A shift of institutional investor interest from offices to industrial and retail buildings has been forecast by Michael Meyer, managing partner of Kenneth Leventhal & Co.'s Orange County office.
In a speech at the Economic Development Council Forum at the Los Angeles Area Chamber of Commerce, Meyer said he finds the Los Angeles Basin's real estate industry--construction, leasing and sales--in a "robust condition" but added, "Only developers and investors with patient money should be playing the game."
He forecast an increase in office-space absorption this year and predicted that in the "strong West Side office market," the Sepulveda Corridor will soon vie with Brentwood's 15% office vacancy rate, due largely to Donald Bren's master-planned development at Santa Monica and Sepulveda boulevards. He also predicted that the Marina del Rey area will be "another main-growth area."
However, he pointed out that with almost 710 million square feet of manufacturing/distribution space (having a 10% vacancy rate) and another 33 million square feet to be added by construction this year and next, the Los Angeles Basin's industrial market is the largest in the country. He also called L. A.'s retail market, which has a 5% vacancy rate, "one of the most vibrant, exciting and diverse in the U. S."