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
Healthcare Facilities | Feb 21, 2023
Cleveland's Glick Center hospital anchors neighborhood revitalization
The newly opened MetroHealth Glick Center in Cleveland, a replacement acute care hospital for MetroHealth, is the centerpiece of a neighborhood revitalization. The eleven-story structure is located within a ‘hospital-in-a-park’ setting that will provide a bucolic space to the community where public green space is lacking. It will connect patients, visitors, and staff to the emotional and physical benefits of nature.
Multifamily Housing | Feb 21, 2023
Multifamily housing investors favoring properties in the Sun Belt
Multifamily housing investors are gravitating toward Sun Belt markets with strong job and population growth, according to new research from Yardi Matrix. Despite a sharp second-half slowdown, last year’s nationwide $187 billion transaction volume was the second-highest annual total ever.
Multifamily Housing | Feb 21, 2023
New multifamily housing and mixed-use buildings in Portland, Ore., must be ready for electric vehicle charging
The Portland, Ore., City Council recently voted unanimously to require all new residential and mixed-use buildings to be ready for electric vehicle charging. The move amends Portland’s zoning laws to require all new multi-dwelling and mixed-use development of five or more units with onsite parking to provide electric vehicle charging infrastructure.
K-12 Schools | Feb 18, 2023
Atlanta suburb opens $85 million serpentine-shaped high school designed by Perkins&Will
In Ellenwood, Ga., a southeast suburb of Atlanta, Perkins and Will has partnered with Clayton County Public Schools and MEJA Construction to create a $85 million secondary school. Morrow High School, which opened in fall 2022, serves more than 2,200 students in Clayton County, a community with students from over 30 countries.
Museums | Feb 17, 2023
First Americans Museum uses design metaphors of natural elements to honor native worldview
First Americans Museum (FAM) in Oklahoma City honors the 39 tribes in Oklahoma today, reflecting their history through design metaphors of nature’s elements of earth, wind, water, and fire. The design concept includes multiple circles suggested by arcs, reflecting the native tradition of a circular worldview that encompasses the cycle of life, the seasons, and the rotation of the earth.
Architects | Feb 17, 2023
Architect of the Capitol fired by President Biden after strong bipartisan criticism
Architect of the Capitol J. Brett Blanton was let go this week following alleged abuse of authority, misuse of government property, and wasted taxpayer money.
High-rise Construction | Feb 15, 2023
Bjarke Ingels' 'leaning towers' concept wins Qianhai Prisma Towers design competition
A pair of sloped high-rises—a 300-meter residential tower and a 250-meter office tower—highlight the Qianhai Prisma Towers development in Qianhai, Shenzhen, China. BIG recently won the design competition for the project.
Senior Living Design | Feb 15, 2023
Passive House affordable senior housing project opens in Boston
Work on Phase Three C of The Anne M. Lynch Homes at Old Colony, a 55-apartment midrise building in Boston that stands out for its use of Passive House design principles, was recently completed. Designed by The Architectural Team (TAT), the four-story structure was informed throughout by Passive House principles and standards.
Designers | Feb 13, 2023
Hoffmann Architects + Engineers Establishes Diversity Advancement Scholarship Fund
Hoffmann Architects + Engineers, a design firm specializing in the rehabilitation of building exteriors, contributed $25,000 to fund the Hoffmann Diversity Advancement Scholarship, administered through the Connecticut Architecture Foundation. The fund provides scholarships for students from underrepresented racial or ethnic groups who are seeking degrees in architecture or engineering.
Office Buildings | Feb 12, 2023
Smyrna Ready Mix’s new office HQ mimics the patterns in the company’s onsite stone quarry
Designed by EOA Architects to showcase various concrete processes and applications, Smyrna Ready Mix's new office headquarters features vertical layering that mimics the patterns in the company’s stone quarry, located on the opposite end of the campus site. The building’s glass and concrete bands are meant to mirror the quarry’s natural contours and striations.