Orange County, California – USA
Unquenchable demand has sparked a transformation in the Orange County commercial real estate landscape, from low-density suburbia to pockets of high-density urbanization. The investment market has been a driving force in Orange County based on the global outpouring of capital from traditional equity markets into real estate. These factors will ultimately affect not only the commercial real estate industry but, on a broader scale, how and where people live, work and find recreation.
Orange County is ripe with commercial real estate investment opportunities. Beyond the dot-com crash, low interest rates have driven capital traditionally earmarked for the stock market into the realm of commercial real estate. Private and institutional investors such as individual entrepreneurs, pension funds and REITs continue to blanket Orange County’s five commercial real estate submarkets in search of all product types, whether industrial, retail, office or multi-residential.
The challenge in today’s market is finding available product. The shortage of inventory is creating an extreme imbalance in supply and demand, driving property values to unprecedented highs. Cap rates are lower than normal considering today’s soft lease rates and economic uncertainty. These unusual market dynamics have led to multiple offers behind almost every building for sale. Additionally, more investors are liquidating their assets now while the market remains primed for sellers.