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
| Apr 22, 2014
Transit-friendly apartment building now under construction
The new $44 million community is situated on eight acres, directly adjacent to the local Park-n-Ride, and a quick walk from a nearby light rail station.
| Apr 22, 2014
Bright and bustling: Grimshaw reveals plans for the Istanbul Grand Airport [slideshow]
In partnership with the Nordic Office of Architecture and Haptic Architects, Grimshaw Architects has revealed its plans for the terminal of what will be one of the world's busiest airports. The terminal is expected to serve 150 million passengers per year.
| Apr 21, 2014
10 design-build best practices
Design-build requires more than a good contract and appropriate risk allocation, says the DBIA. Everyone from the owner to the subcontractors must understand the process, the expectations, and fully engage in the collaboration.
| Apr 18, 2014
Multi-level design elevates Bulgarian Children's Museum [slideshow]
Embodying the theme “little mountains,” the 35,000-sf museum will be located in a former college laboratory building in the Studenski-grad university precinct.
| Apr 17, 2014
Online mapping tool helps teams determine multifamily project tax credit eligibility
Accounting and advisory firm Baker Tilly has launched a new, interactive online mapping tool that helps users determine if a business or development project may qualify for the New Markets Tax Credit or Low-Income Housing Tax Credit program.
Sponsored | | Apr 17, 2014
Technology enables state transportation agency to make the leap to digital design review
Earlier this month, my colleague and I presented a session to a group of civil engineers and transportation agencies about the tech trends in the AEC space. Along with advice on how to prepare your plan for controlled collaboration, we also talked through some practical use cases. One such use case was especially interesting, as it outlined a challenge not unfamiliar to government agencies who are contemplating the leap from paper to digital processes: how to securely migrate workflows.
| Apr 16, 2014
Upgrading windows: repair, refurbish, or retrofit [AIA course]
Building Teams must focus on a number of key decisions in order to arrive at the optimal solution: repair the windows in place, remove and refurbish them, or opt for full replacement.
| Apr 15, 2014
12 award-winning structural steel buildings
Zaha Hadid's Broad Art Museum and One World Trade Center are among the projects honored by the American Institute of Steel Construction for excellence in structural steel design.
| Apr 15, 2014
First look: Zaha Hadid reveals designs for dreamy sculptural hotel - CORRECTED
Hadid's design, which will become the fifth hotel tower in the City of Dreams entertainment hub, features a latticed exoskeleton enveloping the building's exterior. The 40-floor, 150,000-square-foot space is envisioned as a monolith with voids carved throughout.
| Apr 15, 2014
Chipperfield's sparkling brass-clad scheme selected to be new home of Nobel Prize
The distinctive building, with its shimmering vertical brass elements and glass façade design, beat out two other finalists in the Nobel Center architectural competition.
