport Area and the Irvine Spectrum, with smaller lease transactions predominating. These developments underscore a critical shift in tenant needs and priorities, as they navigate the changing dynamics of the office market.

Looking deeper into the submarkets, all areas—except the South and Central Counties—have reported declines in office availability. North County leads the way with the tightest availability at 15.5 percent, followed closely by the Irvine Spectrum at 15.7 percent. With office availability rates still hovering higher in certain areas, landlords are increasingly focused on attracting tenants through enhanced services and competitive offers. The recent trend of reduced sublease space, which fell by 13.8 percent from the previous quarter, indicates an overall tightening within the market where tenants are becoming more decisive in their office space selections.

Tenant demand illustrates signs of stabilization as businesses gain confidence in their operational frameworks. Data indicates that the return-to-office activity in Irvine has reached a commendable 70 percent recovery rate as of January 2026. This resurgence aligns well with the rise in average asking rents, which increased to $2.84 per square foot per month—up 1.8 percent from the previous year. In this competitive environment, landlords are implementing concessions and tenant improvement allowances to attract potential occupiers, maintaining a delicate balance between stable asking rates and enhanced tenant offerings in light of current financial constraints.

Notably, the first quarter of 2026 saw a diverse range of leasing activity across sectors. Major transactions included significant leases from firms in financial services, technology, and life sciences. The largest lease of the quarter—65,583 square feet by Pathway Capital Management—highlights this trend. Additionally, several noteworthy leases in the Airport Area reflect a range of industries looking to establish or expand their presence. This varied mix emphasizes that while the supply side of the market is contracting, demand persists across different sectors, promoting a healthy leasing environment.

With limited new developments on the horizon, the supply constraints are likely to become the defining feature of Orange County’s office market. According to Savills, only two significant projects are currently expected to contribute additional office space—the OCVIBE development in Anaheim and a build-to-suit in Tustin. With ongoing redevelopment activities further limiting inventory, experts anticipate that the availability rate will continue to drop further. This evolving landscape calls for well-capitalized landlords to adapt their offerings to tenant preferences and needs to maintain leasing momentum.

In summary, as Orange County’s office market navigates these transformative changes, stakeholders must remain vigilant. With tightening availability, stable yet competitive rental rates, and a promising return-to-office trend, the next few years will be crucial for both landlords and tenants as they adapt to an ever-evolving business environment. Understanding these dynamics will be essential for anyone engaged in Orange County’s commercial real estate, offering opportunities amidst challenges in this shifting landscape.