Article by Dereck Andrade The San Gabriel Valley's office and industrial markets will surpass those of the rest of the Southland in 2003, according to an economic report released today by the University of Southern California. The study by the USC Lusk Center Casden Real Estate Economics Forecast says the San Gabriel Valley will have the strongest growth starting next summer. "It has the advantages of relatively low rents, proximity to the downtown business center, and strong demand from the business services, finance and real estate sectors, which will lead the county's recovery,' said Raphael Bostic, director of the Casden Forecast, during a briefing for real estate executives at USC. The Inland Empire's office market should also have strong growth in 2003. Vacancies will fall and rents increase at an accelerating rate during 2003 and into 2004, according to the study. The trade-based Ontario Airport, San Bernardino and Riverside office markets will have the strongest growth. The Los Angeles office and industrial markets will not "take off' until 2004, while Orange County's markets will continue to be muted. "By 2004, the region's office market should be in a full- blown recovery with declining vacancy rates, rising rents, and less-generous concessions from landlords whose profit margins will noticeably improve,' Bostic said. USC's report says the region's ports and manufacturing sector will begin to improve in 2003, creating more demand for industrial and warehouse space in the Inland Empire, especially in the Ontario airport area, which the study said remains "recession proof.' The Casden Real Estate Economics Forecast analyzed data supplied by Grubb & Ellis, focusing on the Los Angeles County, Orange County and Inland Empire office and industrial markets.
December 4, 2002