L.A. “The Shining Star” of CA Office

Developers and investors have a strong outlook for the Los Angeles office market—but we can’t say the same about other major California markets. The semi-annual joint forecast between UCLA Anderson Forecast and Allen Matkins, which GlobeSt.com has obtained exclusively, is called The Turn of the Cycle and shows a clear change in sentiment for the three-year outlook. The survey asks commercial real estate professionals their forecast for six California office markets, and developer sentiment was negative in all six markets except Los Angeles and San Francisco.

“If you look at the office space chart, the northern markets are in their third survey being negative,” John Tipton, operating partner at Allen Matkins, tells GlobeSt.com. “The reason for that, really all along, is that San Francisco led out of the recession. It was the bright shining star, and it was a lot brighter and a lot earlier than other places in the state. Down South, if you look at Orange County and San Diego, there has been a progressive notching down and for the first time, it has gone down below 50%. Los Angeles, on the other hand, has not only stayed positive, but it has notched up a little bit with people more optimistic than it was six months ago. People in the survey believe that even though there is a lot of construction going on in Los Angeles today, it is not sufficient to meet the demand three year out.”