. . . While Offices Remain Scarce

Orange County’s office space will remain tight next year, causing lease rates to rise as the economy remains robust through much of 2000, according to a Grubb & Ellis Co. report on next year’s commercial market.

With strong demand for space, vacancy rates will hover around 9.5%, the report said.

Higher prices will force more companies to look for office space in low-rise buildings, a trend that has accelerated over the past two years, as well as in less glitzy cities, which will drive up lease rates in those areas as well.

Although new offices are going up at nearly the fastest rate of the decade, owners of most new buildings have rented the space before the structures are completed, the report said. As a result, developers will put up more “speculative” buildings without lining up a major tenant in advance.

The most likely places for new construction will be the airport area where half of Orange County’s office space is located, the South County areas that already have large amounts of low-rise campus style buildings and the stadium area in Anaheim.

Insurance and accounting firms will be among the companies searching for a new home in Orange County, the report said.

Offices in Demand

Office space in Orange County is expected to remain tight next year. County vacancy rates.

‘93: 17.2%

‘00: 9.5%*

*Projected

Source: Grubb & Ellis Co.