Connect Q&A: Allen Matkins’ John Tipton on Winter 2020 Forecast

Connect CRE News (February 10, 2020) The annual Allen Matkins/UCLA Anderson Winter Forecast is as much a year-forward motivational “must read” as it is a best practice analysis of California and a potential market environment three years out. The findings of the forecast rest on a foundation of world-class research, active professional input and an honest assessment from authors, who balance history to date and logical conclusions with unforeseen events buoyed to some required optimism. So, when Connect Media had the opportunity to delve into a few identified trends with Allen Matkins Real Estate Chair John Tipton, following the release of the California Winter 2020 Forecast, the following questions offered a quick drill-down into some specific areas:

Q: Optimism is second nature for developers. Do market fundamentals support the conclusion that 2022 is the year where a plateaued market rises again?

A: The Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Surveys seeks developer sentiment regarding marketplace conditions three years out from the date of the survey. Most economic forecasts predict a potential softening in the economy in late 2020 and 2021. Because our survey predicts development conditions three years out, our panelists are expressing optimism based on a re-energizing of certain markets following this potential downturn.

Q: Retail is predicted to be less likely than other asset classes to see marked growth, however, does that include the era of mixed use formats (both new development and existing project conversions) incorporating retail spaces in far larger projects?

A: Although our developer panels have consistently been less bullish on the retail asset class, panelists are seeing opportunities in the mixed-use and experiential retail development.

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