The Casden Real Estate Economics Forecast, released last week by the USC Lusk Center for Real Estate, predicted a positive outlook for Downtown's industrial sector, and modest improvement in the office market. According to the findings, Downtown's industrial real estate market has been a hotbed of activity, as commercial and residential developers compete for land. Residential developers are buying both industrial lots and buildings to convert into condominiums and apartments. The current 3% vacancy rate in the sector should remain low due to the shortage of large blocks of vacant land, the study found. In contrast, the vacancy rate for Downtown office buildings during the third quarter of 2004 was one of the highest in the county at 19.4%, though down slightly from the previous quarter. The average asking rent was $1.41, up one cent from the previous quarter. The forecast predicts vacancy rates and leasing activity will improve in 2005 as job growth picks up throughout the county, though it could be tempered by some new office construction in the area. "We've come through the recession with new job growth and optimism that the economy will continue to grow at a slow and steady pace," said Delores Conway, director of the Casden Forecast. "Economic activity occurring below the radar screen bodes well for office and industrial markets across the region."
December 6, 2004