{"id":280459,"date":"2026-04-22T16:16:08","date_gmt":"2026-04-22T16:16:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/280459\/"},"modified":"2026-04-22T16:16:08","modified_gmt":"2026-04-22T16:16:08","slug":"orange-county-continues-to-outpace-los-angeles-in-conversions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/280459\/","title":{"rendered":"Orange County Continues to Outpace Los Angeles in Conversions"},"content":{"rendered":"

Development-friendly processes and availability of discounted office space are key reasons Orange County continues to outpace Los Angeles when it comes to converting underutilized office buildings, despite being a smaller market.<\/p>\n

In the second quarter of last year, Orange County had more than triple the office conversions and redevelopments planned or under construction than L.A. County, according to CBRE. Orange County had 4.2 million square feet, compared to 1.2 million in L.A. This put Orange County in the No. 7 spot out of 58 national markets, and it was the only California market to crack the top 10.<\/p>\n

Flash forward to the fourth quarter of last year, when L.A. came in hot with 3.3 million square feet of office space being converted or planned, up 171 percent from two quarters prior, according to CBRE. Still, Orange County kept the upper hand with 3.8 million square feet. While L.A.\u2019s jump in activity is significant, the margin between the two markets weighs heavier considering L.A.\u2019s population of nearly 10 million is more than three times its neighboring county.<\/p>\n

Orange County\u2019s lead appears to reflect an ability by local governments \u2014 there are 34 separate cities in the market \u2014 to connect the dots on adaptive reuse at a time of high vacancy in the office sector and a regional housing shortage.<\/p>\n

Michael Bohn, partner at Long Beach-based Studio One Eleven, has worked on adaptive reuse projects in L.A. and Orange counties. He found the data surprising, given the difference in size between the two counties, though he chalked up the divide in part to Orange County\u2019s business environment.\u00a0<\/p>\n

\u201cOrange County is definitely more development-friendly than L.A. County,\u201d he said. \u201cIt\u2019s easier to navigate the bureaucratic channels of approvals.\u201d<\/p>\n

Bohn worked on the first adaptive reuse project in Santa Ana after the city passed an ordinance incentivizing these types of projects. The project, which was completed in 2020, converted an underperforming office building constructed in 1965 into a mixed-use affordable housing development dubbed the Santa Ana Arts Collective. During the planning process, Bohn found that the existing parking at the site fell slightly short of the city\u2019s stall size requirements for new buildings but city officials made an exception.<\/p>\n

\u201cIf a city doesn\u2019t provide some flexibility, that can be the difference between a deal working or not working,\u201d Bohn said, noting the high costs of parking in developments.\u00a0<\/p>\n

Kurt Strasmann, executive managing director of CBRE\u2019s Orange County and Inland Empire operations, said Los Angeles \u201cdoesn\u2019t do themselves any favors with some of their regulations.\u201d In Orange County, on the other hand, the math on these deals \u201cmakes sense economically,\u201d he said.<\/p>\n

When investors can purchase office buildings at a discount \u2014 with many sales in the $100-$200 per square foot range in Orange County \u2014 multifamily redevelopment is a good move, considering the high value of residential real estate and the \u201cinstatiable\u201d demand for more housing, Strasmann said.\u00a0<\/p>\n

Building age is another reason adaptive reuse can be easier in Orange County, said Jon Curtis, managing partner at Cedar Street Partners. Orange County generally has newer buildings than L.A. County, and because of that, adaptive reuse can be more straightforward when it comes to working with building systems such as air conditioning and staying up to date with newer codes.\u00a0<\/p>\n

In one project, Studio One Eleven is planning to convert a 1986-built office in Orange County into student housing. The seismic upgrades on this building will cost between $500,000 and $1 million, Bohn said, compared to the $5 million to $10 million it would cost for an older building.\u00a0<\/p>\n

For both counties, the statewide rollback of CEQA requirements<\/a> did create a tailwind in getting adaptive reuse projects up and running, Curtis notes.\u00a0<\/p>\n

A more recent aspect of the strategy to increase housing production in the city of L.A. came with a recently passed ordinance expanding its previous incentive program<\/a> for adaptive reuse projects, making newer buildings eligible. Previously, only buildings completed before July 1974 were a part of the program but now, as of February, the ordinance established a rolling 15-year rule, which means structures built in 2011 and prior are eligible now.\u00a0<\/p>\n

The new ordinance also expanded the geographic footprint of the incentive program citywide after years of being restricted to downtown and nearby neighborhoods and Hollywood. It will likely take time before the expansion of the ordinance shows up in the pipeline of projects.<\/p>\n

Another law that\u2019s specific to the City of Los Angeles also appears to be having an effect on housing production in the region. Measure ULA<\/a>, which voters passed in November 2022, applies a 4 percent tax on all real estate transactions within the City of Los Angeles starting at $5.3 million and increases to 5.5 percent on deals of $10.6 million or more.<\/p>\n

Between the second and fourth quarters of 2025, CBRE data shows the increase in adaptive reuse projects in L.A. County largely came from projects in Long Beach, Culver City and Pasadena \u2014 areas not bound by ULA \u2014 as well as Koreatown and Hollywood, which were included in the city\u2019s prior adaptive reuse incentive program. Sherman Oaks and Encino each added a project in that time, too.<\/p>\n

Bohn thinks the city\u2019s new adaptive reuse ordinance is a step in the right direction and that more projects will be explored. Still, he considers the impacts of ULA \u2013 combined with high costs of construction and a labor shortage \u2013 a deterrent for actually driving construction on these projects, as opposed to planning. Currently, Orange County and L.A. areas not under ULA, such as Long Beach, are much more active, Bohn said.<\/p>\n

While other California metros need to do more work to make adaptive reuse projects financially feasible, Strasmann said he expects Orange County to remain a frontrunner.<\/p>\n

\u201cI see this trend continuing. It\u2019s like the ocean tide \u2013 it\u2019s coming in and that doesn\u2019t go out overnight,\u201d he said. \u201c\u2026 It\u2019s a combination of the resi demand, the value of the property, and we\u2019re the easier choice to do business in than some of our adjacent counties.\u201d<\/p>\n

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