year 2013 brought many changes to the commercial real estate industry, across
all asset types – office, retail, multifamily, hospitality and industrial. A review of these changes demonstrates substantial
market improvements, with some lingering stagnation in activity and investment performance.
office market segment saw trends toward more efficient use of space and more collaborative work areas, with continued integration
of technology. Unfortunately, this was clearly manifested in statistics which show that while office employment was growing
at about 2%, demand for office space was growing at only about 1%.
Industrial property investors saw improving
occupancy gains and a widening recovery, with little new warehouse space being delivered to the market. Manufacturing continued
to expand, and job growth in utilities and transportation led all other sectors in the service industry.
of retail assets doubled from the same period in 2012, and retail properties experienced a 12 percent price appreciation.
The Los Angeles metropolitan area vacancy rate for retail stood at 6% as of the third quarter of 2013.
for apartment buildings rose 14 percent by 2013Q3, reaching an average unit price of over $107,000 nationally. The multifamily
vacancy rate for the Los Angeles metro area reached a stunning 3.1% for the same period.
to the hospitality investment segment, and credit-worthy projects found readily available financing.
Adaptive reuse became prominent as investors pursued the repurposing of dated
urban properties into hotels.
Commercial real estate professionals enjoyed
the improvements experienced in 2013, and look forward to 2014 with hope for continued recovery.
BHGLAAR Commercial Committee