California Developer Sentiment Improves in Latest Allen Matkins Survey

The Summer 2021 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey is in—and it brings good news. The bi-annual survey, which asks developers their three-year outlook, shows an improvement in sentiment from the end of last year, signaling the beginning of the recovery. While developers continue to show the most optimism for industrial and multifamily, office and retail showed a marked improvement.

There is still great uncertainty about the future of the office market, but survey respondents are more optimistic that a return is coming. While sentiment improved, it remained below the 50% mark, indicating an overall negative outlook. In Northern California, about 30% of participants have cut back on development plans, and in Southern California, 40% have stalled development plans in the market. Still, Northern Californian developers said that demand will begin to grow in step with supply by 2024, and for that reason, many believe the pause in construction activity will be temporary.