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Optimistic Outlook for California CRE, Construction Slows, Developers Gear up for Next Cycle
The Spring/Summer 2019 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey reveals a more optimistic outlook than has been observed the last couple of years. The biannual survey projects a three-year-ahead outlook for California’s CRE industry, and forecasts potential opportunities and challenges affecting the office, multifamily, retail, and industrial sectors.
The positive prediction for 2022 development leapfrogs UCLA Anderson Forecast’s prediction of a very weak economy through 2020, to its prediction of faster growth thereafter. The results indicate, that although construction activity is expected to slow down over the next 18 months, developers are already gearing up for the next CRE expansionary cycle.
While retail continues to be the weakest asset in commercial real estate, the latest Survey shows that after two years of pessimism in the Bay Area, the panel now reports that it is optimistic about 2022. In SoCal, there remains general pessimism, but it is not as uniform across panel members as in previous surveys. The explanation for this change in both regions has to do with the fact that demand has been shrinking of late due to the strong move to online shopping, and therefore, little new development has been occurring.
Watch the Allen Matkins/UCLA Anderson Forecast video below for a recap of the retail sector from industry experts including:
Allen Matkins’ John Tipton, UCLA Anderson Forecast’s Jerry Nickelsburg, Allen Matkins’ Alain R’Bibo, CBRE’s Lew Horne, and Colliers International’s Kitty Wallace.
For comments, questions or concerns, please contact Dennis Kaiser
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