In California, there has been an ongoing boom in the area of commercial property. However, the number of commercial real estate transactions appears to have been dropping slowly, especially in the areas of office space and retail. Still, areas of the real estate market that continue to be favorable are multi-family and industrial markets.
In a recent university survey, five markets in California were explored, including the Los Angeles market. According to the survey, office developers have not been as optimistic as they were back in 2014 about real-rental-rate and vacancy-rate growth. In addition, it is not clear what will happen in the traditional retail market. Even though brick-and-mortar stores are not expected to go away, e-commerce has forced many retail stores to try to reinvent themselves.
Industrial space continues to be in demand for several reasons. These include the demand for manufacturing, as well as efforts to export goods to Mexico and Asia. E-commerce is also an underlying force that is driving the strengthening of the industrial market. In fact, industrial REIT shares grew more than 17 percent in 2016 as a result of e-commerce's rapid growth.
With the industrial market and multi-family markets still appearing promising in California, now may be an ideal time for people to pursue commercial real estate transactions in the Golden State. Unfortunately, simple mistakes can quickly cause a deal to collapse, which can be costly in terms of both time and money. Appropriate legal guidance may help people to complete their commercial real estate deals in ways that help them to achieve their individual goals.
Source: therealdeal.com, "California real estate leaders foresee topping off in commercial market: survey", Katherine Clarke, July 19, 2016