ALLEN MATKINS | UCLA ANDERSON FORECAST
17.9
%
%
10%
15%
35%
30%
2024
I am excited to present the Summer 2026 edition of the Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey and Index. In our 39th edition, survey respondents remain optimistic across California, especially in the industrial and multifamily sectors. We’re also seeing growing enthusiasm in the office sector in San Francisco and Silicon Valley. We hope you find all the insights presented here useful as you plan your next project or look ahead.
Spencer B. Kallick
2020
2025
2017
2018
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– Tim Hutter, Partner
Allen Matkins
It is hard to envision a scenario in which COVID-19 and its fallout could remedy the underlying housing affordability issues that California faced coming into 2020. In light of that ongoing concern, we expect demand for multi-family housing to continue to be high.
San Francisco
Orange County
East Bay
San Diego
Silicon Valley
BACK TO TOP
05%
2019
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Winter 2022
Summer 2021
ALLEN MATKINS | UCLA ANDERSON FORECAST
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Los
Angeles
San Francisco
Orange County
East Bay
San Diego
Silicon Valley
Click on the markets to find out more
2026
2018
2017
2019
2020
2021
2013
2014
2015
2016
100
90
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50
40
30
20
10
0
Rental Rates
VACANCY RATES
California MULTIFAMILY Markets
Indexes of Survey RESPONSES
San Diego
Silicon Valley
East Bay
Orange County
San Francisco
Los Angeles
2022
Summer 2022
Winter 2020
Summer 2020
2022
2021
What Should California CRE
Markets Anticipate in 2023?
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What Should California CRE
Markets Anticipate in 2023?
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Winter 2023
2023
2023
ALLEN MATKINS | UCLA ANDERSON FORECAST
The Summer 2026 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey finds that California’s commercial real estate market is stabilizing as developers adapt to a prolonged higher-rate environment. While financing costs, construction expenses, and broader economic uncertainty continue to constrain new development, respondents remain optimistic about the long-term outlook for needs-based sectors, including multifamily, industrial, and neighborhood-serving retail.
Office Space
California’s office market is gaining traction as leasing fundamentals strengthen across several major markets, particularly San Francisco, Silicon Valley, Orange County, and San Diego. However, developers remain disciplined about introducing new supplies. Ninety-two percent of Northern California respondents and 81% of Southern California respondents reported no plans to begin a new office development over the next year.
(<50 market weakening, >50 market tightening)
The industrial market is benefiting from one of the most diversified demand profiles in California commercial real estate. While 32% of respondents identified e-commerce as the primary driver of industrial demand, down from 45% in the Winter 2026 Forecast, developers increasingly cited logistics, advanced manufacturing, robotics, and
AI-related digital infrastructure as contributing to future growth.
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ALLEN MATKINS | UCLA ANDERSON FORECAST
Industrial Space
Retail Space
Percent Without New Development Plans
summER SURVEY
paige gosney
partner
allen matkins
“After a period of slowdown in the industrial sector and challenges like moratoria and environmental justice opposition, the market has regained momentum, and we're ready to help drive the industry forward as growth accelerates.”
California’s housing shortage continues to present compelling development opportunities in the multifamily market. The Summer 2026 Forecast shows that 75% of Northern California respondents and 64% of Southern California respondents expect multifamily demand to outpace supply over the next three years.
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ALLEN MATKINS | UCLA ANDERSON FORECAST
Multifamily Space
Retail developers are increasingly concentrating investment on centers that serve everyday consumer needs rather than pursuing traditional large-format retail. Development activity is accelerating, with 75% of Northern California and 61% of Southern California respondents planning at least one new retail project in the next 12 months, up from 60% and 45% respectively in the Winter Forecast.
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Retail Space
“Developers are recognizing that diversity in retail centers is the driver today. People want to go to one retail center to work out, eat, buy their groceries, and get a coffee. Service-oriented businesses complement your standard grocery-anchored centers.”
Past Surveys
SUMMer 2023
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2024
WINTER 2024
0%
10%
20%
40%
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70%
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30%
NorCal
SoCal
2025
SUMMER 2024
Here are the four key takeaways from the report:
X
Nathaniel Touboul
PARTNER / ALLEN MATKINS
“Sentiment is generally optimistic in the office sector, but varies from asset to asset, depending on its classification. Here in the Bay Area as well as in most gateway markets, class-A, highly amenitized tier-one assets in prime locations are generally in a league of their own, commanding historically high rents and low vacancy rates.”
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X
JONATHAN LORENZEN
Brian W. Michel
pARTNER / ALLEN MATKINS
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“One of the main trends I'm seeing right now in the retail sector is an increased investment in existing shopping centers, mainly those that are in good locations in close proximity to areas where customers really work and live.”
X
JOEY REAUME
Executive Vice President and Principal / SRS Industrial
“If we look at a 30,000-foot view of the overall industrial market for Southern California and the Inland Empire, 2025 was actually a pretty active year. Rental rates have, for the most part, stabilized in the West. The east we believe had a little bit of a dip in 2025. Hopefully, it will start stabilizing in 2026.”
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X
SONGYI WANG
Director of Investments / Greystar
“The Bay Area has continued to recover and is the best performing market across the West Coast and nationally. Both San Francisco and San Jose saw really strong rent growth in the spring and summer of 2025.”
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Principal, Runyon Group
Partner, Real Estate
Allen Matkins
Winter 2025
SPIKE WHITNEY
Co-Founder, Managing Partner
Bridgeway Real Estate Partners
“When you look at Los Angeles, Orange County, and San Diego, there isn't really one primary industry that's dominating office leasing right now. The one exception would be aerospace defense or space tech, which we are seeing in markets like El Segundo and certain pockets of San Diego.”
2024
SUMMer 2025
90%
SANDY JACOBSON
Partner
Allen Matkins
michael van every
President and Managing Partner
Republic Urban Properties
“In 2026, we’re seeing a mixed outlook. In the Bay Area, rents are increasing coupled with job creation through AI, but it’s still challenging for ground-up development because we’re not sure where the interest rates will go in 2026, which also has an effect on treasury borrowing rates.”
2026
winter 2026
SUMMer 2025
SUMMer 2025
winter 2026
Housing shortage makes an impact
Market
broadens
Fundamentals improve
Demand outpacing supply
OFFICE
RETAIL
INDUSTRIAL
MULTIFAMILY