Construction in L.A. Approaches Uncharted Territory With Nearly $20B in Starts on Deck for 2017
While development and construction is booming in Los Angeles, the latest Allen Matkins/ UCLA Anderson Forecast California Commercial Real Estate Survey, completed in December, indicates an equilibrium in the area’s office and multifamily markets. The survey measures the views of commercial real estate developers on rental and vacancy rates in specific markets three years into the future.
“Developer sentiment in the Los Angeles office market has slowly diminished over the last two years since peaking in December 2014,” Tipton says. “Industry leaders now believe the Los Angeles office market will be no better, but no worse, three years from today. Underscoring this tempered optimism, 66% of [those surveyed] have no plans to initiate a new office project in 2017.” That percentage has risen in each of the previous two surveys, he adds.
Views on future multifamily housing demand have also cooled, with those surveyed believing that the 2019 Los Angeles multifamily market will be about the same as the market today. “Consistent with that view, 54% of the Los Angeles [respondents] stated they would not begin a new multifamily project in 2017, up from 26% only one year ago,” Tipton says. For a copy of the full survey, visit allenmatkins.com/ucla.
Firm in Focus
10880 Wilshire Blvd., Ste. 1850, Los Angeles
Principal: Scott Hunter
Year Founded: 1939
2015 Calif. Revenue: $65.3 Million
Green Light: While excavation for the $2.6-billion Los Angeles Rams stadium—designed by HKS—has been going on for months, above-ground construction couldn’t proceed until the Federal Aviation Administration signed off on the project. The agency had previously raised concerns that the sleek structure could interfere with radar at the nearby Los Angeles International Airport. However, last month, the FAA and developer Hollywood Park Land Co. reached a settlement to allow construction to proceed, stipulating that the developer will pay for a $29-million secondary aircraft tracking system. Crews with joint venture contractor Turner/AECOM remain on schedule for opening the stadium at the beginning of the National Football League’s 2019 season. The design calls for 70,000 fixed seats capped by a nearly 19-acre ethylene tetrafluoroethylene canopy.