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
Lighting | Jun 10, 2024
LEDs were nearly half of the installed base of lighting products in the U.S. in 2020
Federal government research shows a huge leap in the penetration of LEDs in the lighting market from 2010 to 2020. In 2010 and 2015, LED installations represented 1% and 8% of overall lighting inventory, respectively.
Libraries | Jun 7, 2024
7 ways to change 'business as usual': The Theodore Roosevelt Presidential Library
One hundred forty years ago, Theodore Roosevelt had a vision that is being realized today. The Theodore Roosevelt Presidential Library is a cutting-edge example of what’s possible when all seven ambitions are pursued to the fullest from the beginning and integrated into the design at every phase and scale.
Education Facilities | Jun 6, 2024
Studio Gang designs agricultural education center for the New York City Housing Authority
Earlier this month, the City of New York broke ground on the new $18.2 million Marlboro Agricultural Education Center (MAEC) at the New York City Housing Authority’s Marlboro Houses in Brooklyn. In line with the mission of its nonprofit operator, The Campaign Against Hunger, MAEC aims to strengthen food autonomy and security in underserved neighborhoods. MAEC will provide Marlboro Houses with diverse, community-oriented programs.
Office Buildings | Jun 6, 2024
HOK presents neurodiversity research and design guidelines at SXSW 2024
Workplace experts share insights on designing inclusive spaces that cater to diverse sensory processing needs.
Architects | Jun 4, 2024
HED and Larson Incitti Architects merge, combine Denver staff
HED, a leading national architecture and engineering firm, today announced a merger with award-winning, Denver-based Larson Incitti Architects (LIA). The merger combines LIA's staff with HED's Denver office, significantly expanding the local team and leveraging community relationships to create new opportunities across multiple market sectors.
Airports | Jun 3, 2024
SOM unveils ‘branching’ structural design for new Satellite Concourse 1 at O’Hare Airport
The Chicago Department of Aviation has revealed the design for Satellite Concourse 1 at O’Hare International Airport, one of the nation’s business airports. Designed by Skidmore, Owings & Merrill (SOM), with Ross Barney Architects, Juan Gabriel Moreno Architects (JGMA), and Arup, the concourse will be the first new building in the Terminal Area Program, the largest concourse area expansion and revitalization in the airport’s almost seven-decade history.
Office Buildings | Jun 3, 2024
Insights for working well in a hybrid world
GBBN Principal and Interior Designer Beth Latto, NCIDQ, LEED AP, ID+C, WELL AP, share a few takeaways, insights, and lessons learned from a recent Post Occupancy Evaluation of the firm's Cincinnati, Ohio, office.
Multifamily Housing | Jun 3, 2024
Grassroots groups becoming a force in housing advocacy
A growing movement of grassroots organizing to support new housing construction is having an impact in city halls across the country. Fed up with high housing costs and the commonly hostile reception to new housing proposals, advocacy groups have sprung up in many communities to attend public meetings to speak in support of developments.
MFPRO+ News | Jun 3, 2024
New York’s office to residential conversion program draws interest from 64 owners
New York City’s Office Conversion Accelerator Program has been contacted by the owners of 64 commercial buildings interested in converting their properties to residential use.
MFPRO+ News | Jun 3, 2024
Seattle mayor wants to scale back energy code to spur more housing construction
Seattle’s mayor recently proposed that the city scale back a scheduled revamping of its building energy code to help boost housing production. The proposal would halt an update to the city’s multifamily and commercial building energy code that is scheduled to take effect later this year.