Dozens of property investors, from San Diego to San Francisco, are beginning to suffer from vacancies created by shrinking demand from dot-com tenants. Meantime, a small but growing number of retailers have begun trimming back their Golden State operations, even as some retail investors struggle to cope with the string of closures triggered by failures in the movie-theater business.
"The current low rate of unemployment, the narrowing of the interest rate spread and the disappointing corporate profits have been pointing to the end of the economic expansion for some time," says Edward Leamer, an economist at UCLA's Anderson School of Business. Though the national economy will slow more than California's next year, he adds, the statewide unemployment rate appears certain to rise and growth here will moderate in 2001.
The dot-com shakeout that started on Wall Street last spring is now spilling over into California's office market, where dozens of failed or downsizing Internet tenants have put more than two-million sf of their office space up for sublet.
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