This post was originally published on this site
The phrase “Orange County remains strong” can be heard across this year’s list of the region’s top 18 commercial real estate brokerages with local offices.
The group of firms recorded an 6.2% jump to $42 billion in transaction value of sales and leases in 2024, according to Business Journal data.
However, activity wasn’t high last year. Total leases in 2024 inched up less than 1% to 9,940 while the number of 2024 sales fell 7.7% to 3,401.
“Land and lot values in many markets reached peak pricing, largely related to continued supply constraints in California,” Tom Dallape, principal at The Hoffman Company, told the Business Journal.
The Hoffman Company, ranked No. 13, reported a value of $1.2 billion for last year’s leases and sales, a 36% leap from 2023.
“The land market was very strong in 2024 with homebuilders and land developers leading the way,” Dallape said.
Three brokerages reported double-digit increases in transaction value in 2024 and 10 saw transaction declines, including seven in double-digits.
The biggest drop: Voit Real Estate Services, ranked No. 8, decreased to $1.8 billion last year, a 26% decline driven by higher interest rates.
“Our sales and leasing activity decrease was primarily due to the effects of the interest rates on land sales,” Chief Executive Eric Hinkelman said. “Many of the brokers that concentrated on land sales have expanded their focus to include building sales and leasing activity.”
The number of brokers in Orange County grew 4.1% to 903 as of March and the 18 local companies grew their collective OC headcount 1.8% to 1,667.
The number of OC brokers at Seattle-based brokerage Kidder Mathews fell 13% to 34 and the company counts about 20 OC employees in total.
“We’re looking for more people to come join us,” Chief Operating Officer Eric Paulsen said. “We’ve got folks in every discipline, industrial, office, retail. Having that diversification has helped us.”
With an office in Irvine that opened eight years ago, Kidder Mathews reported $482 million in transaction value of leases and sales for 2024 – up 21%.
“As you see transactions happening, you also have a lot of wealth in Orange County that’s investing in real estate and comfortable investing in real estate,” Paulsen added.
Picking Up Steam
The “OC real estate outlook is positive with several sectors picking up steam with big significant increases in office leasing, date centers and capital market sales,” Kurt Strasmann, executive managing director at CBRE Group Inc., ranked No. 1, said.
The brokerage reported $8.6 billion in value of 2024 transactions, increasing 13% compared to the year before. It recorded 1,475 leases and 247 sales last year, up 2.1% and 4.2%, respectively.
“CBRE continues to reinvest capital into technology, business infrastructure and diversified platform resources to stay in front of the market and take advantage of growing sectors,” Strasmann said.
The No. 18 ranked Avison Young fell 8.8% with $261 million in transaction value last year. Principal and Director of Brokerage Services, OC Keith Kropfl pointed to the office market’s resilience in the face of economic headwinds, adding that “the region’s growing residential appeal has reinforced office demand,” and the industrial sector has a strategic location near Los Angeles and the Inland Empire.
“Orange County’s commercial real estate market remains a stronghold of stability and growth, outperforming many urban centers like downtown Los Angeles,” Kropfl said. “With a combination of suburban appeal, high office utilization rates and strong industrial fundamentals, the region continues to attract occupiers and investors seeking long-term opportunities.”
Hoffman’s Dallape added: “We are always looking at what uses are obsolete and changes in the market trends to create new opportunities. Many of the sites we are working on today had a different business plan 24-36 months ago.”
For Kidder Mathews, stability is important no matter the interest rates.
“What we’re seeing is more commitment from the market to do longer-term transactions,” COO Paulsen said. “I just need to know that’s where they’re going to be for the next three, five, seven, 10 years, because then I know the rules of the game, and I can play.”