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
| Sep 17, 2014
The doctor is in: New consortium to fund research of design's influence on public health
The AIA Design & Health Research Consortium has organized its design and health initiative around six evidence-based approaches.
| Sep 17, 2014
New developments in data center design
From the dozen or so facilities housing Google’s 900,000 servers to the sprawling server farms of Facebook to Amazon’s seven sites scattered around the world, today’s data centers must accommodate massive power demand, high heat loads, strict maintenance protocols, and super-tight security. This AIA Discovery course is worth 1.0 AIA CES HSW learning units.
| Sep 17, 2014
New hub on campus: Where learning is headed and what it means for the college campus
It seems that the most recent buildings to pop up on college campuses are trying to do more than just support academics. They are acting as hubs for all sorts of on-campus activities, writes Gensler's David Broz.
Sponsored | | Sep 17, 2014
The balance between innovation and standardization – How DPR Construction achieves both
How does DPR strike a balance between standardization and innovation? In today’s Digital COM video Blog, Sasha Reed interviews Nathan Wood, Innovator with DPR Construction, to learn more about their successful approach to fueling innovation. SPONSORED CONTENT
| Sep 16, 2014
Ranked: Top hotel sector AEC firms [2014 Giants 300 Report]
Tutor Perini, Gensler, and AECOM top BD+C's rankings of design and construction firms with the most revenue from hospitality sector projects, as reported in the 2014 Giants 300 Report.
| Sep 16, 2014
Studies reveal growing demand for LEED-credentialed professionals across building sector
The study showed that demand for the LEED Accredited Professional and LEED Green Associate credentials grew 46 percent over a 12-month period.
| Sep 16, 2014
Shigeru Ban’s design wins Tainan Museum of Fine Arts competition
Pritzker Prize-winning architect Shigeru Ban has won an international competition organized by The Tainan Museum of Art in Taiwan. Ban's design features cascading volumes with an auditorium, classrooms, and exhibition galleries.
| Sep 16, 2014
Competition asks architects, designers to reimagine the future of national parks
National Parks Now asks entrants to propose all types of interventions for parks, including interactive installations, site-specific education and leisure opportunities, outreach and engagement campaigns, and self-led tours.
| Sep 15, 2014
Sustainability rating systems: Are they doomed?
None of the hundreds of existing green building rating systems is perfect. Some of them are too documentation-heavy. Some increase short-term project cost. Some aren’t rigorous enough or include contentious issues, writes HDR's Michaella Wittmann.
| Sep 15, 2014
Ranked: Top international AEC firms [2014 Giants 300 Report]
Parsons Brinckerhoff, Gensler, and Jacobs top BD+C's rankings of U.S.-based design and construction firms with the most revenue from international projects, as reported in the 2014 Giants 300 Report.
