Irvine Office Market Outlook: 2027

Setting Context

Irvine is one of Southern California’s largest office markets. The greater John Wayne Airport office market alone contains approximately 38 to 40 million square feet.

This Market Outlook focuses on three areas:

1. John Wayne Airport / Irvine Business Complex (IBC)
2. Newport Center
3. The balance of Newport Beach

Important Note About the Data

The figures in this report are primarily sourced from Newmark, CBRE, Colliers and Cushman & Wakefield. However, these firms do not always define smaller submarkets in exactly the same way.

For that reason, we use the most relevant available data to identify trends in rents, vacancy, absorption and tenant activity. We also avoid comparing statistics that cover significantly different geographic areas.

Office Market Outlook: 2027

The John Wayne Airport Area office market has demonstrated relative strength, with current indications suggesting that favorable conditions will continue into 2027.

Recent brokerage reports show improving absorption and declining vacancy in several important parts of the market. However, conditions still vary significantly based on building quality and location.

Class A buildings continue to attract a larger share of tenant demand. Companies generally favor better buildings, amenities and locations. At the same time, many tenants are leasing less space than they occupied historically.

This flight to quality continues to create a significant divide between top-tier Class A properties and older office buildings competing for tenants.

For this Outlook, we focus on five primary indicators:

• Class A asking rents

• Vacancy rates

• Quarterly absorption

• Year-over-year absorption

• Leasing activity by industry

Current reports show that Class A asking rents in the broader Airport market generally average approximately $3.45 per square foot per month, full service. Rents have moved modestly higher while vacancy has trended lower.

Financial services, professional and business services, and legal firms remain important sources of office demand around John Wayne Airport. Technology, healthcare and other specialized industries also contribute to leasing activity.

Office-to-Residential Conversion

Another important trend affecting the 2027 outlook is the conversion of older office properties to residential uses.

Unlike traditional leasing absorption, these projects can permanently reduce the amount of competing office inventory.

Several projects are moving forward in the Airport/IBC area.

At MacArthur Court, plans call for replacing 126,837 square feet of existing low-rise office space with 700 apartments. The two major office towers would remain.

At 1500 Quail Street, an approved plan would replace an 86,000-square-foot office building with 100 for-sale townhomes.

At 1901 Main Street, plans call for converting the first four floors of an existing eight-story office building into 66 apartments. Another nine townhomes would also be built on the property. Interestingly, the remaining four floors would continue to operate as office space.

The Von Karman Corporate Center represents another potentially significant change. A proposal calls for 426 for-sale homes on portions of the approximately 25-acre office campus. The existing campus contains nine buildings totaling roughly 450,000 square feet.

These projects are at different stages, ranging from proposed and entitled to approved.

Although relatively small compared with the overall office inventory, they represent an emerging trend. Older office properties are increasingly being removed from the market to make way for additional residential development within the Airport/IBC area.

John Wayne Airport / Irvine Business Complex

For this Outlook, we treat the John Wayne Airport area and Irvine Business Complex as one office market.

This is a diverse, mixed-use market with both Class A and Class B properties and a growing residential component.

Demand continues to favor high-quality Class A space. Meanwhile, older properties face greater competition and often provide tenants with stronger negotiating opportunities.

The 2026 numbers reinforce this divide. Class A asking rents in the broader Airport market average approximately $3.45 per square foot per month, full service. Class A vacancy is approximately 18%.

Vacancy has trended lower throughout 2026. In addition, positive absorption has been a consistent theme for much of the year.

Leasing activity remains concentrated in better-quality core and prime buildings. Financial services, professional services and legal firms have been among the more active tenant groups.

This activity reinforces the Airport/IBC’s position as an important service-oriented corporate location.

However, not all Class A buildings compete on equal terms. The difference between highly amenitized properties and older Class A buildings remains substantial. As a result, tenants can encounter very different negotiating environments within the same market.

Newport Center

Newport Center is a separate market from the Airport/IBC. It is a distinct premium Class A office market centered around Fashion Island.

Tenants typically pay a substantial premium for its location, parking and other occupancy costs.

As a reference point, the broader Newport Beach office market averaged approximately $3.93 per square foot per month, full service, during the first half of 2026. Total vacancy was approximately 11%.

Newport Center’s premium Class A properties command rents above the broader Newport Beach average.

Residential Development

Residential development is also beginning to affect Newport Center.

The Irvine Company received zoning approvals allowing as many as 1,500 residential units within North Newport Center.

Plans associated with 100 and 190 Newport Center Drive contemplate approximately 600 residences. However, these units should be considered planned rather than under construction.

Separately, a project at 210 and 300 Newport Center Drive proposes two 22-story residential buildings containing 150 condominiums. Appeals are currently in process.

Medical Office

Medical office is another important component of Newport Center. However, it operates differently from conventional office space.

Medical tenants generally invest heavily in their locations and tend to remain in place longer. As a result, tenant turnover is often lower than in the traditional office market.

Asking rents for desirable medical space can also exceed conventional office rents. Specialized improvements, prime locations and limited availability all contribute to higher occupancy costs.

For tenants, both conventional and medical office space offer opportunities. However, they should be evaluated separately because turnover, build-out costs and lease economics can differ significantly.

Newport Beach Office Outside Newport Center

The remainder of Newport Beach includes properties along the Pacific Coast Highway corridor and smaller, more fragmented office concentrations throughout the city.

Building quality, rents, parking and tenant mix can vary considerably from one property to another.

The best available Newport Beach market data includes Newport Center. This makes it difficult to assign a precise vacancy or asking-rent figure to the balance of Newport Beach.

Through 2026, the broader Newport Beach market averaged approximately $2.95 per square foot per month, full service. Vacancy was approximately 11%.

Medical office will continue to be identified separately when relevant. We will not combine it with conventional office statistics or treat it as a separate geographic submarket.

Outlook for Tenants

Heading into 2027, the John Wayne Airport Area office market is expected to maintain its relative strength, with continued improvement in leasing conditions and the potential for further declines in vacancy through the first quarter of 2027.

However, opportunities remain for tenants, particularly outside renovated and highly amenitized Class A properties.

The greatest negotiating leverage continues to be found among older Class A and Class B buildings throughout the Airport Area/IBC and Newport Beach markets.

Tenants willing to compare multiple alternatives can often uncover meaningful differences in occupancy costs.

These differences may include:

• Base rental rates

• Tenant improvement allowances

• Free rent

• Parking costs

• Other lease concessions

Even buildings located near each other can offer substantially different overall occupancy costs.

For tenants considering a move or lease renewal, comparing the complete lease economics is essential. The best opportunity may not always be the building with the lowest asking rent.