Due to its huge and varied economy and multiple submarkets, the non-residential real estate sectors in Los Angeles continue to top at least one chart.
Writing in today's Wall Street Journal, Jennifer Forsyth quotes Bob Bach, SVP of research for Grubb & Ellis, who suggests that those markets hit by the sub-prime fall-out will, due to slower economic growth, also impact the non-residential markets:
Each year, Bob Bach, senior vice president of research for Grubb & Ellis, a Chicago-based real-estate services firm, analyzes economic trends, real-estate fundamentals and demographic information to make his predictions of the best markets to invest in for each of the main commercial sectors: apartments, industrial, office and retail. But for 2008, Mr. Bach made some tweaks: he purged those markets that have been hard hit by foreclosures related to subprime mortgages or by oversupply in condominium development -- even if his formula would have indicated those cities should be included otherwise.
In contrast to the residential market, fundamentals for commercial real estate -- such as occupancy and rental-rate growth -- have held up fairly well over the past 12 months. Yet, the threat of recession is now raising questions about how long that health can be sustained. Already, commercial valuations are beginning to drop.
And yet making the #1 spot for office, industrial and apartments? Los Angeles (its retail market clocked in at #2). Other California markets making the Top 10 list for various uses include the Inland Empire, Orange County, San Diego, San Francisco and the Oakland/SF East Bay area.
No comments:
Post a Comment