According to the Summer 2024 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey, a majority (71%) of participants in California’s commercial real estate industry predict an increase in distress levels and a decrease in new development over the next three years. The primary concern for these stakeholders is interest rates, indicating ongoing challenges and potential opportunities.
John Tipton, partner at Allen Matkins, notes that changing consumer behavior will lead to transformations in traditional real estate usage. To address this shift, clients are working with the firm to adjust their development and investment strategies by incorporating adaptive reuse techniques, digital integration methods,and sustainable practices.
The bi-annual survey conducted by Allen Matkins/UCLA Anderson Forecast gathers insights from a panel of California’s real estate professionals on their projections for commercial real estate trends over the next three years. This includes multifamily housing as well as office spaces,vacancies,and industrial markets.
Optimism is increasing among respondents regarding demand for multifamily properties compared to previous surveys; 65% of Northern California respondents and 57% of Southern California respondents anticipate faster growth than supply. Additionally,the outlook for office vacancies shows improvement despite minimal new developments being planned.
