Orange County, Calif., real estate prices may have topped out, experts say
Commercial real estate pricing in Orange County
could be at its peak, a panel of real estate experts
said Wednesday.
Three heads of local companies and one local division
manager agreed that investors have pushed up prices
and pushed down returns on real estate. The low level
of returns likely is not sustainable, they said.
"We're all chasing yields down in all property
types," said Paul Marshall, division president
in the Irvine office of Opus West Corp. He said some
real estate players are "getting nervous"
about the future of those yields.
Those yields should rise on some properties, meaning
prices will fall, panelists said.
Bill Halford, head of Newport Beach-based Bixby Land
Co., said everyone is bullish on the county in the
long run, but in the near term the county is "in
many ways overpriced." The panelists, speaking
at the RealShare conference at the Hyatt Regency in
Irvine, lead companies that develop offices, industrial
buildings, and apartments. They discussed the state
of commercial real estate in the county.
Joseph Vargas of Cushman & Wakefield, who moderated
the panel, asked if the low level of preleasing among
office buildings under construction was scary.
Developer Halford said the office market has a low
vacancy of 7 percent but leasing has slowed in recent
months.
He said with mortgage companies giving back space
and new construction coming online, the waters could
be a little choppy over in the next 18 months.
However, if demand picks up next year, "the
market will start to right itself," he said.
