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
MFPRO+ News | Dec 11, 2023
U.S. poorly prepared to house growing number of older adults
The U.S. is ill-prepared to provide adequate housing for the growing ranks of older people, according to a report from Harvard University’s Joint Center for Housing Studies. Over the next decade, the U.S. population older than 75 will increase by 45%, growing from 17 million to nearly 25 million, with many expected to struggle financially.
Office Buildings | Dec 11, 2023
Believe it or not, there could be a shortage of office space in the years ahead
With work-from-home firmly established, many real estate analysts predict a dramatic reduction in office space leasing and plummeting property values. But the high-end of the office segment might actually be headed for a shortage, according to real estate intelligence company CoStar Group.
University Buildings | Dec 8, 2023
Yale University breaks ground on nation's largest Living Building student housing complex
A groundbreaking on Oct. 11 kicked off a project aiming to construct the largest Living Building Challenge-certified residence on a university campus. The Living Village, a 45,000 sf home for Yale University Divinity School graduate students, “will make an ecological statement about the need to build in harmony with the natural world while training students to become ‘apostles of the environment’,” according to Bruner/Cott, which is leading the design team that includes Höweler + Yoon Architecture and Andropogon Associates.
University Buildings | Dec 5, 2023
The University of Cincinnati builds its largest classroom building to serve its largest college
The University of Cincinnati’s recently completed Clifton Court Hall unifies the school’s social science programs into a multidisciplinary research and education facility. The 185,400-sf structure is the university’s largest classroom building, serving its largest college, the College of Arts and Sciences.
MFPRO+ News | Dec 5, 2023
DOE's Zero Energy Ready Home Multifamily Version 2 released
The U.S. Department of Energy has released Zero Energy Ready Home Multifamily Version 2. The latest version of the certification program increases energy efficiency and performance levels, adds electric readiness, and makes compliance pathways and the certification process more consistent with the ENERGY STAR Multifamily New Construction (ESMFNC) program.
Architects | Dec 5, 2023
Populous celebrates its 40th anniversary with a photo exhibit of its works
The firm partnered with Getty Images to assemble more than 60 images, many capturing fan ardor.
Office Buildings | Dec 1, 2023
Amazon office building doubles as emergency housing for Seattle families
The unusual location for services of this kind serves over 300 people per day. Mary's Place spreads across eight of the office's floors—all designed by Graphite—testing the status quo for its experimental approach to homelessness support.
Mixed-Use | Nov 29, 2023
Mixed-use community benefits from city amenities and ‘micro units’
Salt Lake City, Utah, is home to a new mixed-use residential community that benefits from transit-oriented zoning and cleverly designed multifamily units.
Giants 400 | Nov 28, 2023
Top 100 Laboratory Design Firms for 2023
HDR, Flad Architects, DGA, Elkus Manfredi Architects, and Gensler top BD+C's ranking of the nation's largest laboratory architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Engineers | Nov 27, 2023
Kimley-Horn eliminates the guesswork of electric vehicle charger site selection
Private businesses and governments can now choose their new electric vehicle (EV) charger locations with data-driven precision. Kimley-Horn, the national engineering, planning, and design consulting firm, today launched TREDLite EV, a cloud-based tool that helps organizations develop and optimize their EV charger deployment strategies based on the organization’s unique priorities.
