Office and industrial markets in the Los Angeles region will start to show "signs of recovery" in mid-2003, according to a forecast from the University of Southern California's Lusk Center for Real Estate. The forecast also calls for a "full blown recovery" in the region's office market by 2004, accompanied by declining vacancy rates, rising rents, and less-generous concessions from landlords whose profit margins will noticeably improve. Raphael Bostic, director of the Casden forecast at USC's Lusk Center expects the region's ports and manufacturing sectors to begin improving in 2003, creating more demand for industrial and warehouse space in the Inland Empire, especially in the Ontario airport area. The Los Angeles region has had only a moderate downturn and will therefore have a moderate recovery, according to Mr. Bostic. He said, "This relatively benign story for the region masks the great variation in the economic and real estate performance of individual sectors." In Los Angeles County, the San Gabriel Valley office market is expected to have the strongest growth, starting next summer. The Mid- Wilshire and San Fernando Valley office markets are also expected to perform well by midyear due to downtown proximity and affordable rents.
December 30, 2002