Orange County Multifamily Occupancy Falls as Deliveries Quadruple

A surge in supply is putting pressure on some of Orange County's multifamily fundamentals. The market, which includes various Southern California regions, such as Costa Mesa, Anaheim, Santa Ana, Huntington Beach and Newport Beach, saw 1,642 units of new deliveries in the fourth quarter, according to a report from CBRE. This marks a fourfold increase from the third quarter's 408 units.

The increase in deliveries came as funding for developments in Orange County received a boost, the brokerage noted.

That vacant deliveries took the occupancy rate down by 30 basis points at the end of 2025 to 96.1 percent, compared with the third quarter, according to CBRE.

Simultaneously, rents dropped by 75 basis points to $2,914 per month. CBRE said, "new competition from increased deliveries lowered the pricing power of landlords."

While deliveries caused issues in the fourth quarter, demand was solid. Sure, the positive 875 units absorbed didn't outpace the supply, but it marked an increase over the third quarter's 290 units. The submarkets of South Irvine and North Irvine stood out the most, with demand of 747 and 667 units, respectively.

"Despite ongoing population outflows from Orange County throughout 2025, the remaining tenants continued to highlight the trend of flight-to-quality, supported by their ability to afford top-tier assets within these submarkets," CBRE wrote.

Also, investment activity was strong. Orange County's multifamily volume increased to $396.8 million compared to $284.5 million in the third quarter. Interestingly, CBRE noted that about 80 percent of the activity was driven by two bigger deals in the fourth quarter, with the rest allocated to various other smaller transactions.

Redwood Housing Partners made the largest buy in the fourth quarter, with its $160 million snag in Orange, followed by Griffis Residential's $152.95 million acquisition in Anaheim. The next largest was made by Raafat Salem, purchasing a property in Huntington Beach for $16.13 million.

Article courtesy of Anthony Russo of GlobeSt.com