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Rosy '85 Forecast for Commercial Projects : Real Estate Authorities Predict Healthy Market, Including Downtown Los Angeles

March 03, 1985|RUTH RYON | Times Staff Writer

If crystal-ball gazing is a sign of good health, the commercial and industrial real estate industries must be as strong as Mr. T.

At the start of every year, authorities in these fields offer their forecasts, and the predictions for 1985 generally are rosy.

Robert C. Lesser, chairman of a Beverly Hills real estate consulting firm, summed up the predictions in one sentence: "During 1985-'86, we will be in a healthy market."

This will be the case in Los Angeles, he said, despite the "trendiness, traffic and overbuilding." By trendiness, he was referring to what architect Herbert Nadel (who co-sponsored one of these seminars with Lesser) describes as "trendy elements in architecture--design elements with a short life.")

"It's a renter's market because of the glut of space (in many office areas including downtown Los Angeles)," Lesser said, "but the next trend will be the rebirth of the downtown, whether that downtown is in Los Angeles, Pasadena, Santa Ana or Long Beach."

Christopher B. Leinberger, president of Lesser's company, voiced a warning when he said that he has been urging the firm's developer clients to get their downtown Los Angeles projects approved "because sooner or later, there will be a moratorium" there. However, speaking before 1,100 business and civic leaders at his company's annual forecast in Los Angeles, Raymond M. Lepone of Grubb & Ellis said that that the 1985 office market will see an increase in both the demand for, and supply of, first-class office space in downtown L. A.

Harold A. Ellis, chairman and chief executive officer of Grubb & Ellis, told the gathering: "As we see it, the forecast is similar to what happened in 1984, but on balance, we're more optimistic. We see particularly strong activity in the retail/industrial segments, but we're concerned about the new tax act's impact on investment sales. Uncertainties about this will impact negatively, but--generally--we look forward to a very good year."

The same is apparently true in San Diego, where Arleigh Williams, vice president and resident manager of Coldwell Banker Commercial Real Estate Services, said: "A substantial amount of available land (in San Diego) was sold in 1984, indicating that developers are bullish about San Diego, its economy and the continued upswing in the nation's economy as a whole."

A comprehensive forecast of the national market, unveiled by Coldwell Banker at a press conference in New York, covered all real estate types but, according to a press release issued by the company, "the underlying theme was recognition of the slowing growth rate of the national economy and cautious optimism for a good year in the United States during 1985."

Among the specific predictions was this:

"Rent increases are expected in the healthiest office-space markets, which include Boston, New York, Philadelphia and Washington, Los Angeles and San Francisco."

The Klabin Co. of Inglewood is already forecasting an increase of up to 20% in the sale and lease rates of industrial buildings in the South Bay area of Los Angeles.

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