Survey finds market recovery in California

Development in California is on the rise.

Some parts of California have taken significant strides toward recovery, according to a report completed jointly from Allen Matkins and UCLA Anderson Forecast.

Close to 70 percent of commercial property managers in the Los Angeles, Silicon Valley and San Francisco Areas think they will create new multifamily developments in the next year, according to the California Commercial Real Estate Survey from the two firms.

"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," said Jerry Nickelsburg, senior economist for UCLA Anderson Forecast.

Much of the need for new development throughout the Golden State is due to continually improving rental rates, as well as high occupancies throughout, the report said.

"This growth in multi-family housing is encouraging," said John Tipton, partner at Allen Matkins. "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."

In addition, office development improved in the parts of the state, as Los Angeles and the Bay Area showed strong returns, the survey found. Sentiment for this market was on the rise since the recession ended, but development did not take off until recently. However, one-quarter of property managers in these areas plan to create new development projects over the next year.

Industrial market growth was recorded in recent months, the report said. Even with continued global economic troubles – namely the struggles in the eurozone – many property management companies dealing in this market have been positive about the state's situation. Due to this, it is expected that the industrial market will increase development throughout California through the next 12 months.

Continued positive sentiment in the industrial market has been a theme over the past two years, and this was due to the industrial space occupancy rate jumping to 96 percent in both the Los Angeles County and Orange County areas, the report added. Manufacturing exports in the Golden State pushed much of the optimism and occupancy during this time. Furthermore, there is likely new developments set for both of the Los Angeles and Orange County areas in the near future.

Share
Disclaimer: All data and information provided on this site is for informational purposes only. Zoliath.com makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, opinions or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.