Ongoing volatility in capital markets is creating new opportunities in commercial real estate, according to the 2023 Summer Allen Matkins/UCLA Anderson California Commercial Real Estate Forecast released Wednesday. Although sentiment on the office market turned decidedly negative compared to optimism in the sector a year prior, bright spots have emerged across the other market segments, with interest expressed in new development investments despite macroeconomic headwinds.

The Allen Matkins/UCLA Forecast is a biannual survey that polls a panel of California’s real estate professionals to project a three-year ahead outlook for commercial real estate and the macroeconomic trends impacting industry participants across the multifamily, office, retail and industrial markets. The latest edition reported bullishness in multifamily for specific markets, industrial demand driven by the electric vehicle boom and opportunities stemming from retail vacancies.

“While the direction of office usage remains uncertain, the 2023 Summer Forecast indicates that there is a light at the end of the tunnel for other real property asset classes, creating cautious optimism among industry participants,” said Allen Matkins partner John Tipton. “As interest and cap rates rise, we are working with many clients looking to navigate new development and investment opportunities, and engaging market- and sector-specific partners to capitalize on existing market conditions.”