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
Architects | Nov 11, 2016
Six finalists selected for London’s Illuminated River competition
The competition is searching for the best design for lighting the bridges of central London.
Healthcare Facilities | Nov 10, 2016
Prescription for success: Managing technology in the design of healthcare facilities
While the benefits of intelligently deployed technology are abundantly clear to both designers and healthcare end-users, it’s no simple task to manage the integration of technology into a building program.
Industry Research | Nov 4, 2016
New survey exposes achievement gap between men and women designers
Female architects still feel disadvantaged when it comes to career advancement.
Architects | Nov 2, 2016
NCARB launches ARE 5.0
The newest version of the exam required for an architecture license, ARE 5.0, launched on Nov. 1.
Architects | Oct 24, 2016
Winners of the 2016 AAP American Architecture Prize announced
The AAP recognizes the most outstanding architecture worldwide across three disciplines: architecture, interior design, and landscape architecture.
Architects | Oct 21, 2016
A process of analysis and synthesis gives architects and designers the information they need to create
Sometimes people look only for the simple answer and don’t understand that there is a calculated process to get there, writes HDR’s Lynn Mignola.
Architects | Oct 21, 2016
The AIA Innovation Award Recipients have been selected
The program honors projects that highlight collaboration between design and construction teams to create better process efficiencies and overall costs savings.
Architects | Oct 21, 2016
NASA Orbit Pavilion to debut at The Huntington Library at the end of October
The pavilion uses sound to represent the movement of the International Space Station and 19 earth satellites.
Higher Education | Oct 20, 2016
Designing innovative campuses for tomorrow's students
Planning for places that foster effective innovation is still an emerging process, but the constant pressure on universities to do so continues from two of their key institutional constituencies—students and employers, writes Perkins+Will's Ken Higa and Josh Vel.
Data Centers | Oct 14, 2016
Where data centers meet design
As technology continues to evolve, we have to simultaneously adapt and help our clients think beyond the short term, writes Gensler's Martin Gollwitzer.
