Office in California Shows 'Signs of Life' as Dealmakers Find Common Ground
California continues to be a destination for real estate capital, both from private to institutional investors, according to Crexi's June 2026 National CRE Report.
Particularly for office, the asset class is showing "signs of life," especially in places like Orange County and San Diego, according to Adam Siegel, vice president of product growth at Crexi.
"The recovery has been slow, but it seems that sellers and buyers are finding common ground," Siegel told GlobeSt.com.
"AI Tech and law firms are taking larger spaces, but the return-to-office push of many companies is also helping to drive demand on the leasing market for smaller spaces. "The one constant is and has been a flight to quality with access to amenities when selecting space."
Retail remains a strong asset type nationwide, but in California, demand for quality assets, especially grocery-anchored assets, is increasing. Cap rates in the sector remain among the best in the country, according to the report.
"With limited supply and a growing number of retailers seeking space, we are seeing a very tight leasing market and strong lease rates across the board," he said.
For industrial, Siegel said the California markets have certainly had waves since the pandemic in 2020 — but now we are heading toward normalization.
"After years of what seemed like huge pendulum swings, we seem to have gotten back to a happy medium of right supply/right demand," Siegel said.
"Cap Rates may not get back to the record low levels of a few years ago, and the double-digit rental growth we saw, but California's location as an entry point for most goods coming from Asia and elsewhere means its location cannot be replaced, and demand will remain strong, driving investment capital moving forward."
National perspectives on Retail and Multifamily
Nationally, according to the report, retail remains the strongest-performing asset class.
Sale prices per square foot increased 45.6% year-over-year and asking prices climbed at a similar pace. Also, properties sold more quickly than a year ago, underscoring continued investor demand for high-quality retail assets.
Multifamily continued to show signs of stabilization, with asking prices rising 6.6% year-over-year, cap rates compressing and properties moving faster than last month, even as sale prices remain below year-ago levels, suggesting buyers and sellers are gradually closing the pricing gap.
Source: GlobeSt/ALM