The Winter/Spring 2019 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey shows that despite the recent uncertainty in the stock market, increasing cap rates, and slower economic growth, developers’ views on California commercial real estate markets have not changed much from six months ago. The biannual survey projects a three-year-ahead outlook for California’s commercial real estate industry and forecasts potential opportunities and challenges affecting the office, multi-family, retail, and industrial sectors.
Cushman & Wakefield’s Carine Mamann was one of the industry leaders who participated in analysis of the survey results. A Senior Director in Retail Services, Carine represents landlords and tenants in innovative and high-end street retail across Los Angeles and brokered many of L.A. County’s most prominent retail sales and leases last year.
As overall retail sales in the U.S. increased at a 5.3 percent annual rate over the past year, net store closings and traditional shopping mall stress remain prevalent due to the shift from brick-and-mortar to online shopping, resulting in too much aggregate space in retail markets. Between the last two surveys, internet sales have grown at a 10.7 percent rate, twice that of total retail sales growth. As such, a net 2,900 store closings nationwide occurred in 2018. This is a phenomenon likely to continue for at least the next three years.
While the current survey extends the recent stretch of pessimism about future retail markets, Carine maintains a bullish outlook for Los Angeles.
“In Los Angeles, we’re not seeing what other people are seeing right now. Rodeo Drive has a 2 percent vacancy rate. North Beverly Drive has a 5 percent vacancy rate. I would say a lot of the big luxury guys are expanding right now. LA is a healthy market.”
+1 310 595 2235