The Orange County medical office market demonstrated steady growth in Q2 2024, supported by rising healthcare employment and sustained demand for medical office space. With stable leasing rates, positive absorption, and an active development pipeline, the market remains a strong choice for healthcare providers and investors alike.

Market Overview: Key Trends in Q2 2024

1. Strong Healthcare Employment Growth

Healthcare continues to be a major economic driver in Orange County, with employment reaching 171,600 jobs in May 2024—a 1,600-job increase quarter-over-quarter and a 5.9% year-over-year rise. This steady job growth reinforces demand for medical office space as providers expand their operations.

2. Stable Leasing Rates

The average asking lease rate held firm at $2.82NNN\; per\; sq.ft.permonth,unchanged\; fromQ1\; 2024.TheGreaterAirportAreacommandedthehighestaverage\; rateat$3.26 NNN per sq. ft., while Central Orange County led in net absorption with 18,088 sq. ft. leased.

3. Positive Absorption Continues

Orange County recorded 32,750 sq. ft. of total net absorption in Q2, marking the fourth consecutive quarter of positive demand. Vacancy and availability rates remained steady, indicating a balanced market with consistent tenant activity.

Development Pipeline: New Medical & Healthcare Projects

The second quarter saw significant construction activity, with six buildings underway totaling 592,696 sq. ft., including:

• 34,696 sq. ft. of medical office space

• 558,000 sq. ft. of hospital-based developments

Upcoming Deliveries & Planned Projects

• 228,000 sq. ft. of new medical office space in planning stages

• 448,416 sq. ft. of assisted living facilities proposed

• Helen Calogerro Women’s & Family Center (137,000 sq. ft.) delivered in early Q2

• 196,996 sq. ft. of additional medical space expected by year-end

What This Means for Tenants & Investors

• Tenants: Stable lease rates and new developments provide opportunities for expansion or relocation.

• Investors: Strong demand and limited new supply in certain submarkets support long-term value.

• Developers: Continued interest in healthcare-related projects signals sustained growth in the sector.

Looking Ahead

With healthcare employment rising and development activity accelerating, Orange County’s medical office market remains resilient. Leasing activity is expected to stay steady, while new projects will help meet growing demand from providers.

For the latest listings and market insights, visit Orange County Medical Space.