Is the Commercial Property Market Coming Back?

Well, things do look pretty positive in the sunnier portion of the nation's most populous state of California. According to a January 19, 2012 story in the Los Angeles Times, the most recent version of the twice yearly Allen Matkins UCLA Anderson Forecast found that area banking bigwigs and property developers are feeling bullish about the future of commercial real estate in the enormous Southern California area, which includes Santa Barbara, Orange, San Diego, Ventura, Riverside, and San Bernadino counties as well as greater Los Angeles. Can the guys in the welding helmets and hardhats be far behind as new properties start to go up?

Of course, a great deal of caution has to be built into this kind of forecast, which may be based on emotions as much as hard facts about the bottom line, vacancy rates, and other factors. Southern California was hit particularly hard by the 2008 collapse of the United States housing market. Despite recent good economic news, both nationally and in the state, unemployment still hovers at around 11 percent and many of the area's exurban regions, especially Riverside county, are pockmarked with neighborhoods that still bear no small resemblance to ghost towns. Locals may be only to quick grasp on to any shred of good news for dear life.

That being said, Southern California benefits from having a number of prominent local industries that have help up in reasonable fashion since the upheavals of 2008. Entertainment and media have, to be sure, taken a few hits in the Internet age, with music being particularly hard hit. At the same time, movies, television, gaming, and an assortment of ancillary fields continue to move forward despite no small amount of stress as digitalization and the rise of home entertainment continues apace.

There's also no small amount of spill over from Northern California's Silicon Valley, as tech remains powerful in So Cal. Also, more traditional industries -- the kind that require those hard hats and welding helmets we mentioned  -- continue to thrive in places like the enormous and bustling port of Los Angeles/Long Beach.

All of that really does seem to translate into fewer vacancies in California's commercial real estate market. That's likely good news for the entire nation.