L.A. Seen as Top Factory Space Builder : Economist Predicts 36% Slippage from Production in 1987

Los Angeles will continue to lead the nation with 12 million square feet of new industrial space this year, a 36% decline from the nearly 19 million square feet in 1987, and the first major decline since 1981, according to economist Michael Sumichrast.

Writing in his monthly newsletter, Commercial Real Estate Report, the former chief economist for the National Assn. of Home Builders said that San Francisco will be in second place, with 5.6 million square feet, down 51% from 1987. Nationally, new industrial space built will increase 4%, from 150 million square feet in 1987 to 156 million square feet this year.

Sharpest Numerical Drop

Detroit and New York City will tie for third place, with 5 million square feet each, followed by Miami, with 4.5 million; Atlanta, with 3.6 million; Chicago, with 3 million; Boston, with 2.8 million; San Diego, with 2.2 million, and Phoenix, with 2 million.

The sharpest numerical drop in new office construction is forecast for Los Angeles, from 18 million square feet in 1987 to 12 million square feet this year, Sumichrast said. The biggest overall decline will be in Houston, where less than 1 million square feet of new office space will be built this year, down from an average of 9.5 million square feet a year between 1981 and 1986.

Nationally, new office space will continue to drop for the third straight year, falling 20%, to 130 million square feet this year from 162.2 million square feet in 1987. Office construction peaked at 245 million square feet in 1985, Sumichrast said.