In Los Angeles, the economy is finally beginning to gather momentum, and the largest employment gains have been in the hospitality sector. We predict 2% annual job growth from 2013 to 2015. Below is a breakdown of the 2013 forecast for the Los Angeles market:

L.A. Office Market

• Job growth in high tech, education and entertainment will fuel job creation in 2013.
• Vacancy is around 14% and should drop to around 13.5% by the end of the year.
• Lease rates should rise by 3% in 2013.

L.A. Industrial Market

• Tenants between 100,000 and 250,000 square feet have been driving the positive absorption seen in Los Angeles, and we anticipate that this will continue in 2013.
• Vacancy is around 4.6% and should drop to around 4.2% by the end of 2013.
• We predict that industrial lease rates will rise by 3.5% this year.

L.A. Retail Market

• The retail sector will benefit from cheaper housing this year, which will fuel population growth.
• Vacancy is at approximately 5.2% and should drop to around 5% by the end of 2013.
• We anticipate that lease rates will rise by 3% in 2013.

The big news in the Inland Empiremarket is that jobs are finally being created. The largest gains in employment have been in the trade, transportation, and utilities sector, as well as the hospitality sector. We forecast just under 2% annual job growth from 2013 to 2015. The Inland Empire's 2013 forecast includes:

I.E. Office Market

• Job growth in trade - the result of an expected increase in Los Angeles port activity - will fuel job creation in the Inland Empire throughout 2013.
• Vacancy is at approximately 15.7%, and we predict it will drop below 15% by the end of 2013.
• Office lease rates should rise by 1.2% in 2013.

I.E. Industrial Market

• With over five million square feet delivered in 2012, spec development is back. We forecast more spec development in 2013.
• Industrial vacancy is around 6.7% and should drop to around 6.2% by the end of 2013.
• We predict a 6.5% increase in lease rates in 2013.

I.E. Retail Market

• We anticipate modest growth in the retail market in 2013.
• Vacancy is at approximately 8.3% and should drop to around 8% by the end of the year.
• Retail lease rates should rise by 1.5% in 2013.

The economy continues to improve in the Orange County market, and professional and business services jobs are leading the way of future job growth. The financial and hospitality sectors have produced the largest employment gains, and we predict just under 2% job growth from 2013 to 2015. The Orange County forecast includes:

O.C. Office Market

• Job growth in professional and business services will fuel job creation in 2013.
• Vacancy is around 13.75% and should drop to around 13% by the end of the year.
• We predict that office lease rates will rise by 2% in 2013.

O.C. Industrial Market

• We predict an ongoing shortage of supply in the 30,000-to-100,000-square-foot range in 2013.
• Industrial vacancy is at approximately 4.6%, and we predict that it will drop to around 4.2% by the end of the year.
• Lease rates should rise by 4% in 2013.

O.C. Retail Market

• Job creation will lead to more high net-worth households in 2013, which will help retail sales.
• Retail vacancy is around 5.8% and should drop to around 5.2% by the end of 2013.
• We predict that lease rates will rise by 4.5% in 2013.

The San Diego economy continues to grow, with hospitality and professional business services sectors leading employment gains. We predict 2.5% annual job growth in this market from 2013 to 2015 and forecast the following:

San Diego Office Market

• In 2013, growth in architecture, engineering, scientific, and R&D subsectors will fuel job creation.
• Office vacancy has started the year at approximately 13.5% and should drop to below 13% by the end of 2013.
• We predict a 3% increase in lease rates in 2013.

San Diego Industrial Market

• We predict that industrial vacancy will continue its descent in 2013. Currently, vacancy is around 7.1% and should drop to below 6.8% by the end of the year.
• Industrial lease rates will likely rise by 3% in 2013.

San Diego Retail Market

• Recent occupancy gains have been in gyms and grocery stores, and we expect this trend to continue in 2013.
• Vacancy is at approximately 4.6% and should drop to around 4.2% by the end of the year.
• We predict a rise in retail lease rates this year, expecting an increase of 4.5%.

Jerry Holdner is the VP of market research for Voit Real Estate Services in the Irvine, CA office. He can be reached at [email protected]. The views expressed in this column are the author's own.