California landowners and investors may be interested in learning more about the implications of recent commercial real estate surveys. Researchers project that rental rates for apartments will increase by more than 3 percent annually up through 2017. Rental rates in the office sector are projected to increase by 2.5 percent, and warehouse rentals are expected to increase by over 3.5 percent each year.
Economists believe that the commercial real estate industry will realize sustainable growth over the next three years. On April 8, the Urban Land Institute Center for Capital Markets and Real Estate published data reporting that the annual volume of commercial real estate transactions increased by 11 percent during 2014. The majority of the commercial property sectors’ rental rates, vacancy rates, market fundamentals and total returns are expected to adhere close to or exceed the averages recorded over the past two decades.
During 2016 and 2017, the commercial real estate volume is expected to increase by 6 percent from the levels projected for 2015. All of the commercial real estate sectors are expected to realize rent growth that is above average due to improving occupancy and vacancy rates. The survey indicated that real estate lending may remain competitive through 2017, which might benefit anyone with a property loan due in the meantime. Every type of commercial property now benefits from a robust labor market, according to one source.
Investors and landowners who might consider taking advantage of these optimistic projections might work with a real estate law attorney. Legal counsel may be prepared to review the laws applicable to the client’s situation and protect an investor’s long-term interests while reviewing proposals and contracts.