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
| Nov 11, 2012
Greenbuild 2012 Report: Multifamily
Sustainably designed apartments are apples of developers’ eyes
| Nov 11, 2012
Greenbuild 2012 Report: Higher Education
More and more colleges and universities see sustainainably designed buildings as a given
| Nov 11, 2012
Greenbuild 2012 Report: K-12
High-performance schools put ‘sustainability’ in the lesson plan
| Nov 7, 2012
John Portman & Associates awarded new high rise in China
108-story building to rise in Nanning, the Capital City of Guangxi Province.
| Nov 7, 2012
Two Thornton Tomasetti projects receive 2012 International Architecture Awards for Best Global Design
The awards, presented by the Chicago Athenaeum Museum of Architecture Design, the European Center for Architecture Art Design, and Urban Studies and Metropolitan Arts Press, Ltd., recognize excellence in architecture and urban planning.
| Nov 6, 2012
Honeywell donates first responder products for Hurricane Sandy relief and recovery efforts
Honeywell Humanitarian Relief Fund to provide aid to local employees affected by Hurricane Sandy.
| Nov 6, 2012
Uponor files patent infringement suit against Sioux Chief Manufacturing
Uponor is seeking damages and an injunction to prevent Sioux Chief from selling the PowerPEX F1960 Ring with Stop, which it believes violates Uponor’s patent.
| Nov 6, 2012
Simpson Strong-Tie donates $25K to hurricane support
The company will also be matching employees’ personal contributions to the Red Cross and other nonprofit disaster relief organizations.
| Nov 6, 2012
Goettsch Partners designs new tower in Shunde, China
200-meter-tall building will be located between Guangzhou and Hong Kong.