“A less-than-confident outlook in the office sector” is the prevailing attitude from the just-released Winter 2023 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey. The findings come as the CRE industry continues to navigate rising interest rates, declining valuations and economic uncertainty across most asset classes.

The biannual survey polls a panel of California’s real estate pros to project a three-year ahead outlook for the industry and macroeconomic trends. “It is more important than ever that the commercial real estate industry embrace the changes of a post-COVID world to continue to play a crucial role in enabling the national economy,” said Allen Matkins partner John Tipton.

Breaking down each sector, the office outlook is gloomy, with the survey finding a significant decline in panelists planning new developments in 2023, and while industrial remains a strong performer, the sector is expected to normalize this year, according to respondents.

Meanwhile, the multifamily asset class continues to be bullish with the continued lack of supply in California, and panelists are also encouraged by new housing, tourism and open-air redevelopments that are stimulating a recovery in the retail market.