California office spaces are expected to keep getting emptier and their rent prices will likely keep declining for years as the fallout of the pandemic persists, according to a new survey of commercial real estate developers and financiers.
Retail space will take an even more severe hit, while industrial real estate looks like a bright spot, and demand — and rents — for multi-family homes are expected to stay relatively high, said the Allen Matkins/UCLA Anderson Forecast survey, which focuses on expectations of what the next three years will hold for commercial real estate in Southern California and the Bay Area.
Survey respondents’ outlook was about as gloomy as in December 2008, “during the height of an implosion of economic activity,” according to the survey’s findings, released Wednesday.
With efforts to slow the spread of the coronavirus forcing offices to shut, companies have had to adapt to a decentralized model in which employees work from home. When they’re allowed to reopen, they still can’t resume business as usual: They must follow safety protocols that can be expensive — putting additional strain on budgets stretched thin by the pandemic-ravaged economy — and many workers don’t even want to return, for fear of catching the virus.
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