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Commercial tenant growth skyrockets in Orange County

It is a good time to be a landlord in Orange County. The area has seen the highest increase in commercial tenant growth in the United States. In the last two years, the rental market has increased by a staggering 23 percent. Rents have gone up as well.

Why is there such a large rise in rental income for commercial building owners in Orange County? The tech industry has run out of room for its operations in the usual places. As technology continues to advance, and the demand for it continues to rise, tech companies continue to grow, and they need a place to work. These companies are willing to pay premium rental rates for office space.

The demand has reached the point where tech companies are willing to forgo having their own buildings and are willing to take up one or more floors in a traditional office building. Of course, supply and demand tend to fluctuate in any market, including the commercial real estate market. Those investing in commercial real estate often understand this and like to "strike while the iron is hot," so to speak. Of course, tech companies may be willing to pay a premium for the right space, but they are probably not going to just agree to any terms either.

Negotiating a lease agreement with a commercial tenant -- even one willing to pay top dollar -- still requires an understanding of the business and legal aspects of the landlord/tenant relationship. It may not be a good idea to enter into negotiations for a lease agreement without a clear understanding of each party's rights and responsibilities. In addition, negotiating terms with which each party can be satisfied may take some time, effort and reading of the fine print.

Source:, "Orange County California Enjoys Highest Office Rent Growth in U.S. Over Last Two Years at 23 Percent", Michael Gerrity, Nov. 16, 2017

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