Categories: Business NewsNewsReal Estate & Properties

Orange County Ranks Seventh in Office Space Conversion

Transformation of office spaces into residential units in Orange County showcases the evolving real estate landscape.

News Summary

Orange County has achieved a significant ranking, coming in seventh nationally for office space designated for conversion or demolition. According to a recent CBRE report, the county has 26 projects, totaling 4.2 million square feet, planned or underway for this purpose. The trend highlights a shift in the commercial real estate landscape, with demand for residential spaces on the rise amid changing needs following the pandemic. One noteworthy conversion project involves transforming an office building into townhome-style units, underscoring the proactive approach of Orange County in adapting to market demands.

Orange County has achieved a notable ranking, coming in seventh nationally for office space designated for conversion or demolition, as reported in a recent analysis by CBRE released on June 9. This development reflects a shift in the real estate landscape where for the first time since at least 2018, more office spaces are being removed than added across the United States.

According to the CBRE report, there are currently 26 projects in Orange County involving a total of 4.2 million square feet of office space that are either planned or underway for conversion or demolition. Among these, only one project named OCVibe is actively in progress this year, and it aims to expand office space when it becomes operational.

Race for Residential Development

In a sign of growing demand for residential spaces, 19 multifamily projects are being considered in Orange County. One notable conversion involves turning a 111,483-square-foot office building located at 2020 E. First St. in Santa Ana into 86 townhome-style units, a project spearheaded by Meritage Homes.

National Context

CBRE’s comprehensive analysis covered 58 markets across the United States, revealing that a total of 23.3 million square feet of office space is set for conversion or demolition by the end of 2023. This increasing trend highlights a growing need to adapt existing real estate to meet current housing demands.

The report indicates that Manhattan continues to lead the national ranking with the highest amount of space earmarked for conversion, totaling 10.3 million square feet, which represents 2.5% of its overall inventory for the year. Other major metropolitan areas listed in the top 10 include:

Washington, D.C. – 9.2 million square feet (2.7%)
Houston – 6.7 million square feet (3.2%)
Chicago – 4.8 million square feet (1.9%)
Dallas-Fort Worth – 4.4 million square feet (2%)
New Jersey – 4.2 million square feet (2.8%)
Orange County – 4.2 million square feet (4%)
Atlanta – 3.6 million square feet (2.4%)
Phoenix – 3 million square feet (2.8%)
Cleveland – 2.8 million square feet (8.4%)

Summary of Trends

This shift in office space conversion signifies a larger trend in the commercial real estate market, as cities grapple with the changing needs of their populations and the evolving workforce landscape, particularly following the impacts of the pandemic.

As offices remain underutilized and the demand for housing increases in urban areas, Orange County’s position within this ranking illustrates its proactive approach to redevelopment that aligns with current trends in residential demand.

Overall, the results of the CBRE report not only highlight the economic conditions influencing real estate decisions but also forecast the potential transformation of urban landscapes in the months and years ahead.