BOOM ON THE HORIZON FOR CERTAIN PLAYERS
by Justin da Rosa
The commercial real estate sector in California has reached its highest level since 2001, according to a UCLA real estate survey, which examined seven of the state’s major markets.
“Continued optimism in this survey is supported by job and income growth and a lack of sufficient building supply,” said Jerry Nickelsburg, adjunct professor of economics at UCLA Anderson School of Management and senior economist with the UCLA Anderson Forecast. “While the outlook remains positive through 2018 with no weakening in occupancy rates, a few of the survey panel participants did express slight caution with regard to this next stage of the CRE building cycle.”
Multi-family residential is one area that is expected to see strong growth. 74 percent of participants started a new project within the past 12 months and even more plan on kicking a project off in the next six months.
Over the course of the next year, 40 percent of the survey panelists expect to begin at least one new development project, compared to 23 percent who started one in the past 12 months.
“Available financing, low cap rates, an increasingly high demand from technology, advertising, media and information companies, and a shortage of multi-family housing have sparked the industry boom,” said the Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey, conducted by the Allen Matkins law firm and UCLA’s business school.
According to the survey, the real estate market in California is set to experience “continued growth in commercial property development.”
And while current originators are set to benefit, newcomers to the industry have likely identified the same trend.
California received more mortgage originator license applications (2,043) than any other state in the second quarter of this year, according to MPA research.