California commercial real estate continues to strive, but hints of slowing economic growth are a possible concern, according to the Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey. The biannual survey projects a three-year-ahead outlook for California’s commercial real estate industry and forecasts potential opportunities and challenges affecting office, multifamily, retail and industrial sectors.
For each of the six markets surveyed (San Francisco, the East Bay, Silicon Valley, Los Angeles, Orange County and San Diego), the trend in office developer sentiment has declined since its peak in 2014. This downward trend occurs as developers become more pessimistic about the growth of real rental rates and vacancy rates.
Mulitfamily developer optimism has remained strong and consistent over the previous four years that it has been included in the survey. The demand for multifamily housing tends to follow job growth in the more densely populated regions of California. Overall, the survey anticipates a 25-year high in multifamily construction during the next three years. Unlike office space, there is no evidence of a slowdown in new multifamily development.
For more on the survey, see “California developers show signs of pessimistic concerns.”
The views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.
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Andrea Waitrovich is editor of IREN and web content editor of Institutional Real Estate, Inc.
