Allen Matkins/UCLA Anderson Forecast: Calif. Commercial Real Estate Will See Pandemic-Driven Impacts Through 2023
The Allen Matkins/UCLA Anderson Forecast, a survey done twice a year of commercial developers and financiers is predicting a pessimistic outlook for the next 3 years for the office, retail, industrial, and multi-family commercial real estate sectors.
Forecast Shows “Uniform Pessimism” Across All Markets
The Allen Matkins/UCLA Anderson Forecast, a survey done twice a year of commercial developers and financiers is predicting a pessimistic outlook for the next 3 years for the office, retail, industrial, and multi-family commercial real estate sectors.
The fact that the survey was done this time in the midst of a pandemic is thought to have considerable influence on the results. The retail sector was already having some issues brought about by the popularity of online shopping and a reduced need for actual, physical retail space. The pandemic magnified this with the advent of "shelter-in-place" and "social distancing" orders that further reduced the need for such space.
The advent of new practices stemming from the "work-at-home" revolution has further degraded the commercial outlook as the need for office space is also reduced. to affect all of the above sectors, much of that influence arising from Part of the drop in values could be traced to rising interest rates. However, it should be noted that the industrial sector is doing well, driven by a need for storage with the growing popularity of online shopping.
This article from the Commercial Observer contains all the details you need to know.
LOS ANGELES (July 29, 2020) – "The Allen Matkins/UCLA Anderson Forecast survey for California shows “uniform pessimism” across all markets, and a drop in sentiment for developers across all commercial real estate spaces through 2023. Panelists see retail continuing its downward spiral, and office market demand decreasing due to work-from-home policies. ..."
Commercial Observer | July 29,2020
1/3 Of Panelists Are Reducing Office Development By 15%
As stated above, the "popularity of work-at-home" policies with many large corporations is causing insecurity about the future of office space development. Of the panelists in the survey, most say that, at this time, their plans are not changing. However, fully 1/3 say they are ramping back office development plans by up to 15%. No matter how you look at it, this is not a good omen for that sector of commercial development.
