Is California Ready for a Recession?

Commentary Several economic indicators are flashing warning lights for a recession in California. Unlike the 2020 recession, which ended as quickly as the COVID-19 restrictions were lifted, this one would be more structural. Some indicators: 1. Allen Buchanan, a principal with Lee & Associates Commercial Real Estate Services in Orange, is warning of price reductions for logistics buildings. These are distribution hubs for retailers. The most visible such warehouses are for Amazon and other online retailers. The lower demand indicates slackening sales to consumers. He wrote June 8, “Before June 2022, these boxes were devoured by hungry occupants even before construction was completed. Now they sit. In some cases, for months. Those deals that have transacted are much less than the halcyon days of two years ago. Now a creditworthy tenant can expect to pay $1.75-$1.85 triple net for the same address that not too long ago commanded a 17 percent higher rent.”...