The demand for office and retail space will continue to drop in the next few years in Southern California, but the need for apartments and industrial space will not diminish.
That’s according to the “Allen Matkins/UCLA Anderson Forecast” of developers and investors in SoCal and the Bay Area, according to the Los Angeles Times.
The survey’s three-year outlook focuses on the fallout from the coronavirus.
Around 75 percent of respondents said that the pandemic hadn’t changed their plans in the tight multifamily sector, but many respondents said the pandemic was factoring into plans in other markets.
The survey results suggest growth in the office sector won’t pick back up until 2021. A third of respondents said they were scaling back plans to develop new office space and three-quarters said their finances were stressed by the leasing environment, according to the Times.
Office tenants across L.A. County are trying to downsize their footprints to save on costs. During the second quarter, the amount of available sublease space increased from 1.1 million square feet to a record 6.1 million square feet.
Around two-thirds of respondents working in the Bay Area and Southern California said they would not develop any new retail properties in the next 12 months.
Conversely, respondents were bullish on the industrial sector — 60 percent of respondents in logistics-heavy SoCal said they were planning a new industrial project and 39 percent said they were planning multiple. [LAT] — Dennis Lynch