Economic Overview
Between August 2025 and August 2026, total nonfarm employment in Orange County (OC) increased by 4,300 jobs, or 0.3% year-over-year (YOY), as private-sector hiring outpaced public-sector losses. Private-sector employment grew by 8,100 jobs (+0.5% YOY), led by private education and health services (+10,100 jobs, +3.5% YOY) and leisure and hospitality (+5,100 jobs, +2.1% YOY). Government reported the largest decline, shedding 3,800 jobs YOY, while employment also contracted in professional and business services (-3,500 jobs), construction (-1,700 jobs) and manufacturing (-1,400 jobs). Consumer-facing industries remained a bright spot, with food services and drinking places adding 3,400 jobs (+2.3% YOY) and retail trade adding 1,300 jobs (+0.9% YOY). The monthly unemployment rate was 4.4% in August 2026, down from 4.6% in August 2025 and above the Q3 2026 average of 3.9%.¹ Looking ahead, total employment is projected to grow 0.9% in 2026 and 0.7% in 2027, below the five-year historical average of 1.7%.² Continued hiring in consumer-facing sectors should support steady retail demand across the OC market.
Supply and Demand
Overall vacancy in OC declined to 3.7% in Q3 2026, down 20 basis points (bps) quarter-over-quarter (QOQ) and 50 bps YOY, marking its lowest level since Q4 2018 and remaining well below the 10-year quarterly average of 4.3%. The market posted 156,404 square feet (sf) of positive net absorption, its fifth consecutive quarter of occupancy gains, led by South County (+145,859 sf) and power centers (+142,845 sf), bringing year-to-date net absorption to 490,827 sf. Lifestyle centers were the exception, giving back 118,232 sf as vacancy rose to 7.6%. Leasing activity totaled 413,074 sf, down 13.7% QOQ and 14.4% YOY, remaining below the 10-year quarterly average of 640,697 sf. New supply remained limited, with no deliveries during the quarter and 114,600 sf under construction across eight buildings.³
Pricing
The overall average asking rent rose 3.9% QOQ and 5.5% YOY to a record high of $2.68 per square foot (psf) per month on a triple-net basis. Lifestyle centers commanded the highest average asking rent among center types at $4.18 psf, while power centers remained the most affordable at $1.98 psf. The Greater Airport Area remained the most expensive submarket at $5.17 psf, underscoring continued pricing strength in OC’s premier retail locations.
