Cal State Fullerton’s Center for Real Estate annual real estate forum returned on Jan. 24, with a sold-out event with more than 80 people from the industry and 11 real estate-focused students at Andrei’s Restaurant in Irvine.
The first real estate forecast post-pandemic took on an expanded focus to include residential, industrial and multifamily real estate, as well as discussion of Southern California’s affordable housing crisis, in addition to the emphasis on commercial real estate that defined fora in years past.
In addition to a comprehensive keynote forecast by Jesse Gundersheim from CoStar Group, a panel discussion featuring four Orange County real estate professionals provided an opportunity for the audience to ask questions and for all perspectives in this multi-faceted sector to be explored and discussed.
Mark Bridge ’01 of Cushman & Wakefield, Gary Martinez of Ashwill Associates, and Chris Collela of Commercial Bank of California comprised the panel. Angela Gomez-Jones, president of the Building Owners and Managers Association (BOMA) of Orange County, moderated the discussion.
“Real estate is one of the most prominent industries in Orange County, so it is only fitting that the Center for Real Estate from the College of Business and Economics would bring together experts to discuss the latest trends, to the benefit of industry and academia,” says Dean Sri Sundaram. “In addition, the College of Business and Economics will be launching the real estate concentration beginning fall 2024 which will greatly benefit our students who seek careers in the real estate sector.”
In future years, there are plans for an annual real estate report to be released, which would give the media, professionals and faculty access to the latest outlook similar to the college’s twice annual economic forecasts.
“It’s a new day for real estate education at Cal State Fullerton and we are so honored to offer these opportunities to help the next generation prepare for lucrative careers and for established professionals to network, connect with new talent and understand what’s shaping this ever-changing market,” says Pam Scamardo, the director of the Center for Real Estate, which presented the forum.
The Outlook for Orange County Real Estate: Down Days for Office, But News Elsewhere
“Office is the only real estate sector facing both cyclical changes – such as higher interest rates – and structural changes, wrought by the work from home revolution,” said Jesse Gundersheim, senior director of market analytics for Orange County and the Inland Empire for CoStar Group and the keynote presenter. “The return to the office has already happened, and probably won’t accelerate much more.”
Prices for offices have fallen significantly farther than other real estate sectors.
Most office space in Orange County is between 25 and 50 years old, which is in less demand than newer office space from the 2010s, and 40% of leases signed before COVID are still set to expire, meaning there is more disruption ahead for this beleaguered sector.
Gomez-Jones noted that efforts to return to the office are most advanced in Asia and Europe, but are falling behind in the United States, where white collar professionals seek the work-life balance that hybrid and remote schedules bring.
At least until there is a significant rise in unemployment – when workers might need to settle for less desired arrangements – hybrid work and less need for office space seems here to stay.
“But there is some hope for office,” said Martinez. “The majority of businesses in Orange County are service-based and we have an aging population. So there will be increased medical needs as well as needs to convert some office space to senior living residential.”
Office vacancy is also much lower in North Orange County – only 6% to 8% in Anaheim and the city of Orange – compared to around 12% countywide.
The panelists noted that industrial real estate saw a big boom in the early days of COVID, with supply chain disruptions and the rise in online shopping. It’s still an in-demand sector, but it is changing as just-in-time supply chain models (in which companies only have the product they expect to sell and less backstock) is becoming more common again.
“At first, the pandemic explosion in e-commerce was good for industrial real estate,” said Gundersheim. “But since early 2023, businesses have been paring back on inventories.”
It was agreed that industrial real estate is an ideal niche for investors if they focus on the under 100,000 square foot subsector rather than the massive distribution centers that have cropped up on the outskirts of major American cities in recent years.
“We’ve been behind on industrial real estate for many years,” said Martinez. “COVID generated demand for industrial on-site. As long as we have online sales, industrial sales will be strong.”
In a major upset from previous decades, Orange County ranked last in retail growth among the top 50 U.S. metros, with plans in the works for some shopping malls – such as in Westminster and the city of Orange – to be transformed to multifamily or mixed-use developments.
Indeed, the brightest spot for real estate in California may be multifamily housing, as the affordable housing crisis prompts the state to encourage infill developments and more units in the hopes of creating more affordability or at least availability.
“Apartments have become the sweethearts of lenders,” said Mark Bridge.
Honoring Real Estate-Focused Students
The Real Estate Forum concluded with recognitions and scholarships for two Cal State Fullerton real estate students: Mario Hong ’24, vice president of Atlas REO Property Specialists, and Billy Hanck ’24, vice president of the on-campus Real Estate Association and an apprentice at BOMA.
“In addition to financial support, these recognitions will help power the careers of these young real estate professionals, and testify to the strength of our program,” says Scamardo. “They are both high achieving young men and we are honored to have them represent Cal State Fullerton!”
For More on Real Estate
The Center for Real Estate at Cal State Fullerton is part of the broader real estate institute that offers education and insights in the field across the 23-campus Cal State system. The CSUF branch has served Orange County since 1996.
In addition to providing scholarships, advising, networking and development for students, the center’s advisory board brings together some of the region’s top real estate professionals, while seven dedicated faculty members focus their research interests on such real estate topics as housing affordability, the future of commercial real estate and the future of real estate in the AI age.
Read more of our articles about real estate education.
