Panels Embrace Opposite Views on Office

LOS ANGELES-Real estate professionals from different parts of the state espouse opposite views on how the office market will fare in light of the economic downturn and whether the credit crunch is worsening or easing, according to a newly released study called the Allen Matkins/UCLA Commercial Real Estate Survey. The survey, conducted for the third time over the past two years, polls California real estate professionals in the office space and investment market in Los Angeles, San Diego and Orange County. This latest survey, for the first time, also included San Francisco.

Results of the survey, which will be discussed this Wedndesday at the at the UCLA Anderson Forecast Conference at UCLA, show that the real estate professionals on the panels in Los Angeles and San Diego sense that while credit conditions are likely to remain tight for the near term, the credit crunch is starting to ease. But in Orange County and San Francisco, the panels believed the opposite is true.

Jerry Nickelsburg, UCLA economist and author of the survey results summary, explains that the survey asked the regional panels for their views on what market conditions will be like in 2011 and asked for the panel members’ views on likely changes. In Los Angeles, for example, the panel does not believe the office market will tighten between today and 2011. With an average vacancy rate in Los Angeles at levels lower than those of the past 20 years, today’s conditions represent a healthy office space market, the panel believes, and with new supply expected to come on the market over the next three years at a rate just about equal tothe expected increase in demand, the market will remain healthy.