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News release

LOS ANGELES, CA

Improving Economy to Bring Life to Los Angeles Commercial Real Estate Market in 2012

Jones Lang LaSalle’s 2012 Los Angeles Forecast reveals that industrial and multi-family will lead recovery


LOS ANGELES, CALIF, Jan. 20, 2012 – Growth in the Los Angeles commercial real estate market in 2012 will be characterized by a variable recovery with industrial and multi-family leading the way, according to Jones Lang LaSalle who recently hosted its annual 2012 Los Angeles Forecast.  The office sector is likely to continue to recover with stronger gains expected on the Westside.

Attended by approximately 600 executives, the event featured insight on the current commercial real estate landscape and trends, as well as perspectives on the outlook for what lays ahead in 2012.  Speakers included Tim Leiweke, President and CEO of AEG; Richard Weiss, Senior Vice President and Senior Portfolio Manager of American Century Investment; Colin Dyer, Global CEO of Jones Lang LaSalle; and Peter Roberts, CEO, Americas of Jones Lang LaSalle.

“Employment growth continues to be the key in the recovery of the Los Angeles commercial real estate market,” said Peter Belisle, Jones Lang LaSalle’s Southwest Region Market Director.  “We expect a gradual recovery from Los Angeles’ diverse economy with entertainment, tourism, healthcare and professional services leading the way.”

Property type forecast summary
  • Office: The Los Angeles office market is expected to continue on the path of recovery in 2012 with declining vacancy, paving the way for rental rate growth in 2013 as the market tightens and concession packages diminish. The wave of “downsizing” and “right-sizing” by large corporations seen in Los Angeles over the past three years seems to be waning. Lease renewals will continue to characterize much of the leasing activity but with tenants maintaining their existing footprint rather than just renewing and downsizing. Continued improvements on the Westside are expected with single digit vacancies in prime markets boosted by robust demand for space from tech and entertainment tenants.
  • Industrial: Cost and consolidation motivations will continue to fuel activity in the Inland Empire industrial market in 2012 with supply of ‘big box’ space being the only potential constraint.  The Los Angeles industrial market should continue a slow march towards recovery as global and regional economic conditions improve in 2012.
  • Retail: The retail sector should stabilize and rents will be poised to experience some positive net absorption and marginal rent increase.  Challenges in the global market could undo regional gains in the retail market.
  • Multi-family: While challenges in the housing market remain a significant hurdle in the overall US economic recovery, the market’s downturn has helped the Los Angele apartment rental market. The multi-family market will continue to perform favorably between 2012 through 2014. Gains will be supported by job growth, healthy investment sales, and further decline in vacancy rate.
  • Hotels: RevPAR growth in 2012 is predicted to be six to eight percent and even possibly double digit growth based on strong convention calendar, significant infrastructure in and around Los Angeles, which will induce more demand creating momentum in 2012.

For additional expert insights, news, videos and research resources on what Los Angeles can expect in 2012, please visit http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/Los-Angeles-Property-Forecast-2012.aspx

You can also visit the Jones Lang LaSalle U.S. media center Web page for news videos and research resources from the company. Bookmark it here:  http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/News.aspx.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.9 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.