California Commercial Real Estate Trends

California is one of the most desirable commercial real estate markets in the world. The reason is simple; with nearly 40 million residents, the Golden State makes up 12% of the country’s population. If it were a country, California would be the eighth largest economy in the world.  
Additionally, California has diverse geographical elements like mountains ranges, the Pacific coastline, deserts, national parks, and large, prosperous urban areas. All of these, in their own way, add to California’s allure. This allure greatly contributes to the recent positive commercial real estate trends we’re experiencing in Southern California. 
Commercial Real Estate Values Continue to Rise  
There are many pockets of California’s commercial real estate and they are white hot, particularly in the Los Angeles and Orange County areas. The market trends have resulted in a ripple effect and a skyrocketing increase in commercial construction. 
Industry statistics show commercial real estate properties reaching an unprecedented increase of 24% last year. This growth represents record-breaking conditions in Southern California. 
Because commercial property values continue to rise, California remains one of the idyllic areas to invest in America. Whereas most investors would typically wait for the market to take a downturn, investors continue to gobble up these assets here in Southern California. 
Among the key reasons that investors are willing to often overpay are Southern California’s continuing economic stability, strong workforce, and growth. 
With volatility in the stock market, commercial real estate assets and real estate, in particular, see their values increase in inflationary environments, according to CADRE Insights. 
Commercial real estate is a hard asset which can produce cash flow. Overall, commercial real estate may be both an attractive long-term investment and an effective hedge against rising inflation. 

Construction and Property Technology Continues to Trend  

Over the past year, the commercial real estate and construction industry is seeing rapid technological advancements on jobsites, and the way business is done. With the accelerated adoption of new technology, especially with leading-edge tech well known in the Southern California area.  
Innovative tools, software, semi-automated and automated machinery, data gathering, and analysis, digital visualization, 3-D printing, and AI (Artificial Intelligence) are increasingly solving many of the commercial real estate and construction industry’s biggest problems. From safety and productivity to project management and labor shortages, these newer technologies are playing a larger role. The utilization of drones in the CI has a 239% development year-over–year in California and across the globe, greater than any other commercial zone. 
Commercial real estate property technology is changing the landscape of commercial property practices. With the use of AI and cloud-based commercial property management software, processes are being automated and streamlined, which saves time and cuts costs for many property practices and project management. 
Commercial Real Estate Property Upgrades and Repurposing  
Southern California commercial property is seeing an increase in the need for remodeling and repurposing spaces to cater to the new work reality norm, known as a hybrid workspace. It offers a more open concept for collaboration and team building. Additionally, employers are offering more flexibility for workers to have the capacity to work at home as well as in the newly redesigned workspace. Many of the tech companies have been offering these more open work environments for years to boost creativity, camaraderie, productivity, and teamwork. 
By: David Jalaty, President of AO Contractors  
Company Biography: With years of experience in commercial construction, Alpha Omega Contractors is your go-to construction company in Southern California. Our team helps bring your renovation wish list to life while helping you safeguard and future-proof the profitability of your business. Our team of general contractors, designers, and design-build experts will collaborate with you from the initial stages of pre-construction through to putting the finishing touches on your dream remodel project on time and within budget. 

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