Construction activity has slowed in Southern California since the onset of the pandemic—but it could be set to rebound earlier than expected. Commercial construction starts in Los Angeles and San Diego are expected to increase next year. Orange County, on the other hand, could be impacted by outcome of the presidential election in November; however, specific asset classes are set to rebound faster than others.

In Los Angeles, even hospitality is already showing signs of recovery. Retail is the only sector expected to struggle to recovery. "We expect that Los Angeles commercial office projects are going to be rolled out aggressively as soon as the general economic outlook improves," Anu Rao, VP at JLL in Los Angeles, tells GlobeSt.com. "We see some activity around Los Angeles hospitality projects being renewed sooner than we expected, but retail is one of the last sectors expected to pick back up. Overall, the first quarter is going to be slower in Los Angeles construction as projects will be in design and permitting."

Similarly, San Diego construction will also rebound quickly, but new starts will return at a slower pace than pre-pandemic levels. "San Diego commercial real estate construction will continue to increase, however at a slower pace than expected," says Dominica Correia, VP of JLL in San Diego. "Industries that are continuing to do well are Industrial as well Life Sciences.  The typical office category will be slower to return as companies make business decisions based on employees working from home."