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
| Dec 29, 2013
7 ways to make your firm more efficient
In a CEO.com post, Andrew Miller, president of ACM Consulting, shares the seven organizational efficiency strategies he encounters most frequently as he works with corporate executives to boost their performance.
| Dec 24, 2013
First Look: Calatrava's Sharq Crossing in Doha, Qatar [video]
The government of Qatar has released details of Sharq Crossing, a massive infrastructure project designed by Spanish architect Santiago Calatrava.
| Dec 23, 2013
MBI commends start of module setting at B2, world's tallest modular building
The first modules have been set at B2 residential tower at Atlantic Yards in New York, set to become the tallest modular building in the world.
| Dec 23, 2013
First Look: KPF's dual-tower design for Ziraat Bank in Istanbul
Kohn Pedersen Fox Associates (KPF) is designing a new headquarters for Turkey’s largest and oldest financial institution, Ziraat Bank, in a modern, suburban district of Istanbul.
| Dec 20, 2013
Must see for the holidays: Architects re-create iconic structures using gingerbread
Gensler, PBK, Page Sutherland Page, and Kirksey were among the firms to compete in the 5th Annual Gingerbread Build-Off.
| Dec 20, 2013
Can energy hogs still be considered efficient buildings? Yes, say engineers at Buro Happold
A new tool from the engineering firm Buro Happold takes into account both energy and economic performance of buildings for a true measure of efficiency.
| Dec 18, 2013
How small architectural firms can make big money
What separates the great-but-struggling designers from the great-successful ones isn't luck. If you're as good an architect as you think, it will take more than your awesome design skills to become successful. Learn how to manage your firm’s finances and go from floundering to flourishing.
| Dec 18, 2013
Eskew + Dumez + Ripple receives AIA's 2014 Architecture Firm Award
The American Institute of Architects (AIA) Board of Directors has voted for Eskew + Dumez + Ripple to receive the 2014 AIA Architecture Firm Award. The firm will be honored at the 2014 AIA National Convention in Chicago. The Board also voted to posthumously honor Julia Morgan, FAIA, with its 214 Gold Medal.
| Dec 18, 2013
Architecture Billings Index takes step back in November
After six months of steadily increasing demand for design services, the Architecture Billings Index paused in November, dipping below 50 for just the second time in 2013.
| Dec 17, 2013
Kahn appoints Alan Cobb President and CEO
Cobb is the tenth president in the firm’s 118-year history. As President, Cobb is responsible for ensuring that all of the firm’s client issues are effectively address and that overall project team performance meets or exceeds client expectations for each and job the firm undertakes.