The USC Lusk Center for Real Estate held its annual market forecast presentation Tuesday, Dec. 5, and the events were livelier than usual, according to Dr. Delores Conway, director of the Casden Real Estate Economics Forecast. "This is the best year!" Conway said in an interview. The panel discussion drew nearly 200 people, she said. Although the annual report covers all of Southern California, Downtown Los Angeles figured more prominently and positively in the forecast than in the past. "Downtown hit, what I would call, a historic low in vacancy rate," Conway said. "We are seeing people return to Downtown." According to the study, the vacancy rate for office space in Downtown dropped from 15.9% to 14.3% in 2006. Conway attributed the improvement to residential conversions that have removed office units from the market at a time when employment is picking up. Conversions have also resulted in the extremely low industrial vacancy rate, which hovers between 1% and 2%. The demand for office space Downtown, Conway said, will grow, as will Downtown rents, which the study showed are not far below the County average. Conway added that the first new office high-rise since the 1990s - a 50-story office tower announced by Maguire Properties - was proposed this year, showing that it is just a matter of time before Downtown catches up to other areas of Los Angeles.
