Last Updated: October 2025 | Reading Time: 7 minutes | Author: KEYZ Commercial Real Estate Advisory Team

Updated July 31, 2026 with Q2 2026 market data.

Orange County office is recovering, but not evenly, and not in the way most market commentary describes it. Vacancy is falling, absorption has turned positive, and almost no new supply is coming. Meanwhile the best buildings in the county have more availability than the worst ones, which is the opposite of how office markets normally behave.

For a tenant, that combination is unusual and it is temporary. Here is what the current data actually shows.

Where the market stands

Using Kidder Mathews’ Q2 2026 Orange County office report as the reference point:

Direct vacancy: 10.9%, total vacancy including sublease 11.9%
Average asking rent: $2.94/SF/month, full service gross, up from $2.78 in Q4 2025
Net absorption: positive 54,420 SF in Q2, and positive 324,936 SF year to date
Under construction: 216,000 SF in the entire county

Cushman & Wakefield puts the year-over-year improvement at 340 basis points of vacancy compression. CBRE reports availability falling 150 basis points quarter over quarter to 18.0%.

Read the vacancy number carefully

This matters more than it sounds. For the same quarter, the major brokerages report Orange County office vacancy at 11.9% (Kidder Mathews), 13.3% (CBRE), and 14.4% (Cushman & Wakefield). Newmark had it at 16.1% at the end of 2025.

None of them is wrong. They track different inventory sets. Kidder excludes much of the single-tenant and owner-user stock; Newmark tracks the broadest base. A 4.2 point spread on the same market in the same quarter is simply what happens when definitions differ.

Two practical consequences. First, when a broker quotes you a single precise vacancy figure without naming the source, they are choosing the number that supports their argument. Ask which report it came from. Second, comparisons only work within one source. Do not measure a CBRE submarket figure against a Kidder county figure.

The Class A inversion

This is the most useful thing in the current data and it gets almost no attention.

In Kidder’s Q4 2025 report, Class A direct vacancy was 16.4% while Class C was 4.3%. Cushman’s Q2 2026 numbers show the same pattern in rents: Class A at $3.12/SF/month FSG against Class B at $2.50.

The premium space is the available space. Commodity space is tight. That inversion happened because the flight to quality pulled tenants out of older buildings and into better ones, leaving newer product with the vacancy and older product effectively full.

What that means if you are looking: the negotiating leverage is in Class A, not in the cheap buildings. A tenant who assumes they must trade down to get a deal has the market backwards. There is roughly 2.0 million square feet of sublease space available in the county, much of it well-improved Class A that a departing tenant built out and never fully used.

Submarkets, with real numbers

Q2 2026 direct vacancy and average asking rent, per square foot per month, full service gross (Kidder Mathews):

Tustin: 0.6% vacancy, $2.42. The tightest submarket in the county by a wide margin. Effectively no options.
Santa Ana: 7.7%, $2.51. Tight and the best value in the county. Positive absorption of 58,981 SF in Q2.
Newport Beach: 10.2%, $3.93. The most expensive, and tighter than county average.
Irvine Spectrum: 11.3%, $3.01.
Costa Mesa: 11.8%, $3.39. Strong quarter with 79,264 SF absorbed.
Airport Area: 12.6%, $3.23. Absorbed 175,722 SF in Q2, the most active submarket in the county.
Irvine / Tustin Legacy: 13.3%, $3.14.
South Santa Ana: 19.9%, $2.62. The softest submarket, and where the deepest concessions are.

The spread between Tustin at 0.6% and South Santa Ana at 19.9% is the real story. “Orange County office vacancy” as a single number tells you almost nothing about what you will encounter in a specific search.

Supply has stopped, and that is the clock on this

There are 216,000 square feet under construction across all of Orange County. For a market with roughly 100 million square feet of inventory, that is close to nothing.

The two projects that matter: Advantech at 108,942 SF delivered in June 2026, and The Weave at ocV!BE at 168,137 SF, which does not deliver until November 2028.

Run that forward. Absorption is positive and running above 320,000 SF year to date. Essentially no new supply arrives before late 2028. If demand holds anywhere near its current pace, the availability that exists today gets absorbed without replacement.

That is the argument for acting sooner rather than later, and it is a supply argument rather than a sales pitch. It also comes with a caveat worth stating: absorption has been uneven quarter to quarter. CBRE recorded negative 117,000 SF in the same quarter Kidder recorded positive 54,420 SF, again because of different inventory sets. The trend is up. The path is not smooth.

What tenants should do with this

Look at Class A first, not last. The inversion means better buildings carry more availability and more landlord flexibility than commodity space. Start at the top of the market and negotiate down.

Check sublease before direct. Two million square feet of sublease space is available countywide. Sublease often comes already improved, at a discount, from a tenant motivated to stop paying for it. The tradeoffs are a shorter term and less control, but for a business that wants flexibility that can be a feature.

Pick your submarket on data, not reputation. Santa Ana at $2.51 with 7.7% vacancy and Newport Beach at $3.93 with 10.2% are very different propositions. If your business does not need the Newport address, the same budget buys substantially more space eight miles inland.

Negotiate improvements, not just rent. In a market where landlords want to hold headline rents, concession packages are where movement happens. Improvement allowances and free rent periods are more negotiable than face rate.

Think about your renewal now if it is inside 24 months. Given the supply picture through 2028, waiting until six months before expiration means negotiating in a tighter market than today’s.

How we think about clusters

We group Orange County office into a few working clusters when advising tenants: the Airport Area, the Irvine Spectrum and Tustin Legacy corridor, the Costa Mesa and South Coast area, and North County. That is our own framing, useful for talking about talent pools and amenities, and it is worth being clear that it is not a standard.

Research firms use their own submarket taxonomies, and they do not agree with each other or with ours. When you see a vacancy figure attached to a cluster name, check whether the firm cited actually reports that geography. Frequently they do not, and the number has been borrowed from a different boundary.

The underlying submarket data above is Kidder Mathews’ geography, reported as they define it.

Key takeaways

Orange County office vacancy is 10.9% direct, 11.9% total per Kidder Mathews Q2 2026, with asking rents at $2.94/SF/month FSG.
Reported vacancy ranges from 11.9% to 14.4% across major brokerages for the same quarter. Always ask which source a number came from.
Class A has more vacancy than Class C. The leverage is in the better buildings, not the cheaper ones.
Submarkets range from Tustin at 0.6% to South Santa Ana at 19.9%. The county average describes almost no one.
Only 216,000 SF is under construction, and the larger project does not deliver until November 2028.
Roughly 2.0 million SF of sublease space is available, often improved and discounted.

Looking for space in Orange County?

We represent tenants across Orange County, Los Angeles and the Inland Empire. We will tell you which submarkets fit your budget and headcount, what concessions are realistic in the current market, and when the honest answer is that your existing space is the better deal.

Get in touch or browse our current listings.

Sources

All Orange County office rents quoted per square foot per month, full service gross, the standard local convention. Vacancy and rent figures differ between research firms because each defines the tracked inventory differently; comparisons should be made within a single source. Data current as of Q2 2026.

Orange County Office Market: A Tenant Guide to Q2 2026