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 16, 2011
Goody Clancy-designed Informatics Building dedicated at Northern Kentucky University
The sustainable building solution, built for approximately $255-sf, features innovative materials and intelligent building systems that align with the mission of integration and collaboration.
| Dec 16, 2011
Stalco Construction converts Babylon, N.Y. Town Hall into history museum
The project converted the landmark structure listed on the National Register of Historic Places into the Town of Babylon History Museum at Old Town Hall.
| Dec 14, 2011
Belfer Research Building tops out in New York
Hundreds of construction trades people celebrate reaching the top of concrete structure for facility that will accelerate treatments and cures at world-renowned institution.
| Dec 14, 2011
Tyler Junior College and Sika Sarnafil team up to save energy
Tyler Junior College wanted a roofing system that wouldn’t need any attention for a long time.
| Dec 13, 2011
Lutron’s Commercial Experience Center awarded LEED Gold
LEED certification of the Lutron facility was based on a number of green design and construction features that positively impact the project itself and the broader community. These features include: optimization of energy performance through the use of lighting power, lighting controls and HVAC, plus the use of daylight.
| Dec 12, 2011
AIA Chicago announces Skidmore, Owings & Merrill as 2011 Firm of the Year
SOM has been a leader in the research and development of specialized technologies, new processes and innovative ideas, many of which have had a palpable and lasting impact on the design profession and the physical environment.
| Dec 12, 2011
Skanska to expand and renovate hospital in Georgia for $103 Million
The expansion includes a four-story, 17,500 square meters clinical services building and a five-story, 15,700 square meters, medical office building. Skanska will also renovate the main hospital.
| Dec 12, 2011
CRSI design awards deadline extended to December 31
The final deadline is extended until December 31st, with judging shortly thereafter at the World of Concrete.
