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Top 10 Commercial Real Estate Predictions for 2018

By Forrest Blake, Senior Vice President SVN Commercial – 310-850-2381 CalBRE Lic # 01054174

Welcome to 2018. To say there will be substantial change this year is an understatement. In this newsletter edition, I’d like to share with you my predictions on how these changes will affect you and your work environment. Please enjoy.

1. Rents Will Rise

Gone are the days of 50-100 different landlords in a given submarket. With fewer landlords competing for your lease means, rents will continue to increase in the new year. Read More

2. Traditional Offices are Disappearing

Technological advancements and demographic changes are dramatically affecting office designs, resulting in open plans with teaming space as the new normal. Professional service firms won’t be spared from this trend and will have to fight to keep their offices from shrinking or even disappearing. See Graph

3. Artificial Intelligence Enters the Workplace

From facial recognition to voice-enabled assistants, A.I. has come a long way in recent years. Get ready for it to become embedded in your workplace. Read More

4. Millennials are Perfect

American Psychological Association has published new research exploring the rise of perfectionism in young people. This research shows a 10 percent increase in self-directed perfectionism, a 33 percent increase in socially prescribed perfectionism (that is, high standards dictated by the expectations of others) and a 16 percent increase in other-oriented perfectionism (perfectionist standards that are applied to other people). Read More

5. Interest is Going Up

In a recent CNBC interview, DoubleLine Capital CEO Jeffrey Gundlach said he expected interest rates to continue rising in 2018, stabilizing both residential and commercial real estate prices. Read More

6. Balance Sheet Changes on the Way

In 2018 and 2019, corporate and privately-owned companies will have to book their entire lease consideration as an asset and liability on their balance sheet. This may affect a company’s ability to obtain financing. Read More

7. Keeping Staff Will Require Effort

With unemployment rates going down, employee attraction and retention will be the focus of many companies. The Bureau of Labor Statistics reports over 3 million people in the US quit their jobs each month since June 2017. This means an aggressive approach to retaining your people that will include having great space, flexible work hours, environment and structure. Read More

8. Telecommuting Continues to be an Opportunity and an Issue

According to the Zinc survey, IDC expects mobile workers will account for nearly three-quarters of the U.S. workforce by 2020. To remain competitive in hiring and retaining employees, companies are being pushed to allow workers to telecommute. Some companies are still on the fence about allowing employees to work outside the office. Read More

9. Construction Boom Continues

LA has the second-highest number of cranes at work in the US, and that trend is most likely to continue in 2018. Over the past year, we’ve seen new hotel rooms, creative office spaces, residences and retail supply come online – and the activity isn’t slowing down. Read More

10. More Focus on Work-Life Balance

With rising costs of running a business in the city, more companies are relocating to the suburbs. But to entice Millennial employees, who prefer the amenities and convenience of city living, developers are building mixed-use centers in suburbia, with workplaces close to entertainment, restaurants and multi-family housing. Read More

I hope you’ve found this information helpful. If you have questions or would like to know how I could assist your business with its commercial lease needs, please feel free to contact me at:

Forrest Blake | Senior Vice President

SVN | Commercial – DTLA

800 South Figueroa Street, Suite 925, Los Angeles, CA 90017

Phone 213.618.4196 | Mobile 310.850.2381

forrest.blake@svn.com | www.svn.com

CalDRE# 01054174

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