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 9, 2014
Steel decks: 11 tips for their proper use | BD+C
Building Teams have been using steel decks with proven success for 75 years. Building Design+Construction consulted with technical experts from the Steel Deck Institute and the deck manufacturing industry for their advice on how best to use steel decking.
| Apr 8, 2014
Gehry, Foster unveil plans for Battersea Power Station redevelopment [slideshow]
Phase 3 of the massive redevelopment of the London landmark will include more than 1,300 residential units, a 160-room hotel, and 350,000 sf of retail space.
| Apr 8, 2014
Fire resistive curtain wall helps The Kensington meet property line requirements
The majority of fire rated glazing applications occur inside a building to allow occupants to exit the building safely or provide an area of refuge during a fire. But what happens when the threat of fire comes from the outside? This was the case for The Kensington, a mixed-use residential building in Boston.
| Apr 8, 2014
First look: Zaha Hadid reveals design for dreamy sculptural hotel
Hadid's design, which will become the fifth hotel tower in the City of Dreams entertainment hub in Macau, features a latticed exoskeleton enveloping the building's exterior.
| Apr 8, 2014
Understanding value billing vs. conventional billing
Every company is a sum of the value it delivers to its clients. What differs from one company to the next is how that value is delivered and perceived. All too often, it is based solely on the fee you charge.
| Apr 8, 2014
Science, engineering find common ground on the Northeastern University campus [slideshow]
The new Interdisciplinary Science and Engineering Building is designed to maximize potential of serendipitous meetings between researchers.
| Apr 8, 2014
40 Under 40 winners: Meet the contractors
Of the up-and-coming AEC professionals to be named to the class of 2014, nine make their living as contractors.
| Apr 7, 2014
40 Under 40 winners: Meet the architects
Of the up-and-coming AEC professionals to be named 40 Under 40 winners by the editors of Building Design+Construction, 21 make their living in the architecture profession.
| Apr 4, 2014
$25 million Orion Jet Center designed by SchenkelShultz now open
As the centerpiece of the 45-acre campus, which is its first phase of a planned 215-acre mixed-use development, the 18,000 square foot executive terminal facility offers spacious passenger areas, administrative space, an executive suite, rental car kiosk, catering and a cafe.
| Apr 3, 2014
Security, accountability, and cloud access: Can you really have it all?
I’ve heard countless stories of conversations between project engineers and IT professionals who can’t come to an agreement on the level of security needed to protect their data while making it more accessible—not only externally, but also internally.
