Outlook is glum nationwide, but locally, commercial centers such as Fashion Island have affluent community to sustain them.
NEWPORT BEACH -- Salespeople and executives in the local real estate world Wednesday turned out by the hundreds to the exclusive Pacific Club to hear a briefing from luminaries with their fingers on that industry's pulse.
The assembled guests, a standing-room crowd of about 320 in the club's main ballroom, clapped as speakers at the evening event put a brave face on largely glum news about the economic recovery. Commercial real estate markets locally, the experts said, are bobbing above broader trends, but are still fairly sluggish.
"As I go around the country, it's getting harder and harder to find a sense of optimism," said Stan Rosscolor>, a former vice chairman at Ernst & Young. "There certainly is a lot of negativism out there."
The USC Lusk Center for Real Estatecolor> sponsored the event, which also featured Bill Halford, the vice president of office properties at the Irvine Co., and Newport Beach residents Robert Best and Stephen Duffy. Best owns Costa Mesa shopping center developer Westar Associates, and Duffy heads up real estate advisory services out of Ernst & Young's Irvine offices.
In his remarks, Duffy warned about the "soft commercial real estate markets."
Best was somewhat more optimistic, especially about Fashion Island and South Coast Plaza, but said the mid- and lower-tier centers are undergoing major changes.
"The strong will survive," Best said. "There is a lot of dead retail out there, and a lot of it is functionally obsolete."
During an interview after his public remarks, Best said Newport-Mesa's premier centers are "going to be fine" because they offer specialty shops and benefit from a wealthy surrounding community. The community is also largely built out, without much more room for new retail centers, he said.
"In Newport Beach, the demographics are very unique," Best said. "There's not a lot of land where you can build malls."
Stuart Gabrielcolor>, the Lusk Center's real estate director and a trained economist, also spoke. Gabriel bemoaned the economy's "jobless recovery" and said the county's gross domestic product would grow no more than 3% this year.