July 12, 2012
Allen Matkins/UCLA Anderson California Commercial Real Estate Survey Points to Recovery
Majority of Surveyed Plan New Multifamily Developments in Next 12 Months
LOS ANGELES -- Developer sentiment continues to show signs of optimism and solid indications of impending new commercial development, according to the current semi-annual release of the Allen Matkins/UCLA Anderson California Commercial Real Estate Survey. "Since the end of the recession we have seen developer optimism spread to all markets and types of commercial space along with an increased willingness to go forward with new development," says UCLA Anderson Forecast Senior Economist Jerry Nickelsburg. (http://www.youtube.com/watch?v=9ex7x2VSbK4)
Multifamily Development is Returning in Bay Area and LA
Promising news also comes from the first Allen Matkins/UCLA Anderson Forecast survey of multi-family housing developers. Overall, 70% of the survey participants in San Francisco, Silicon Valley and Los Angeles plan to begin new multi-family housing developments in the next 12 months. This turn around in multi-family residential construction is being driven by high occupancy rates and rising rents, particularly in the Bay Area, as household formation begins to rebound in California. "This growth in multi-family housing is encouraging. It is in markets where there have been substantial job gains - especially for younger workers who prefer to rent apartments in urban areas - and where property values are high," said John Tipton, partner at Allen Matkins.
New Office Development in LA and San Francisco
California office space market sentiment has been positive over the past three years, but it did not immediately translate into significant new development. After two and a half years, the Bay Area panel had indicated a change. With the current survey, Southern California developers have joined their Bay Area counterparts and approximately 25 percent of the survey participants are planning to start new development in the coming 12 months.
Industrial Growth Driven by California Manufacturing
Despite uncertainty about Europe' economic future and moderate growth in California import activity, there is strong optimism in California's industrial space markets, that should generate new building activity in the next 12 months as well. This optimism has been present in the survey panel for more than two years with industrial space occupancy rising to 96 percent in both Los Angeles and Orange County driven by growth in California manufacturing exports.
The Allen Matkins /UCLA Anderson Forecast survey indicates that opportunities for new developments have emerged in the industrial space market - particularly in Los Angeles and Orange County markets.
For a copy of the latest Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey and Index Research Project, please visit www.uclaforecast.com.
The Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey and Index Research Project polled a panel of California real estate professionals in the office space and investment market, on various aspects of the commercial real estate market. The survey is designed to capture incipient activity by commercial real estate developers. To achieve this the panel looks at the markets three years in the future, and building conditions over the three year period. It was initiated by Allen Matkins and the UCLA Anderson Forecast in 2006, furtherance of their interest in improving the quality of current information and forecasts of commercial real estate.
About Allen Matkins
Allen Matkins, founded in 1977, is a California-based law firm with approximately 220 attorneys in four major metropolitan areas of California: Los Angeles, Orange County, San Francisco and San Diego. The firm's core specialties include real estate, real estate and commercial finance, bankruptcy and creditors' rights, construction, land use, natural resources, environmental, corporate and securities, intellectual property, joint ventures, taxation, employment and labor law, and dispute resolution and litigation in all these matters. For more than 30 years, Allen Matkins has helped clients turn opportunity and challenge into success by providing practical advice, innovative solutions and valuable business opportunities. When clients' challenges require experienced trial counsel, Allen Matkins has a proven track record of successful litigation before juries, judges and arbitrators. Allen Matkins is located on the Web at www.allenmatkins.com.
About UCLA Anderson Forecast
UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state's rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001. Visit UCLA Anderson Forecast on the Web at http://www.uclaforecast.com.
About UCLA Anderson School of Management
UCLA Anderson School of Management is among the leading business schools in the world. UCLA Anderson faculty members are globally renowned for their teaching excellence and research in advancing management thinking. Each year, UCLA Anderson provides a distinctive approach to management education to more than 1,800 students enrolled in its MBA, Fully-Employed MBA, Executive MBA, Global Executive MBA for Asia Pacific, Global Executive MBA for the Americas, Master of Financial Engineering, doctoral and executive education programs. Combining selective admissions, varied and innovative learning programs, and a world-wide network of 37,000 alumni, UCLA Anderson develops and prepares global leaders. Follow UCLA Anderson on Twitter at http://twitter.com/UCLAAnderson, or on Facebook at http://www.facebook.com/uclaanderson
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