Nickelsburg: u201cThere's some conservatism on the office demand/absorption side.u201d

(Save the dates: RealShare Apartments East comes to the Hyatt Regency in Miami, FL, on February 26, and RealShare Los Angeles comes to the Hyatt Regency Century Plaza in Los Angeles, CA, on March 27.)

LOS ANGELES-Developer sentiment remains optimistic toward multifamily and industrial asset types and cautiously optimistic toward commercial office markets, according to the latest Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey. The three-year outlook for the state’s overall CRE industry remains predominantly upbeat, the survey that was conducted in November 2012 reveals.

“Our survey shows that, despite the new projects underway—and there are many of them throughout the state—our panels are very optimistic about what those markets are going to look like three years hence,” said Jerry Nickelsburg, UCLA senior economist, in a prepared statement.

The survey showed slightly less enthusiasm for office market development by 2015. Although the sentiment for this market was still optimistic, it was not as positive as it had been in previous studies. Nickelsburg tells that there are two reasons why the office outlook was slightly less positive for survey-takers than in recent years. “Landlords say that there is a move to use less office space per employee by office-using business, so there’s some conservatism on the demand/absorption side. Also, the survey was taken in November 2012, when we were possibly going to jump off the fiscal cliff and people were worried about another recession. You would expect that sentiments would want because people would have been a little more nervous at that time.”

John Tipton, partner with Allen Matkins, tells that the office-market numbers can be misleading. For one thing, the survey-takers were asked to look at where they think the market is going to be for vacancy and rental rates three years out—not where it is today. Also, on the actual graph, anything above 50 is optimistic, and anything below 50 is pessimistic, creating a fine line between the two opposing sentiments.

“Sometimes you can read too much into a particular number,” says Tipton. “This is not an exact science. The main point is that across both product types and the markets, when people look three years out they are remaining optimistic—a little less optimistic in the office market, but that doesn’t mean pessimistic And they’re pretty darn bullish in industrial and multifamily.”

For the complete survey, click here.

As previously reported, in its fourth and final quarterly report of 2012, the UCLA/ Anderson Forecast’s outlook for the US says that GDP will grow at less than a 2% annual rate through mid-2013. After that, the forecast expects growth to pick up and exceed 3% for most of 2014 with housing activity leading the way.

How does the office market look in your area? Leave your comments in the box below.