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
| Aug 11, 2014
The Endless City: Skyscraper concept connects all floors with dual ramps
Rather than superimposing one floor on top of another, London-based SURE Architecture proposes two endless ramps, rising gradually with a low gradient from the ground floor to the sky.
| Aug 11, 2014
Will Alsop's funky 'high-rise on stilts' will be built over an apartment building in London
South London's riverfront will soon be graced by one of Will Alsop's eccentric designs: a curved apartment tower on purple stilts.
| Aug 11, 2014
New guide for prevention of thermal bridging in commercial buildings
The guide aims to overcome obstacles with respect to mitigating thermal bridging to reduce energy consumption in buildings.
| Aug 8, 2014
LEGO launches set aimed at professional architects
LEGO Architecture Studio is made up of 76 unique elements and over 1,200 pieces, and is intended to give the builder as much freedom as possible.
| Aug 8, 2014
First look: China's latest office development will take the shape of binary code
The Window of Guangzhou project will consist of three towers forming the number sequence "001."
| Aug 8, 2014
Government Sector Giants: Public-sector construction slow, but stirring [2014 Giants 300 Report]
Improving energy performance of existing properties through targeted upgrades and large-scale reconstruction continues to be a federal priority, according to BD+C's 2014 Giants 300 Report.
Sponsored | | Aug 8, 2014
Setting guidelines for construction PDF documents across the AEC industry
Sasha Reed interviews two members of the coalition responsible for creating new Guidelines for Construction PDF Documents. SPONSORED CONTENT
Sponsored | | Aug 8, 2014
Safe and secure: Fire and security glazing solution for Plaquemines Parish Detention Center
When the designers at L. R. Kimball looked for an all-in-one clear, wire-free glazing solution that protects against fire, bullets and forced entry for the new Plaquemines Parish Detention Center, SAFTI FIRST supplied a complete single-source tested and listed assembly that was easy to install and maintenance-free.
| Aug 7, 2014
Office Sector Giants: ‘Flex’ reigns supreme in hot office construction market [2014 BD+C Giants 300 Report]
The adage “doing more with less” has become a byword for many businesses since the Great Recession, and clients are trying to maximize every precious inch, according to BD+C's 2014 Giants 300 Report.
| Aug 6, 2014
BIG reinvents the zoo with its 'Zootopia' natural habitat concept [slideshow]
Bjarke Ingels’ firm is looking to improve the 1960s-designed Givskund Zoo in Denmark by giving the animals a freer range to roam.