Real estate developers in California are expressing optimism for the coming year, according results of the Allen Matkins/UCLA Anderson Forecast commercial real estate survey. The semi-annual survey asks industry professionals for their take on how the market will perform over the next three years.
Since the recession has ended, developers have become more optimistic about the market, including all types of commercial real estate. Survey respondents indicated an increased willingness to go forward with plans for new development.
CA office space developers have reported feeling positive about the future over the past three years, but these good intentions did not immediately develop into concrete plans for new projects. The current survey results indicate that approximately one-quarter of respondents plan to break ground on new construction in the next year.
The first commercial real estate market to recover following the recession was in San Francisco. The area South of Market is considered to be at a mature stage due to lack of supply and high prices. The shortage of available commercial properties over the past two years is now affecting the recovery in the city, and new construction is needed to ease the shortage of office space.
Optimism in the state’s industrial space market is very strong, according to the results of the survey, which should lead to more construction projects in the next 12 months. The industrial space market has been reporting feeling positive for the past couple of years. Occupancy rates in Los Angeles and Orange County has risen to 96 per cent, and this figure is being driven by growth in the state’s manufacturing export industry.
Survey results indicate that opportunities for new developments in the California commercial real estate market have emerged in these locations. With occupancy rates on the rise, construction on new projects will start shortly to respond to market demands.
