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News release

SAN DIEGO, CA

Year-End Insight Videos Give Optimistic Outlook for Commercial Real Estate in 2014

Video series is a valuable resource for developers, owners, tenants and more


SAN DIEGO, Dec. 23, 2013 — As 2013 winds down, many industry insiders – including the brokers at Jones Lang LaSalle in San Diego – see things looking up for the commercial real estate market in 2014.

The brokers’ insights are included in a video series produced by Jones Lang LaSalle that recaps market performance of the past year in various sectors and provides guidance as to where the industry is heading.

Geared toward the specific needs of developers, landlords, tenants and others in the commercial real estate industry, each video offers significant, focused information to better understand local real estate conditions and opportunities.  The videos are presented in three main categories that reflect important industry sectors in San Diego – capital markets, healthcare and development.

The videos run less than five minutes long and feature brokers who are experts in their fields.

Optimism for the San Diego commercial real estate market in the coming year is a theme discussed in each of the videos.

Broker Lynn LaChapelle is “optimistic relative to where we are today and trending into 2014 because many of San Diego’s commercial submarkets have experienced sustained demand over the past two years” and this sustained recovery has investors interested in San Diego. LaChappelle is a Managing Director of Jones Lang LaSalle, with an emphasis in capital markets investment sales.

According to Darcy Miramontes, Executive Vice President of Jones Lang LaSalle, with a specialty in multifamily capital markets, “investors are very bullish” on San Diego’s multifamily opportunities as that sector has one of the strongest fundamentals of any commercial sector in San Diego.

She also points to employment as a reason for renewed local interest. “Job growth is going to be over 30,000 for the next several years, spread across multiple industries, including tech and biotech… after several months of lacklustre job growth, this is fostering even more buyers to look at the San Diego market.”

Miramontes also sees San Diego’s high housing costs as an investment advantage. “It’s very expensive to own a home in San Diego - 30 percent above the national average. This keeps a lot of the population in San Diego as renters and that helps with occupancy and vacancy moving forward.”

Paul Braun, Managing Director with Jones Lang LaSalle’s Healthcare Solutions team in San Diego has a positive outlook for healthcare related real estate, “We are seeing a transition in that health systems are strategically planning for a much longer period – 20 to even 50 years – and a lot of this is due to the anticipated demand of the Affordable Care Act, aging baby boomers and advances in technology.”

Chris Ross, Vice President, also with Jones Lang LaSalle’s Healthcare Solutions team, sees the focus on the future in the healthcare industry as “a critical time for health care providers of any size to take a close look at their occupancy costs. Acquiring space, leasing, renewing, developing or building all have different impacts.”

Development in San Diego will be ramping up in 2014 according to Bess Wakeman, Executive Vice President of Agency Leasing with Jones Lang LaSalle in San Diego. “Certain owners are very optimistic that the organic growth that San Diego is currently experiencing is going to continue,” states Wakeman in the capital markets video.  She cites The Irvine Company’s development of 400,000 sq ft of speculative office product in UTC as an example of this optimism and she “expects other owners such as Kilroy, Hines and Beacon to follow suit in the near future.”

Wakeman also sees more developers eyeing the downtown market as companies look for ways to attract the robust workforce of 25,000 downtown residents. “While the vacancy rates and the rental rates may not justify construction in our central business district, the amount of employees that are accessible to downtown does warrant new construction in the area.”

According to Romik Kesian, Senior Vice President of Project & Development Services, building owners and investors can be optimistic as we enter the new year, noting that the markets “where biotech and technology companies located will see continued growth in their rental rates. Continued growth in rental rates means more value to a building.”

For those looking to invest in San Diego in 2014, LaChapelle’s advice depends upon each client’s investment parameters: “Value-add clients should consider well-located properties that have the potential to become appealing to today’s tenants. Those looking for a core investment should focus on UTC, Del Mar, Sorrento Mesa and Mission Valley as these markets have strong tenant bases and historically have weathered the ups and downs of the market cycles. Many investors are looking primarily for technology oriented creative space.  I think there is a great opportunity to reposition older assets to take advantage of this tenancy.”

The videos are available on line at http://www.joneslanglasalle.com/San-Diego/en-us/Pages/insights.aspx.  

JLL is a leader in the San Diego commercial real estate market. The firm employs approximately 165 of the area’s most recognized industry experts offering services in brokerage, capital markets, facility management and project development services. In 2012, the San Diego team completed 4.58 million square feet in lease transactions, directed $57 million in project management, and currently leases 10.5 million square feet.

For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s global media center Web page http://bit.ly/18P2tkv.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.