Download - Southern California CRE Overview
Southern California Commercial Real EstateOverview and Outlook
2014Al Pontius
Senior Vice President and National Director
February 2014
-9%
-6%
-3%
0%
3%
6%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*
Southern California United States
U.S. Employment vs. Southern California Employment
Y-O
-Y P
erce
nt
Ch
ang
e
* Through DecemberSouthern California includes Los Angeles, Orange County, Inland Empire and San Diego MSAsSources: Marcus & Millichap Research Services, BLS
Trailing 12 Months Job Growth*
Southern California: +115,500
United States: +2,322,000
U.S. Retail Sales Well Past RecessionUpward Momentum Slowing
Yea
r-O
ver-
Yea
r C
han
ge
$190
$220
$250
$280
$310
02 04 06 08 10 12 14*
Ret
ail S
ales
(B
il.)
Long-Term Total Retail Sales Monthly Retail Sales Excl. Auto and GasR
ec
es
sio
n
+14%
* Through JanuarySources: Marcus & Millichap Research Services, U.S. Census Bureau
$869/person
$952/person
-15%
-10%
-5%
0%
5%
10%
15%
20%
74 78 82 86 90 94 98 02 06 10 14*
250
350
450
550
650
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*
Single-Family and Condo
$150
$175
$200
$225
$250 Single-Family Condo
* Through DecemberSources: Marcus & Millichap Research Services, National Association of Realtors
+10%+11%
Med
ian
Pri
ce (
000s
)
-1%
Ho
me
Sal
es (
000s
)
Median Home Prices Existing Home Sales
Y-O-Y Change
Y-O-Y Change
Single-Family Housing and Condo Market Improving Despite Recent Slowdown
Southern California Economic Overview
Migration Into Southern California
-160
-40
80
200
320
71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15*
Net
Mig
rati
on
(00
0s)
* ForecastSouthern California includes Los Angeles, Inland Empire, Orange County, and San Diego MSAsSources: Marcus & Millichap Research Services, U.S. Census Bureau
-8%
-4%
0%
4%
8%
Los Angeles Inland Empire Orange County San Diego United States
2000-2011 2012 2013 2014*
Y-O
-Y P
erce
nt
Ch
ang
e
Employment Growth Trends
08-09: -378,500 -143,800 -163,300 -91,400 -8,663,000
2010: +27,800 +5,900 +16,400 +11,000 +1,058,000
2011: +31,200 +6,900 +15,400 +13,200 +2,083,000
2012: +85,100 +34,400 +37,100 +29,500 +2,236,000
2013: +45,100 +13,500 +34,000 +22,900 +2,322,000
2014*: +81,000 +27,500 +39,100 +32,400 +2,700,000
* ForecastSources: Marcus & Millichap Research Services, U.S. Census Bureau
Single-Family Home Price Trends
$0
$200
$400
$600
$800
Los Angeles Inland Empire Orange County San Diego United States
2000-2011 2012 2013 2014*
Med
ian
Ho
me
Pri
ce (
000s
)
* ForecastSources: Marcus & Millichap Research Services, National Association of Realtors
2005-11: -48% -57% -31% -42% -28%
2011-13: 30% 39% 22% 24% 24%
Apartment Market Overview and Outlook
0
3
5
8
10
Los Angeles Inland Empire Orange County San Diego
2007-2011 2012 2013 2014*
Un
it C
om
ple
tio
ns
(000
s)
Apartment Construction Trends
* ForecastSources: Marcus & Millichap Research Services, MPF Research
0.6%
0.7%
2.1%
1.3%
0%
3%
6%
9%
12%
Los Angeles Inland Empire Orange County San Diego United States
2007-2011 2012 2013 2014*
Ave
rag
e V
acan
cy R
ate
Apartment Vacancy Rate Trends
* ForecastSources: Marcus & Millichap Research Services, MPF Research
Apartment Effective Rent Trends
-5%
0%
5%
10%
15%
Los Angeles Inland Empire Orange County San Diego United States
2007-2011 2012 2013 2014*
Y-O
-Y P
erce
nt
Ch
ang
e
* ForecastSources: Marcus & Millichap Research Services, MPF Research
4%
5%
6%
7%
8%
Los Angeles Inland Empire Orange County San Diego United States
2005-2011 2012 2013*
Ave
rag
e C
ap R
ate
Apartment Cap Rate Trends
* EstimateIncludes sales $1,000,000 and greaterSources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
Office Market Overview and Outlook
0.0
1.2
2.4
3.6
4.8
Los Angeles Inland Empire Orange County San Diego
2007-2011 2012 2013 2014*
Co
mp
leti
on
s (M
il. S
qft
.)
