NEWPORT BEACH, CA—The commercial real estate market will remain strong in 2016 as long as there’s no hard landing in China, said several Voit Real Estate Services brokers, who spoke recently at the company’s economic forecast event here. The event drew more than 150 CRE professionals to the Big Canyon Country Club to learn what experts are anticipating from the industry in the new year GlobeSt.com has learned exclusively.

Keynote speaker Esmael Adibi, professor and director for the Anderson Center for Economic Research at Chapman University, provided some compelling facts and outlooks on the overall economy in 2016, covering topics including real GDP, consumer spending and job and wage growth. Adibi anticipates that the economy will remain strong and continue to grow. He anticipates steady job growth, a gain in real income, a pickup in consumer spending, slower home appreciation and solid growth within the healthcare sector. Alternately, he warned about the possibility of a hard landing in China, geopolitical events, terrorism and missteps in policy.

Adibi explained that China is a significant factor that cannot be ignored. He says that no economy can grow 10% year after year. He also touched on the recent increase in interest rates by the Fed, noting that while Janet Yellen predicts four interest rate increases in 2016, Adibi anticipates that the Fed will not increase interest rates more than two times in 2016.

Following Adibi’s economic overview, a panel of four Voit executives—one from each of its offices in Orange County, Los Angeles, San Diego and the Inland Empire—examined the market on a micro level, discussing the opportunities and trends in each of their specific Southern California markets.

Seth Davenport, SVP and board member, who works in Voit’s Anaheim office, said that because Orange County is for the most part built-out, new development has dropped dramatically. He noted that while from 2000 to 2010 250 new buildings were constructed within Orange County, in the five most recent years this number has shrunk to a total of 35 new buildings. In 2016, Davenport expects owners, investors, and brokers to have to be more opportunistic when it comes to acquiring and leasing product.  While new development is nearly a thing of the past, functionally obsolete product in the market presents a strong opportunity, requiring an open mind and a fresh approach from owners and investors.

Walter Chenoweth, EVP from Voit’s Inland Empire office, noted that industrial in the Inland Empire in 2016 will remain strong. He reported that unlike the Orange County market, in the Inland Empire there is plenty of space to handle the continued demand. In fact, he said, for industrial buildings in the 500,000-plus-square-feet category, there is 10 million square feet currently standing with another 12 million square feet under construction. Chenoweth said while this sounds fairly large, these buildings will only provide approximately 18 months of total supply within the Inland Empire market. In 2016, he expects the strong demand from retailers and consumer companies in the market to absorb most of what is available.

The San Diego market tells a different story. Similar to Orange County, there isn’t much developable land left, according to Brian Mulvaney,SVP from Voit’s San Diego office. Mulvaney explained that even so, there continues to be strong growth within the telecom and healthcare sectors, as well as significant growth from biotech industries throughout the area. He anticipates this trend will continue throughout 2016.

Rents in Los Angeles also continue to grow, according to David Fults,SVP from Voit’s Los Angeles office. He reports that there was a time when tenants were content if they were “one-city adjacent” to Los Angeles. Today, rents continue to increase at such an exponential rate that tenants are willing to commute and move farther and farther away from the city.

As an example, he points to the San Gabriel Valley, which was the last location in Los Angeles County where tenants could find value. Today, he notes that even in the San Gabriel market, rents are rising, driving tenants to areas farther outside of the Los Angeles area, even in the class-B product.