LOS ANGELES—Owners who maintain their properties and provide the latest amenities will continue to attract Millennials; those who don't do this risk losing them, Avison Young's principal and managing director Chris Cooper tells GlobeSt.com. With the four-year-old firm having established its presence in the market like a much more mature brokerage, we spoke exclusively with Cooper about how 2016 will compare with 2015 and what to watch for next year.

GlobeSt.com: What, in your opinion, were the key differentiators for the commercial real estate market this year compared to the prior couple of years?

Cooper: One of the most interesting things that happened this year is the valuation of the Chinese yuan, which caused a little bit of slowing of Chinese investors into Southern California. We're seeing more of the Canadian investors, which is great for our company because we're Canadian based. The Germans are still very strong in investment for Europe, but we're seeing more North American investors at this junction.

Also, there was some concern a couple years ago of how solid the recovery will be, and now that we are in 2015 and going into 2016, the recovery seems very solid. Now, the question is for how long? I don't think an interest-rate hike is really going to upset the apple cart. At the end of the day, 25 basis points will let some of the air out of the balloon, as Mark Rose says. It's a healthy thing, and hopefully the capital markets will behave accordingly. But there are a lot of geopolitical stresses right now—the Middle East, Russia, the Chinese economy and the presidential election coming up next year. These all can cause uncertainty and some consternation. That said, fundamentals are still pretty strong, and demand continues as well.

GlobeSt.com: How do you think 2016 will compare to 2015 in terms of investment and leasing activity?

Cooper: People still need to place money. It's important to remember that the value for these assets is the credit tenant's promise to pay rent—it's not the bricks and mortar. Your tenancy is important. What you're going to see in comparison to prior years is reinvestment into assets, whether it's at an extreme level, adaptive re-use, creative or mixed use. Kilroy is doing amazing things in Hollywood, and I think we'll continue to see investment in some of our major class-A high-rises like the Observation Tower, the US Bank Tower lobby, the redesign of 7^th and Fig or a new building with a totally brand-new concept. It's different from the '70s and '80s. In terms of attracting tenants, amenities and furthering the live/work/play environment that Millennials want will continue to be important. If you do that, the value of your asset is going to go up, and you will continue to attract this type of tenant. If you don't invest in your asset, you will lose tenants.

GlobeSt.com: Which sectors should we watch next year and why?

Cooper: We're bullish on multifamily, especially here in Southern California where we continue to grow a live/work/play environment in markets like Downtown L.A., Playa Vista, Hollywood, Orange County and San Diego. Millennials and Gen-Xers don't want to commute on the freeway; they want to walk or ride a bike to work. Everybody's getting priced out of West L.A., so they're moving south to Playa Vista. Also, e-commerce is growing—7.4% of US retail sales in Q3 2015 were e-commerce, compared to 6.5% last year; that's almost a 1% increase. Look for an increase in industrial for fulfillment and retail for mixed use, with a retail band on the bottom and multifamily or office above. You won't see as much traditional office, except for biotech in San Diego.

GlobeSt.com: Which Southern California markets do you see as the ones we should watch, and why?

Cooper: El Segundo is a market to watch, as is South L.A., Hollywood, Mid-Wilshire and the Arts District in Downtown L.A. Life-science companies are really continuing to grow for office and flex space in San Diego—Torrey Pines, UTC, Sorrento Mesa, Sorrento Valley—and in Orange County. The industrial markets are doing extremely well. Industrial and R&D are strong in Orange County, which is a great place to work and live.

GlobeSt.com: Tell us about Avison Young's Southern California region's growth this year.

Cooper: Jonathan Larsen was huge for us. He provides a tremendous step into both the large corporate-tenant category and into landlord work. He provided a lot of professional horsepower also in terms of leadership in the region and recruiting. We also recently brought in Eric Moore and several project-management professionals. We continue to recruit the best and the brightest in the industry. We want brand-elevating top professionals, whether they're brokers, project managers, property managers, etc. We have also picked up several new assignments in Southern California, including leasing and management of the San Diego Tech Center. Growth is being done rapidly, but carefully and strategically. We will also continue to expand our service-line coverage; we already handle industrial, retail and office and are expecting to get into the multifamily arena very soon.

GlobeSt.com: What do you have planned for AY SoCal next year?

Cooper: If the right opportunity came along, we might open another office, but it has to be the right opportunity driven by client need and growth. But definitely for 2016, we will continue to bolster what we've already built. We have six offices and well over 110 people now, and we're very pleased with the results from just four years of work. Who we hire and who we won't comes down to the culture. We're not for everybody. We're a principal-led organization of decision-makers. We keep our principals very engaged in that process, and we've taken passes on people with big names in commercial real estate who wouldn't be happy here. You must participate and take accountability to be here. We're expecting a strong 2016; we have plenty of fuel in the tank and we remain very bullish.