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
| May 6, 2014
'Ugliest building in New Jersey' finally getting facelift
After a decade of false starts and mishaps, the American Dream mall in the Meadowlands may finally get built.
| May 5, 2014
Toronto residential tower to feature drawer-like facade scheme
Some of the apartments in the new River City development will protrude from the building at different lengths, creating a drawer-like "push-pull" effect.
| May 5, 2014
Tragic wired glass injury makes headlines yet again
In the story, a high school student pushed open a hallway door glazed with wired glass. His arm not only broke the glass, but penetrated it, causing severe injuries. SPONSORED CONTENT
| May 3, 2014
Health system capital planning for the future: The benefits of master plan portfolio analysis and ambulatory market modeling
Money continues to be scarce, yet U.S. health systems need to invest and re-invest in their physical future. Healthcare facilities planning experts from CBRE Healthcare outline tools and strategies for identifying where to best allocate precious resources.
| May 3, 2014
4 easy steps to being a great project manager
Managing a team of people, especially creative people, is a task that not everyone is up for. Keeping your team on the same page while maintaining a schedule and budget that can keep your corporation happy will take confidence and bountiful people skills. Here are some tips for effectively managing a project. SPONSORED CONTENT
Sponsored | | May 3, 2014
Fire-rated glass floor system captures light in science and engineering infill
In implementing Northwestern University’s Engineering Life Sciences infill design, Flad Architects faced the challenge of ensuring adequate, balanced light given the adjacent, existing building wings. To allow for light penetration from the fifth floor to the ground floor, the design team desired a large, central atrium. One potential setback with drawing light through the atrium was meeting fire and life safety codes.
| May 2, 2014
World's largest outdoor chandelier tops reworked streetscape for Cleveland's PlayhouseSquare
Streetscape project includes monumental gateway portals, LED signage, and a new plaza, fire pit, sidewalk café, and alfresco dining area.
| May 2, 2014
Norwegian modular project set to be world's tallest timber-frame apartment building [slideshow]
A 14-story luxury apartment block in central Bergen, Norway, will be the world's tallest timber-framed multifamily project, at 49 meters (160 feet).
| May 2, 2014
Top 10 countries for LEED buildings outside the U.S.
The list of the top 10 countries for LEED reflects the global adaptability of the world’s most widely used and recognized system guiding the design, construction, operations and maintenance of green buildings.
| May 1, 2014
First look: Cal State San Marcos's posh student union complex
The new 89,000-sf University Student Union at CSUSM features a massive, open-air amphitheater, student activity center with a game lounge, rooftop garden and patio, and ballroom space.
