Magazine article Mortgage Banking

Hot Markets

Magazine article Mortgage Banking

Hot Markets

Article excerpt

NO ONE WOULD ARGUE THAT THE NATION'S ECONOMY IS ON FIRE RIGHT NOW. MOST WOULD concede economic growth has been respectable--but white-hot it's not. So it's a little surprising that some commercial and multifamily real estate markets in the United States are really ablaze. Take, for example, almost all of Southern California.

Our feature this month, called "L.A. Market Rocks," tries to explain what's behind the incredible demand for commercial real estate and apartments in the entertainment capital of the world. Take, for example, the industrial market in Los Angeles County. Hortense Leon writes in her piece. "As of first-quarter 2005, the vacancy rate in the Los Angeles industrial market was 2.9 percent--the strongest industrial market in the country...." She quotes Cushman & Wakefield numbers showing the next-lowest vacancy rate for industrial property is more than double that number at 6.3 percent, a rate shared by Seattle and Tampa, Florida.

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But the explanation for the strong showing by Southern California industrial properties is what's intriguing. The article quotes Jim Costello, senior economist at Torto Wheaton Research, Boston, saying, "Most of the demand for industrial space in the U.S. has occurred in just one market--Southern California." He adds. "This is a function of all the imports from China." When you think about it, it makes perfect sense. And global economic trends have a lot to do with how commercial and multifamily properties are doing in the United States today. …

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