Industrial Reaches Market Balance | Summer 2024

As industrial comes off a strong run of development in recent years, 59% of respondents to the Summer 2024 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey believe that supply and demand will balance out, with demand exceeding supply again by 2027. The return of traffic at California’s seaports and continuing high consumption levels are also contributing to more positive sentiment. Any pessimism centers around rental rates and vacancy rates being no better than today, which is not pessimism in the usual sense. Both the percentage of panelists that started new projects during the last 12 months and the percentage planning to begin new projects over the next 12 have declined, which seems to be a reflection of normalizing developer activity. Aly Shivji, Partner at Allen Matkins, and Evan Kantor, Head of Kennedy Wilson’s Commercial Investment Group, explore these and other factors seen to be influencing the industrial space markets.