Steve Brown

As prices in Southern California continue to climb past peak levels and cap rates compress, some investors have begun to look elsewhere for opportunities. However, Radius Commercial Real Estate says that there are still strong reasons to remain active in the Southern California market, listing the strong economy—fifth largest in the world—a high ranking on the Opportunity Index, and population growth as a reason to buy in the market.

“You can't underscore or underestimate the power of California's robust economy. Southern California in particular is home to some of the best cities with the most attractive conditions for economic growth, particularly along the coast,” Steve Brown, principal and co-founder at Radius Commercial Real Estate, tells GlobeSt.com. “When you take into account key economic indicators, we remain in a healthy expansion with no real signs for concern for a real estate bubble. And with the consistent population growth, coupled with extremely low unemployment, we see a formula for continued demand on both the commercial and residential front.”

Population is a major reason for investors to continue to focus on Southern California, particularly compared to Norther California. “The majority of the population resides in SoCal, so that's where investments should be concentrated,” says Brown. “Of course the Bay Area remains strong with a high concentration of tech industry employers, but we have seen the migration or at least healthy expansion of tech into Southern California with Silicon Beach now attracting a lot of investment, for example. You're seeing Google leasing an entire Westside L.A. mall and that will have a positive impact on the entire neighborhood. Plus we continue to attract players like Amazon and Microsoft.”