Can you guess the number of Grade A buildings available in the OC? – Orange County Register

I already know. You are tired of another prediction column.

By the time you read this, we’ve entered January, I’ve celebrated another solar orbit and the Super Bowl has moved to Texas – now a prediction! But I digress.

I’m a bit tired of the prognosis because my crystal ball was pretty clear last year. But I’ll jump out there and get some.

Industrial rents will increase. Next bullet. Alas, I have a few more words, so stick with me.

We track Class A inventory for an upcoming assignment. What is it, you may ask? We describe Class A inventory as buildings built since 2000. In this way we are able to eliminate functionally obsolete structures that may exist on the market.

In Orange County, there are eight new projects proposed or under construction that total more than 2.7 million square feet. That’s a staggering number until you take into account the existing buildings today. Ummm, that would be one. That’s right! A building is available. Demand is still strong, so rents are nowhere near going up.

Developer appetite will persist. With industrial rents rising and interest rates still low, expectations are little changed this year. There was still ample capital to find a place to live and a severe shortage of land to produce concrete caves. So the conundrum continues. Any industrial developments coming to your neighborhood Sears store? A campus built for industries has left the area? All will be the goal this year.

The office – no, not the series – the market will grow. Ladders, a career site for high-paying jobs, predicts 25% of all professional jobs with a salary of $80,000 or more will be far off by the end of 2022. My doubts it will be bigger than that.

Anecdotally, let’s take our office as an example. We own a two-story, 21,700 square foot location. We occupy the upper floor and part of the lower floor with an area of ​​​​about 13,000 square feet. When locked and loaded, 49-52 people go to work every day. But now? Probably half regularly attend. My team works remotely like everyone else. Adjusting for this change will be a smaller footprint and more usable space.

Retail more deceleration? Well, duh, we all know that, big guy, so how do you ask that? In fact, what slowed down the two-year pandemic-induced sabbatical were trips to the store. Retail sales have really increased as we buy a lot of things from our home keyboards.

However, one of our clients, based in NYC, is very good at evaluating brick-and-mortar retail businesses like Walmart, Costco, Burlington, etc. He felt the REAL drop. and predict many more things to happen. So we’ll see.

Inflation stagnated. What the hell is that? “In economics, stagnation or recession-inflation is a situation in which inflation is high, economic growth slows, and unemployment remains high. It presents a dilemma for economic policy, as actions to reduce inflation can exacerbate unemployment,” says Wikipedia.

Huh! Rate of inflation, high – check. Economic growth slows down – check. High unemployment rate – check. By the way, you might be thinking, I thought unemployment was low. In fact, the percentage of the workforce that is NOT working is high. The statistics reported are only for people who have filed a complaint, which can be quite misleading.

So they are my 2022 predictions. Watch this time next year to see how I did.

Allen C. Buchanan, SIOR, is the principal of Lee & Associates Commercial Real Estate Services in Orange. He can be contacted at abuchanan@lee-associates.com or 714,564.7104.

https://www.ocregister.com/2022/01/16/buchanan-can-you-guess-the-number-of-available-class-a-buildings-in-oc/ Can you guess the number of Grade A buildings available in the OC? – Orange County Register

Huynh Nguyen

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