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
| Mar 26, 2012
Ball State University completes nation's largest ground-source geothermal system
Ball State's geothermal system will replace four aging coal-fired boilers to provide renewable power that will heat and cool 47 university buildings, representing 5.5-million-sf on the 660-acre campus.
| Mar 22, 2012
Hawaiian architecture firm chooses FRP trellis system over traditional materials
MGA Architecture plans to add five more trellis systems on the neighboring building.
| Mar 22, 2012
Moline Public Library uses copper as an exterior building material
Architects incorporate decorative copper panels to create the look of a heavy plate copper shingle.
| Mar 21, 2012
10 common data center surprises
Technologies and best practices provide path for better preparation.
| Mar 21, 2012
ABI remains positive for fourth straight month
Highest spike in inquiries for new projects since 2007.
| Mar 21, 2012
Iowa’s Mercy Medical Center’s new Emergency Department constructed using Lean design
New Emergency Department features a "racetrack" design with a central nurses' station encircled by 19 private patient examination rooms and 2 trauma treatment rooms.
| Mar 21, 2012
Clary, Hendrickson named regional directors for HDR Architecture
New directors will be responsible for expanding and strengthening the firm throughout the central region.
| Mar 20, 2012
FMI releases 2012 first quarter construction outlook
The last time construction put in place was at this level was 2000-2001.
| Mar 20, 2012
Ceco Building Systems names Romans marketing director
Romans joins Ceco Building Systems with over 15 years in marketing and customer service.
| Mar 20, 2012
UT Arlington launches David Dillon Center for Texas Architecture
Symposium about Texas architecture planned for April.
