An Economic Turn Is Looming

Tony Natsis is a partner at Allen Matkins.

LOS ANGELES—The results from the Allen Matkins/UCLA Anderson Forecast Survey, which GlobeSt.com has obtained exclusively, show that there may be a turn in the market looming in the near future. The survey asks California commercial real estate professionals their three-year market outlook, and many believe that retail and office are topping out while industrial and multifamily sectors have runway remaining. While there have been questions about the end of the cycle for years now, this is the first time since the recession that the survey has returned a tempered outlook from professionals.

“When you are in an up cycle, people wonder when it is going to end, but they never change their actions. Now, people are starting to change their actions,” Tony Natsis, a partner at Allen Matkins, tells GlobeSt.com. “They are saying, ‘I don’t want to be standing at the end of this musical chairs game.’ An example is of some large deals that are coming to market to sell. It used to be that deals would have 20 bidders and everyone would have everything in on time. Now someone still wants to buy the property, but they aren’t rushing to buy it and they aren’t getting everything in on time. Those are the well-heeled people. You end up with the same pricing, but it is less frothy.”