Most California commercial markets are expected to increase development through 2017, due to employment growth and goods making their way through the state’s ports. This positive outlook for the state is based on the recently-released Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey, which is a leading indicator of future commercial construction activity in the state.
The survey analysed the three-year outlook for real estate development activity and provides insights into upcoming building projects.
Office market developers in the Bay Area had viewed existing stock, as well as the new construction in the pipeline, as sufficient to meet demand until recently, citing concerns about the “fiscal cliff”and lower vacancy rates in 2012 and 2013. The latest Survey results reveal that half of the respondents plan to start one or more new projects within the next year.
Developers in Los Angeles, Orange County, and San Diego are looking forward to 2016 and 2017 and expect that occupancy rates and rental values will rise.
They are cautious about new office space development as demand catches up with available supply. Less than 30 per cent of respondents stated that they planned to develop new office space by the middle of 2015.
The rapid growth seen in coastal California and the steady increase in imports is expected to continue and create demand for more industrial space over the next three years.
This positive outlook in the Bay area, Los Angeles County, Orange County, and Inland Empire will encourage new construction to help support California industry, as well as imported goods and exports to Mexico and Asia.
This sector has remained consistent for the past six months. Since the middle of 2013, half of developers surveyed have started a project and 70 per cent said they will begin one or more within the next year.
Previous Post
NAMA asking €110m for Retail Park Portfolio
No related posts found for this post.
