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M. The Impact of Commercial Office Space on the Pasadena Economy
<br />Essential to Pasadena's continued economic growth and development is a healthy marketplace
<br />for office space. Office uses generate significant return for municipalities. In addition to
<br />property tax and business fees returned to local governments, office tenants spend money in local
<br />restaurants, contract with local service providers and buy from local suppliers. Office workers
<br />eat in local restaurants, shop in local stores and have their cars serviced in local dealerships and
<br />repair shops.
<br />Projections from the Allen Matkins UCLA Anderson School Economic Forecast for 2008 and
<br />the Los Angeles Economic Development Corporation anticipate that 90% of economic growth in
<br />California to 2014 will come in service occupations: administrative and support services, retail
<br />and hospitality, healthcare services, professional, scientific and technical services. The fastest
<br />growing are expected to be healthcare, education and computer -related fields. At the same time,
<br />construction is expected to generate 163,000 new jobs.
<br />Growth industries are those utilizing commercial office space. In 2006, professional and
<br />technical jobs were 14.3% of the jobs in CA. Education and healthcare were 10.5% of CA jobs.
<br />In Pasadena in 2002, according to US Census figures, architecture, engineering, design and
<br />related companies generated revenues of $793,000,000. Of those, engineering firms generated
<br />$618,000,000 in revenue. Of those, companies providing environmental consulting service
<br />generated revenues of $11,800,000.
<br />In the San Gabriel Valley, it is expected that job growth will occur in professional and business
<br />services, including accounting and legal, architecture, design and engineering. These are high
<br />wage jobs, even for support staff, that could significantly bolster Pasadena's economy.
<br />The office vacancy rate in the San Gabriel Valley in 2006 was 6.6%. For Pasadena the vacancy
<br />rate in 2006 was slightly less than 5%, according to figures from the Allen Matkins UCLA study.
<br />The previously strong office marketplace has been subject to economic uncertainties, as well.
<br />This has resulted in growing vacancy rates. In Pasadena, much of the office vacancy is due to
<br />constriction of companies directly involved in the mortgage and finance industries. The current
<br />vacancy rate for office space in Pasadena (including sublease space) as of October, 2008, is
<br />approaching 19% according to Cushman & Wakefield.
<br />Pasadena has 5,829 businesses that provide 98,199 jobs, according to the most recent census
<br />figures from 2000. More recent estimates suggest that 110,000 people work in Pasadena on any
<br />given day. The average wage earned in Pasadena is $51,141. hi contrast, Pasadena residents'
<br />average per capita income is $34,426. In 2007, the total wages earned from jobs in Pasadena
<br />equaled $5,021,995,059. In 2007, the San Gabriel Valley lost 14,386 jobs. The unemployment
<br />rate for the Los Angeles area (including Pasadena) rose from 5% in September 2007 to 7.3% in
<br />September, 2008.
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