There’s little that’s predictable with certainty about the commercial real estate (CRE) market these days. However, experts including real estate economists, brokers, developers, investors and owners throughout the western part of the U.S. have made some predictions based on the trends they’re seeking and what they expect 2023 to hold.
We’re all at the mercy of global events and issues like the war in Ukraine, inflation, interest rates, a potential recession, political divisions and continued restrictions on travel to and from parts of Asia. Of course, here in Southern California, we also have the issues of wildfires, homelessness and more.
People are returning to workplaces – but they expect more from them
One phenomenon that many of the experts mentioned is that people are slowly but surely returning to the workplace after a couple of years of working at home and in other remote locations. That’s true in some sectors more than others.
That means a market for new office space. However, luring workers back to the office is going to require a more comfortable work environment with more amenities, open spaces and lots of windows. That typically means newer buildings rather than renovated ones. Mixed-use buildings that combine offices, retail space and condos or apartments are becoming more popular.
One real estate executive says, “Low unemployment spells hope in the office market. If we get people back in the office this could turn around quickly.” An official with one global real estate investment bank adds, “From a sector standpoint, fundamentals are the best — industrial, multifamily and also across the alts — data centers, single-family build for rent and student housing.”
Wherever you’re investing your money or developing properties next year, it’s crucial to have experienced legal guidance every step of the way from professionals who know the unique challenges and opportunities of the Los Angeles CRE market.