President's Message
 As we head toward the end of 2012, the commercial real estate industry continues its gradual recovery from the debt crisis. While things seem to be improving generally, we are still a long way from the state of equilibrium everyone is hoping to see. Uncertainty continues to be a major theme as the political environment and economy present the biggest drag on absorption and hiring. The election may add some clarity, but the “fiscal cliff” will be difficult to address in the face of political paralysis. Speaking of drags, we still have +/-$1.5 trillion of maturing commercial property debt over the next five years, with roughly half of that under water, which presents another major challenge. In Southern California, job growth continues to underperform expectations. To date, we’ve experienced a “jobless recovery” with employers hesitant to hire new, full-time employees. Of course, there is some growth, particularly in the education and health care sectors, but not enough new jobs are being generated in other professional and manufacturing sectors to create real momentum. In general, there are spotty improvements of fundamentals in certain submarkets, but overall, there is still high vacancy and sluggish net absorption which all translates into a “tenant’s market.” In particular the office sector, as we know, is suffering the most as office tenants work to use less space per employee. Retail is going through a shift away from “bricks and mortar” toward “e-tailing.” At this point, no one is really sure where that will shake out - with bricks and mortar retailers suffering, and the industrial sector getting a boost as a result. The hotel sector is recovering, but not enough to spur significant new development. With office and retail lagging and the hotel sector in recovery, the bright spots in the industry continue to be the top performing apartment and industrial sectors. All that said there is an enormous amount of capital finding its way into our market seeking higher yield that is currently not available in bonds or equities. This has resulted in higher prices and lower yields for properties that are well located and have stable tenants. Those properties “outside of the fairway” remain distressed with a lack of capital to be repositioned or redeveloped. As we strive to understand the ever-changing market dynamics, NAIOP SoCal will continue to provide you with resources, legislative advocacy, education, and networking events that keep you informed and up-to-date on what is happening now in our industry. We recently held our Annual Fall Forum Capital Markets Review offering up-to-the-minute insight on debt and equity on both a local and national level. We also held our annual invite-only Leadership Symposium, developed for the highest ranking officers of our chapter’s platinum sponsors. The evening featured an off-the-record discussion focused on the upcoming elections with our special guests Rex Hime, President and CEO, CBPA; Clifton E. Rodgers Jr., Senior Vice President, Real Estate Roundtable; and Aquiles Suarez, Vice President for Government Affairs, NAIOP. Looking ahead, I encourage you to come and show your support for top real estate graduate students by attending the annual USC vs UCLA Real Estate Challenge that is set for November 15, 2012 at Covel Commons on the UCLA campus. This is a tie-breaker year with UCLA at 7 wins vs. USC at 7 wins! Featured speakers will be Dick Ziman, Chairman, AVP Advisors/Rexford Industrial; Terry Donahue, former UCLA football coach; and John Robinson, former USC football coach. Finally, I want to extend my congratulations to Zachary Niles, Senior Vice President, Jones Lang LaSalle, and Kevin MacKenzie, Senior Managing Director, HFF, LP, who have been named as two of the recipients of NAIOP’s 2012 Developing Leaders Award. In an effort to engage and encourage up-and-coming young commercial real estate professionals, NAIOP established the Developing Leaders Award in 2006. The honor was designed to engage tomorrow’s leaders and connect them with NAIOP’s increasing education and benefits available to new and developing professionals. Please continue to allow NAIOP SoCal to be your partner in keeping you up to speed on the commercial real estate business in Southern California. Steven Ames, President
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