CBRE: Outlook Up, but So Are Interest Rates

Pending interest rate hikes, automated vehicles and the unorthodox workplace socialization of millennials: These were among the hot-button issues discussed at the CBRE Ventura County and Conejo Valley Commercial Real Estate Symposium and 2018 Economic Forecast, held at Four Seasons Hotel Westlake Village on Feb. 23. After an introduction by CBRE Ventura County and L.A. North Managing Director David Josker, CBRE Senior Vice Presidents Mark Perry, Michael Slater, David Rush and Paul Farry delivered predictions regarding various local real-estate sectors. While Perry crowed that Los Angeles is the globe’s number one investment market, this news came with a caveat: prepare for the eventual downslide. New federal tax laws will benefit commercial real estate firms, but the impact of rising interest rates is undetermined. Over the long term, debt financing and insurance money will surge while foreign capital from China diminishes. Perry said the market has “still got steam.” His advice: “Be selective, do your research and purchase carefully.” Regarding the office submarket, Slater spoke of the 1.3 million square feet of office buildings (11 percent of the total L.A. market) sold last year. However, Slater characterized 2017’s leasing market as “the worst year since the ’90s,” as vacancy remained flat and rents and concessions exhibited volatility. “The office world is morphing,” Slater said, noting that tenants now demand amenities, high tech and upgrades. In 2008, Conejo Valley had only three executive suite locations; 10 now exist between Calabasas and Thousand Oaks. Retail-wise, Rush discussed 2017’s slow but steady growth into 2018. The wild card: How will online continue affecting stores? “It’s quite an anomaly when you have increased spaces and increased rates,” Rush said. In his presentation, California Economic Forecast Director Mark Schniepp predicted that in the next decade automated vehicles will phase out many professions, from truck and bus drivers to parking attendants and hospital staff. “Driving will be obsolete,” Schniepp said. “By 2050, traffic accidents will be eliminated. That’s the world we are heading for.” Schniepp also characterized younger employees as “inattentive, impatient and tough to manage.” Promotion to Ownership Andrew Berk has been named a principal at Avison Young in the real estate firm’s Burbank-adjacent Los Angeles North office. Berk previously served as a vice president in Los Angeles North and will continue to be based there. He has practiced real estate for 24 years and has brokered deals worth more than $525 million. Principal status is significant because Avison Young, headquartered in Toronto, is a collaborative firm owned and operated by its principals. “Andrew’s promotion is emblematic of his commitment and presence in the market and, specifically, our expanding industrial market share in the region,” Mark Evanoff, Los Angeles North office principal and managing director, said in a statement. The Los Angeles North office is located at 6711 Forest Lawn Drive. Conejo’s Big Night Real estate figured prominently at Greater Conejo Valley Chamber of Commerce’s 2018 Recognition Gala at Calamigos Ranch on March 2. At the banquet, Assistant General Manager Michael Reardon of Thousand Oaks-based Palm Garden Hotel was dubbed Ambassador of the Year while Thousand Oaks Boulevard Association received the Nonprofit of the Year nod for bringing beauty and commercial vitality to the streets of Thousand Oaks. Chamber President Jill Lederer commended Business of the Year recipient Ventura County Credit Union as “a model of professionalism and caring” and an esteemed corporate citizen and partner. Rick Lemmo, senior vice president of developer Caruso, one of the evening’s sponsors, introduced the Man of the Year. “He’s quite a mentor,” said Lemmo of Thousand Oaks’ Economic Development Manager Haider Alawami, who works for Camarillo-based Economic Development Center of Ventura County. “It’s not just about being the city planner of the city, he’s a real problem solver. He’s truly dedicated to solving the problems of our community.” In closing, Saudi Arabia native Alawami quoted the popular musical “Hamilton” — “Immigrants: we get the job done!” Staff Reporter Michael Aushenker can be reached at [email protected] or (818) 316-3123.