Snapshots

Is the recent emergence of an inverted yield curve a harbinger of a leasing slowdown in LA?

Since August, the yield curve inverted a couple of times spawning speculations of an impending recession, which would put an end to the longest economic expansion in U.S. history.

September 03, 2019
  • Since August, the yield curve inverted a couple of times spawning speculations of an impending recession, which would put an end to the longest economic expansion in U.S. history. 
  • According to economists, the emergence of an inverted yield curve in itself doesn’t automatically signal a recession, but can indicate waning confidence in the long-term economic outlook.
  • The dot.com collapse in 2000 began 13 months after the first inversion. The Great Recession materialized 24 months after the yield curve began to invert in 2005. The impact was felt in the office market soon after the recession began and from  2007 through 2010, Los Angeles office tenants put over 11.7 million square feet back on the market.
  • Year-to-date, companies have absorbed 1.8 million square feet in LA and the demand pipeline remains robust, pointing to continued growth in the foreseeable future. 

Source: JLL Research, CNBC and fred.stlouisfed.org

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