Economic forecast shows optimistic future for commercial real estate
The outlook for commercial real estate growth in California through 2018 is looking pretty good — that's according to the latest Allen Matkins and UCLA Anderson Forecast Commercial Real Estate Survey.
Researchers surveyed developers throughout the state who said they're optimistic about the next few years. Several of them are already planning new commercial projects, including office buildings, warehouses and multi-family housing.
The survey released Wednesday states that the Fed increasing interest rates has not dampened optimism for the future of commercial real estate in California.
Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast, said that for Orange County, Los Angeles and San Diego, the survey shows markets tightening in the next three years.
“What this means is the markets are not overbuilt, and demand is still pushing supply,” Nickelsburg said.
He said that industrial space vacancy rates in the Inland Empire will be higher in the next few years, but rental rates will continue to rise faster than the rate of inflation.
Optimistic outlooks for developing commercial real estate also has positive outcomes for job growth and the economy, Nickelsburg said.
"What that means for local economy is increase demand for construction workers and increased demand for building supplies. All this is a positive development in economic growth in Southern California," Nickelsburg said.
Read the entire Commercial Real Estate Survey here: