The University of Southern California Lusk Center for Real Estate’s annual analysis of industrial and office real estate in Los Angeles County, Orange County and the Inland Empire shows signs of a slow market recovery.
The 10th Annual Casden Southern California Industrial and Office Forecast reveals that all three areas experienced job growth and increased demand for both property types in 2011. An analysis of each area’s submarkets found lower vacancy rates in 11 of 17 office submarkets and 11 of 14 industrial submarkets. On the rent side, four office submarkets and eight industrial submarkets experienced increases. Overall, declines were smaller than in the previous two years.
“Although Southern California is a long way from pre-crisis levels of economic health, the improved employment picture and profound turnaround in the industrial market are signs of a slow recovery,” said study author Tracey Seslen. “The office market is only slightly improved over last year and vacancy rates may continue to fall for many months before we see rents stabilize.”
As a result, while office demand is expected to grow over the next two years, office rents were down for the third straight year and will continue to decline. On the industrial side, all three markets are expected to see ongoing declines in vacancies and increases in rents over the next two years.
In particular, the Inland Empire’s industrial market – the top performer in 2011 with a 6.4% increase in rents and nearly 17 million square feet of net absorption – is expected to see more growth in the next two years, but the magnitude will depend on rail and port activity.
“Sovereign risk in Europe, geopolitical turmoil and the growing U.S. debt crisis are undermining consumer confidence. Port and rail traffic, particularly activity at the Port of Long Beach, is down and could hinder the positive outlook for industrial rents,” Seslen said. BD+C
Related Stories
Codes and Standards | Jul 29, 2022
Few projects and properties are being built beyond code
Clients and architects disagree on how well building to code provides resilience, according to a recent report by the American Institute of Architects (AIA) in partnership with Owens Corning.
Headquarters | Jul 29, 2022
Nike HQ’s newest, largest structure: the Serena Williams Building
In Beaverton, Ore., the new Serena Williams Building, at just over 1 million square feet, is the largest structure at Nike World Headquarters.
| Jul 28, 2022
Fanning Howey hires Dennis Bane, AIA, as Project Executive
Fanning Howey, an architecture, interiors and engineering firm specializing in learning environments, has hired Dennis Bane, AIA, ALEP, to serve as a Project Executive for the firm’s Indianapolis office.
Multifamily Housing | Jul 28, 2022
GM working to make EV charging accessible to multifamily residents
General Motors, envisioning a future where electric vehicles will be commonplace, is working to boost charging infrastructure for those who live in multifamily residences.
Urban Planning | Jul 28, 2022
A former military base becomes a substation with public amenities
On the site of a former military base in the Hunters Point neighborhood of San Francisco, a new three-story substation will house critical electrical infrastructure to replace an existing substation across the street.
Hotel Facilities | Jul 28, 2022
As travel returns, U.S. hotel construction pipeline growth follows
According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.
Codes and Standards | Jul 27, 2022
Biden administration proposes drastic flood insurance reform
The Biden administration’s proposed major overhaul to the National Flood Insurance Program, or NFIP, would drastically alter how Americans protect homes and businesses against flooding.
Concrete | Jul 26, 2022
Consortium to set standards and create markets for low-carbon concrete
A consortium of construction firms, property developers, and building engineers have pledged to drive down the carbon emissions of concrete.
Green | Jul 26, 2022
Climate tech startup BlocPower looks to electrify, decarbonize the nation's buildings
The New York-based climate technology company electrifies and decarbonizes buildings—more than 1,200 of them so far.
Education Facilities | Jul 26, 2022
Malibu High School gets a new building that balances environment with education
In Malibu, Calif., a city known for beaches, surf, and sun, HMC Architects wanted to give Malibu High School a new building that harmonizes environment and education.
