OC’s Mid-Year Market Update: Resilience and Opportunity | June 2026
As we reach the midpoint of 2026, Orange County’s real estate market continues to demonstrate the resilience that has long defined our region. While interest rates, shifting workplace dynamics, and economic uncertainty remain factors, certain market indicators across Orange County remain constructive, though conditions vary by sector and may change. Industrial, office, retail, and multifamily sectors are all showing signs of stabilization, based on recently reported market data. As we enter the second half of the year, I wanted to share a brief snapshot of where the market stands today and where I believe it is headed.*
Industrial Continues to Rebound
Orange County’s industrial market is showing renewed momentum. Direct vacancy remained stable at 5.7% during the first quarter, while leasing activity exceeded 1.57 million square feet and net absorption returned to positive territory. Although rental rates have moderated, investor demand continued during the period, with average sale prices reaching approximately $308 per square foot. As new development slows and available inventory is absorbed, the sector appears well-positioned for continued stabilization.
Office Market Shows Signs of Progress
The office sector continues to adapt, but certain first-quarter metrics showed improvement. Vacancy declined to 11.3%, below year-ago levels, while leasing activity reached approximately 1.6 million square feet. Demand remains strongest for high-quality office environments, and the ongoing conversion of older properties to alternative uses is helping reduce excess supply. The Airport Area of Newport Beach continues to be a focal point for investment activity, highlighted by several significant sales transactions during the quarter. We are seeing the same momentum at Shopoff’s Waypoint Newport office condos, which have experienced several sales over the past few months and are now more than 67% sold. Together, these trends suggest the office market is steadily finding balance as occupiers refine their long-term workplace strategies and investors pursue well-located, high-quality properties.
Retail Demonstrates Stability While Major Redevelopment Opportunities Emerge
Retail fundamentals remained stable during the period, supported by strong consumer activity and limited new supply. Vacancy remained low at 4.0% during the first quarter, while asking rents increased to $2.68 per square foot per month. One of the quarter’s most notable transactions was Shopoff’s acquisition of the Westminster Mall, a project we are proud to be leading. Our vision is to transform the site into Bolsa Pacific, a vibrant mixed-use community that combines housing, retail, dining, entertainment, and public spaces, that better serve the future needs of Westminster and Orange County.
Multifamily Benefits from Strong Demand
Multifamily remains an active sector within Orange County. Vacancy held at just 3.9%, while average rents increased to $2,688 per unit, and sales prices rose year over year. Continued housing demand, coupled with limited supply and unattainable home ownership, supports strong long-term fundamentals. The firm has seen this demand firsthand through Shopoff’s own residential communities like One Uptown at Uptown Newport Village, which continue to provide much-needed housing options throughout the region. Looking ahead, Shopoff is advancing several additional residential developments, including Bolsa Pacific, Euclid + Heil, 5600 Beach Blvd, and Magnolia Coast. Many of these projects incorporate affordable housing components, helping address Orange County’s critical housing shortage while creating vibrant, thoughtfully planned communities. Even as new projects deliver over the coming years, the imbalance between housing supply and demand is expected to remain a key driver of multifamily performance.
Looking Ahead
Orange County continues to stand out as a historically resilient real estate market. Industrial, office, and retail appear to be stabilizing, while multifamily continues to benefit from strong demographic trends. Challenges remain, but the long-term outlook for our region is positive, and we are optimistic about the opportunities ahead. These dynamics are unique to Orange County’s market fundamentals; however, while Shopoff maintains a meaningful presence in the region, our portfolio is diversified across California and other states, positioning us to capitalize on opportunities in a variety of markets.
Disclosures
*Market data sourced from Kidder Mathews Orange County 1Q 2026 Market Reports, https://kidder.com/orange-county-market-reports/.
This communication is provided for informational and educational purposes only. The views and opinions expressed herein are those of the author as of the date of publication and are subject to change without notice. Past performance is not indicative of future results. This is not an offering to buy or sell any securities. Such an offer may only be made through the offering’s memorandum to accredited investors. Any investment in Shopoff Realty Investments (“SRI”) programs involves substantial risks and is suitable only for investors who have no need for liquidity and who can bear the loss of their entire investment. The performance of former assets is not indicative of the future results of other assets. Securities offered through Shopoff Securities, Inc. (“SSI”) member FINRA/SIPC. Certain statements contained herein are forward-looking in nature and are based on current expectations, estimates, and projections. Actual results may differ materially due to a variety of factors. Market conditions and trends discussed herein may not continue and are subject to change.
