Southern California commercial real estate is undergoing a broad recalibration as companies reassess space needs across industrial, office, and retail sectors. Industrial tenants in the Inland Empire and Orange County shifted from expansion to optimization as automation, robotics, and improved inventory management enable higher efficiency and smaller footprints, prompting landlords to negotiate and offer concessions. Office tenants are reducing square footage amid permanent remote and hybrid work, refocusing offices as collaboration and talent-attraction tools; high-demand spaces prioritize flexibility, amenities, and desirable locations. Tenants often redesign space for collaborative areas and hot-desking instead of dedicating individual workstations. Retail is also recalibrating.
Today, across industrial buildings, office suites, and everything in between, we are in the middle of what I call "The Great Space Recalibration." Companies are rethinking how much space they need, what kind of space they want, and how to make their real estate align with a changed economic landscape. Industrial: For the past decade, industrial tenants in the Inland Empire and Orange County raced to secure more square footage.
E-commerce boomed, imports through the ports surged, and vacancy rates fell to record lows. But the story has shifted. Instead of expanding, many manufacturers and distributors are now optimizing. Automation, robotics and better inventory management allow them to do more with less. A tenant that once needed 200,000 square feet may be comfortable in 150,000 if it's more efficient space.
Office: The office market has undergone an even more dramatic recalibration. Remote and hybrid work are here to stay, and companies continue to evaluate their footprints. In Orange County, for example, tenants are renewing-but often for less space. A law firm that once leased three full floors may decide two is sufficient, with one floor redesigned into collaborative areas and hot-desking stations.
#commercial-real-estate #industrial-optimization #office-space-recalibration #hybrid-work-and-flexible-offices
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