California real estate developers are feeling bullish and plan to build more office buildings, apartments and warehouses in the months ahead, a survey says.
New commercial space is expected to increase through 2017 across most California real estate markets, thanks in part to job growth and the rise in goods moving through the state's ports.
The outlook is based on the recent Allen Matkins/UCLA Anderson Forecast a measure of future commercial construction in California that analyzes the three-year outlook for real estate development activity based on surveys of real estate professionals.
"The forecast is optimistic for commercial real estate once again, and is expected to remain solid for the next few years," says Jerry Nickelsburg, adjunct professor of economics at UCLA's Anderson School of Management.
In comparison to the last survey, conducted in May, Southern California developers now are more bullish than in previous years. Forty-seven percent of professionals stated that they began projects in the last 12 months.
Looking forward, 51% said they would begin a development in the next 12 months as compared with only 35% in the 2014 survey.
Apartment development will continue to be one of the hottest construction categories in the San Francisco Bay Area and the Los Angeles region as young people with jobs leave home and others who were sharing quarters with roommates venture out on their own.
"Developers are saying that as they look forward to 2016 and 2017, they see no letup in this demand, so they're out looking at new projects to build even more multifamily housing in the county of Los Angeles," Nickelsburg said.