Since 2007, the UCLA Anderson Forecast and Allen Matkins have collaborated on a Commercial Real Estate Survey and Index to "better predict future California commercial rental rates and vacancy rates."
The latest survey was released today.
The survey is comprised of a survey of commercial real estate developers in each of San Diego, Orange County, Los Angeles, the East Bay, San Francisco and Silicon Valley and the current version "provides clues to current CRE asset prices and a turn around in the market." According the the press release:
"Over the past 18 months Class A commercial real estate values have increased to near peak levels. The increase is not supported by the current rental and occupancy rates. This rise in asset prices is either an indicator of investor expectations of improving fundamentals over the next three to four years or the beginning of a new asset bubble. The June 2011 Allen Matkins UCLA Anderson Forecast California Commercial Real Estate Survey, a forward-looking survey of commercial real estate developers, is consistent with an expected improvement in fundamentals."
UCLA Anderson Forecast Senior Economist Jerry Nickelsburg authored the report. He said:
"Optimism with respect to office and industrial market fundamentals in 2013 and 2014, which first appeared a year ago, is an important precursor to the re-start of commercial construction. While the overall sluggishness of the general economic recovery will engender a slow recovery in commercial real estate as well, the prospects are improving.”
The survey demonstrates increasing developer optimism in major California cities, which in turn justifies increased asset prices. Northern California markets in the Silicon Valley and San Francisco lead the state's turnaround, while San Diego and Los Angeles in the south not far behind.
The full report is available for download here.
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