Los Angeles and other parts of California remain hot areas for the purchase and sale of business properties. However, not all types of commercial real estate are continuing to gain ground in the Golden State. Multifamily and industrial properties featuring commercial leases are especially in demand right now, whereas office and retail properties are losing steam.
According to a recent survey, the office markets in California have all but topped out. The development of office buildings already purchased is expected to continue. However, the level of new development witnessed in a variety of markets during the past few years likely will not occur during the next few years, in part due to increasing cap rates.
Retail is also struggling as whole in California. However, it is slated to keep improving in the Silicon Valley area. This area looks promising due to the rise in payroll employment as well as disposable income there.
Unlike the office and retail markets as a whole, the industrial market continues to heat up in the Southern California area, including in the Inland Empire and Los Angeles and Orange counties. Industrial property remains in demand due to a rise in online shopping and imports. In addition, even though the multifamily market is expected to soften, this softening should not last long. In fact, 75 percent of survey respondents mentioned that they were planning brand-new projects in the Southern California area.
Navigating commercial property transactions can no doubt be confusing and overwhelming. This is true whether a person is completing a transaction for the first time or the fifth time, as no two transactions are alike. Fortunately, an attorney can provide the essential legal guidance needed to successfully purchase/sell commercial properties or to develop land for properties featuring commercial leases in the Golden State.