Real Estate Market Is Softening, But Analyst Think Worst Is Yet To Come
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Maura Webber Sadovi wrote this artice as a special to the wsj.com.
The City of Angels’ property market is looking more earthbound, as the global financial crisis is beginning to play itself out in the region’s real estate.
Of course, real estate in and around the nation’s entertainment capital already has taken some hits this year as the region’s Countrywide Financial Corp. and IndyMac Bancorp Inc. were among the highest-profile casualties of the crisis. In addition, slumping imports into Los Angeles-area ports have hurt warehouse demand and housing prices have fallen.
Now brokers say the property market in and around the city is bracing for even tougher times as budget-conscious companies are looking to trim real-estate costs. Already-declining demand for office space in the Los Angeles region, one of the country’s largest office markets, is expected to accelerate, says Whitley Collins, senior managing director of the Los Angeles region brokerage for Jones Lang LaSalle Americas Inc.
He sees a worst-case scenario in which metropolitan area companies over the next 12 months could put as much as 10 million square feet of office space back on the market and rents could decline by as much as 25%. “We’re seeing a softening, but we’re not nearly seeing the softening we’ll see,” Mr. Collins says.
The further decline in demand would come as some companies already are shedding space or considering doing so. It still isn’t clear what will happen to the leased space occupied by the Pasadena headquarters of IndyMac Federal Bank FSB, as well as the bank’s 33 Southern California retail branches, Federal Deposit Insurance Corp. spokesman David Barr says. The FDIC in July took over the IndyMac Bancorp’s banking unit, which it subsequently renamed IndyMac Federal Bank, and is seeking a buyer for it, Mr. Barr says.
To read the full article click here.
As we all know, trends tend to go from west to east, especially real estate trends.
Leave a Reply