LOS ANGELES-As a seasoned commercial real estate broker in the South Bay market, I have been a witness and participant in the region's downturns and recoveries. With the recent economic fiasco now in recovery stage, overall the South Bay market has proven to be very resilient, and has remained fairly unscathed as compared to other neighboring areas and previous real estate busts over the last few decades.

In broad terms, the market conditions for office, medical and retail leasing and sales continue to improve in most segments while others stay fairly stagnant in pricing and vacancy numbers. The brightest spot is the retail sector, showing surprising consistency in both price structure and low vacancy across the board at about 4.2%.

The regional leader in medical care, Torrance Memorial Hospital, recently completed a 65,000-square-foot specialty center located on Lomita Boulevard. This expansion is in response to an overall shift in the medical industry as consolidation continues to favor major regional players. Medical office space in the South Bay region is seeing about a 10% vacancy rate with rents slightly lower than last quarter.  

Suburban markets typically lag behind urban centers as recoveries kick in, and the South Bay office market is no exception. Office product has seen an increase of two percent in vacancy since 2010 with an average 15% vacancy overall. Rents are maintaining an average a $2.01 per square foot. Although it will take time to absorb existing vacancies, 2014 will see a reduction in the overall vacancy rate.

The number of office, medical and retail sector transactions have all increased over the past 12 months, which is an indicator of a tightening market and decreasing vacancies—especially given the lack of new product being developed in the region. The office sector will benefit the most from this tightening as space becomes less available in class A and B buildings throughout the South Bay.

Ultimately, the beach cities in the South Bay have always enjoyed high demand and will continue to fare the best as vacancies decrease and rents rise. We are even seeing sales prices rivaling—and in some cases—surpassing Westside Los Angeles product. Overall, as the economy makes its slow recovery, the South Bay market will continue to tighten and thrive.

Rich Higgins is managing director of Charles Dunn Co. The views expressed in this column are the author's own.