More Evidence of Office Markets Topping Out

The latest Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey provides continued evidence of a new topping out in the office market space. For each of the six California regions surveyed, the trend in positive developer sentiment—which peaked in the middle of 2014—has weakened, indicating we are experiencing the end of the office boom. Developers have become more pessimistic about real rental rate growth and vacancy rates. However, pessimistic sentiment does not mean office space demand is imploding. Rather, it says that one ought not expect it to be more robust in 2019 than it is today.