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
| Nov 14, 2014
Bjarke Ingels unveils master plan for Smithsonian's south mall campus
The centerpiece of the proposed plan is the revitalization of the iconic Smithsonian castle.
| Nov 14, 2014
Haskell acquires FreemanWhite, strengthens healthcare design-build business
The combination expands Haskell’s geographic presence by adding FreemanWhite’s offices in Chicago, Charlotte, Nashville, and San Diego. FreemanWhite will retain its name and brand.
| Nov 14, 2014
What college students want in their living spaces
In a recent workshop with 62 college students, architects from Little explored the changing habits and preferences of today's students, and how those changes affect their living spaces.
| Nov 14, 2014
JetBlue opens Gensler-designed International Concourse at JFK
The 175,000-sf extension includes the conversion of three existing gates to international swing gates, and the addition of three new international swing gates.
Sponsored | | Nov 12, 2014
Eye-popping façade highlights renovation, addition at Chaffin Junior High School
The new distinctive main entrance accentuates the public face of the school with an aluminum tube “baguette” system.
| Nov 12, 2014
Collaboration as competitive advantage
A collaborative planning and design process may seem like a common-sense goal, but the concept can be a challenge to achieve in the fragmented AEC industry. SPONSORED BLOG
Sponsored | | Nov 12, 2014
Williams Scotsman plugs into the jobsite
Many of our customers conduct important business from their temporary modular jobsite office and most require access to technology to get their job done effectively and efficiently. SPONSORED CONTENT
| Nov 12, 2014
Chesapeake Bay Foundation completes uber-green Brock Environmental Center, targets Living Building certification
More than a decade after opening its groundbreaking Philip Merrill Environmental Center, the group is back at it with a structure designed to be net-zero water, net-zero energy, and net-zero waste.
| Nov 12, 2014
Refocusing the shifted line
A recent trend in the practice of architecture that I’ve been noticing is the blurring of responsibility between design and construction coordination. I’m not sure why this trend began, but the subject is worth exploring, writes FXFOWLE's Mark Nusbaum.
| Nov 12, 2014
Designs by three finalists for new Beethoven concert hall unveiled
David Chipperfield and Valentiny are among the finalists for a new concert hall being built to commemorate Beethoven’s 250th birthday in his hometown of Bonn, Germany.