Real Estate professionals, investors, faculty, and students gathered for the annual Commercial Real Estate Forum presented by Cal State Fullerton’s Center for Real Estate in Costa Mesa on Jan. 30, 2026. A panel discussion featured CoStar Senior Director of Market Analytics Jesse Gundarsheim, CBRE Inc. Executive Vice President John Ellis, and CBRE Inc. Executive Managing Director Kurt Strasmann highlighted changes and developments in the industrial, retail, office, and multifamily real estate sectors. Moderating the discussion was Gary Martinez, president of the Inland Empire and Orange County chapter of the Society of Industrial and Office Realtors (SIOR).
The 2026 event also featured a research update by Associate Professor of Finance Jia Xie, who discussed the growth and impact of the real estate program at the College of Business and Economics.
A Stabilizing Commercial Real Estate Market Amid Flat Growth Trends
The panelists discussed how commercial real estate investment has risen to a three-year high, suggesting continued opportunities ahead despite the relatively flat market.
The increase in hybrid work environments, combined with the extensive demolition of office space in Southern California, has reduced office vacancy rates to 11.6% in Orange County. “Today, there is a flight to quality, so when workers are in the office, they want it to be nice,” explained Gundarsheim.
In contrast, industrial real estate vacancy has increased to 6.3%, approaching a 20-year high, whereas retail vacancy has remained largely unchanged over the past decade at just under 4%. Meanwhile, Orange County’s multifamily vacancy rate stands at just 4%, the second lowest in the nation.
“High income renters are doing well, but lower-quality property rent growth is down to 1.5%, the lowest rate in years,” said Gundarsheim. “Rent growth overall in 2025 was weak. We expect rent to flatline this year, but with improvements in office and retail.”
The K-Shaped Recovery and Interest Rates
The U.S. economy has become K-shaped. Some groups, such as people with higher incomes and investments, are doing well. Meanwhile, lower-and middle-income Americans in labor jobs are struggling as job growth slows and inflation stays high. In Orange County, unemployment is steady, but job growth remains stagnant.
“In Orange County, you’re spending four times as much to own a home as it does to rent an apartment,” says Ellis. “Affordability is a two-edged sword. If you’re in the market and thinking of buying your first home, you wish housing prices were lower. If you bought your home five years ago, you are disappointed that prices haven’t risen faster and your equity hasn’t grown. We want to see wages up and prices down, but it’s hard for those two things to happen simultaneously.”
Despite the concerns, Ellis maintains that growth and inflation are historically relatively well in balance and interest rates are in a slow decline. He anticipates two more quarter point rate cuts this year, for a relatively muted year.
Strasmann pointed to opportunities such as productivity gained through AI and tax cuts, the lower cost of finance, and strong real estate fundamentals and price stabilization. Risks included valuation of tech sectors and weakening labor markets.
“If you’re I-405 to the ocean, the multifamily sector is really good,” says Strasmann. “It’s a lot harder further east. But you’d be shocked at how many wealthy people pay cash for coastal properties.”
Real Estate: A Growing Titan Emphasis
Xie reported on the growth of the real estate concentration at Cal State Fullerton’s College of Business and Economics and the strength of the research acumen of the 10 tenure-track real estate-focused professors at the college. In the past three years, the number of students enrolled in real estate courses at the college has grown from 699 to 805 and the program is highly ranked and respected for its real estate research. The university is ranked first in California and 12th globally by the Real Estate Academic Leadership (REAL) rankings for faculty research, which provides a metric and methodology for faculty research acumen in the field.
Thanks to an articulation agreement with the California Department of Real Estate, graduates of the program are exam-ready, ensuring rapid career progression to real estate salesperson, broker or administrative roles. The program is also unique for ARGUS certification, preparing students for the high-tech focus of today’s real estate careers.
Achieving real estate-focused Business Titans also received scholarships at the event, followed by awards for real estate professionals bestowed by Sri Sundaram, dean of the college.
The 2026 Commercial Real Estate Forum was sponsored by Gorman & Associates and Southwestern National Bank.
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