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
Office Construction Trends
0.2%
0.3%
1.0%
0.5%
0%
6%
12%
18%
24%
Los Angeles Inland Empire Orange County San Diego United States
2007-2011 2012 2013 2014*
Ave
rag
e V
acan
cy R
ate
Office Vacancy Rate Trends
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
Office Asking Rent Trends
-10%
-5%
0%
5%
10%
Los Angeles Inland Empire Orange County San Diego United States
2008-2011 2012 2013 2014*
Y-O
-Y P
erce
nt
Ch
ang
e
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
2%
4%
6%
8%
10%
Los Angeles Inland Empire Orange County San Diego United States
2005-2011 2012 2013*
Ave
rag
e C
ap R
ate
Office Cap Rate Trends
* EstimateIncludes sales $1,000,000 and greaterSources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
Retail Market Overview and Outlook
0.0
2.0
4.0
6.0
8.0
Los Angeles Inland Empire Orange County San Diego
2007-2011 2012 2013 2014*
Co
mp
leti
on
s (M
il. S
qft
.)
Retail Construction Trends
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
0.4%0.5%
0.3% 0.5%
0%
3%
6%
9%
12%
Los Angeles Inland Empire Orange County San Diego United States
2007-2011 2012 2013 2014*
Ave
rag
e V
acan
cy R
ate
Retail Vacancy Rate Trends
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
Retail Asking Rent Trends
-30%
-20%
-10%
0%
10%
Los Angeles Inland Empire Orange County San Diego United States
2008-2010 2012 2013 2014*
Y-O
-Y P
erce
nt
Ch
ang
e
* ForecastSources: Marcus & Millichap Research Services, CoStar Group, Inc.
2%
4%
6%
8%
10%
Los Angeles Inland Empire Orange County San Diego United States
2005-2011 2012 2013*
Ave
rag
e C
ap R
ate
Retail Cap Rate Trends
* EstimateIncludes sales $1,000,000 and greaterSources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
Industrial Market Overview and Outlook
0
8
16
24
32
Los Angeles Inland Empire Orange County San Diego
2007-2011 2012 2013 2014*
Co
mp
leti
on
s (M
il. S
qft
.)
Industrial Construction Trends
* EstimateSources: Marcus & Millichap Research Services, CoStar Group, Inc.
0.3%0.2%
3.5%
0.0%
0%
4%
8%
12%
16%
Los Angeles Inland Empire Orange County San Diego United States
2007-2011 2012 2013 2014*
Ave
rag
e V
acan
cy R
ate
Industrial Vacancy Rate Trends
* EstimateSources: Marcus & Millichap Research Services, CoStar Group, Inc.
Industrial Asking Rent Trends
-20%
-10%
0%
10%
20%
Los Angeles Inland Empire Orange County San Diego United States
2008-2011 2012 2013 2014*
Y-O
-Y P
erce
nt
Ch
ang
e
* EstimateSources: Marcus & Millichap Research Services, CoStar Group, Inc.
0%
3%
6%
9%
12%
Los Angeles Inland Empire Orange County San Diego United States
2005-2011 2012 2013*
Ave
rag
e C
ap R
ate
Industrial Cap Rate Trends
* EstimateIncludes sales $1,000,000 and greaterSources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
Southern California Commercial Real EstateOverview and Outlook
2014Al Pontius
Senior Vice President and National Director
February 2014