A look at the top news and happenings shaping the construction industry in California.
Survey Finds Mixed Outlook by California Developers
Commercial real estate developers, owners and investors across California expect a downturn in office and retail development over the next two years but foresee growth for the industrial and multifamily housing market sectors. That is according to a biannual Commercial Real Estate Survey for Winter 2021, conducted jointly by The University of California-Los Angeles Anderson management school (UCLA Anderson) and law firm Allen Matkins.
The Commercial Real Estate Survey and Index are designed to predict future California commercial rental and vacancy rates looking ahead three years, surveying commercial developers and financiers of commercial development in major California geographical markets.
Among their key findings:
California High Speed Rail Reveals New Draft Plan
The California High-Speed Rail Authority recently released a revised plan for completing a key construction segment in the Central Valley that reflects major impacts from the COVID-19 pandemic.
In the revised plan released on February 9, 2021, the Authority laid out a delayed timeline for completion of the 3 package Central Valley segment, noting they expected substantial completion on the first 22-mile segment (construction package 4, led by California Rail Builders) in about 15 months. The other two construction packages – package 1, led by Tutor-Perini/Zachry/Parsons, and package 2-3, led by Dragados/Flatiron – would be pushed into 2023.
The Authority said that costs have risen by about $330 million over the current budget of $12.4 billion. The plan noted that “because of the risk and uncertainty that lays ahead, we propose to increase our contingency budget considerably.”
Additionally, the Authority’s plan calls for changing the timing, approach to construction and phasing of the track installation to “mitigate risks affecting our Track and Systems procurement.”
The report pointed to major advances the High-Speed Rail program made in recent years, including:
According to CEO Brian Kelly, “Our job now is to advance the work we have started to keep Californians working, recover from the impacts of a global pandemic and progress this transformative project.”
The release of its draft business plan kicked off a 30-day public comment period that will close on March 12, 2021. To view the draft plan, go to www.hsr.ca.gov.