Construction Shovels Stall in Parts of SoCal

Commercial construction projects paused during the pandemic in many parts of Southern California. Construction projects in Los Angeles and San Diego, specifically, were put on hold, but in Orange County, construction activity largely carried on without issue. In California, construction activity was considered an essential business, but ongoing projects had to adhere to health and safety guidelines.

“In Los Angeles, we saw a considerable number of commercial real estate projects go on hold especially in the hospitality and commercial tenant improvement sectors. Large corporations that had a book full of projects for 2020 paused on them immediately in March till end of year,” Anu Rao, VP at JLL, tells GlobeSt.com.

In San Diego, there was a similar trend. Projects early in the development phase were put on hold. “In San Diego commercial real estate construction has slowed down as stay at home orders were put in place,” says Dominica Correia, VP at JLL. “Construction that was already underway, continued and those projects were executed.  For projects in the conceptual phase, companies took a pause to decide if they wanted to move forward.”

In Orange County, construction projects that had not yet started were also stalled, but otherwise, construction carried on as scheduled. In the market, fewer new projects paused than in other Southern California markets. “This year has clearly forged a path none of us could have ever forecasted, however the pandemic has had far less an impact on Southern California as compared to other markets,” Marty Potts, SVP at JLL, explains. “Since March 2020, there has been much uncertainty in the Orange County market, as we have seen construction projects ongoing maintaining their trajectory toward completion without interruption, with social distancing measures being mandated.”

Of course even in Orange County, construction projects in retail and hospitality were more likely to stall. “While it’s no secret retail and hospitality have experienced the worst of this pandemic, other sectors like industrial, multi-family, life sciences and tech companies have seen considerable growth in Orange County,” adds Potts.

In Los Angeles, on the other hand, large projects were more likely to move forward during the pandemic. “Large development projects in construction continued on their schedule with a brief pause for a couple of weeks to review the safety measures required by CDC,” says Rao. “Overall contractors did a phenomenal job of adjusting to the situation, improvising with the new guidelines every week and keeping the sites safe and on schedule.”

However, planning department processes and development plan checks set developments back. “Planning department at cities quickly figured out on-line system for plan check and put it in place in a short time frame,” says Rao. “However the plan checks and permits took twice as long and are very delayed and holding up projects in all cities around LA. Inspections for job sites had some initial setbacks but caught up by May 2020 and are going comparatively well.”