In dot-com and high-risk tech concentrated locales – such as the San Francisco Bay Area – the demand for office space will continue to experience record levels despite any economic downtowns in the rest of the country. Any space given back has been quickly leased due to pent-up demand, although the slowdown could cause the demand for second and third wave of sublease space to wane, according to the report.

It is anticipated that San Francisco will remain among the tightest markets nationally, experiencing above-average rent growth and may even see some leases reaching $100-per-sf for the first time. The study predicts that as "the economy settles into a more moderate growth pattern without falling into a recession," investor concerns will diminish during the first quarter of 2001.

The construction industry, which has experienced an explosive growth in recent years, is likely to witness a decline during the next 12 months if the economy slips into a more severe downtown than initially expected, which could in turn lead to reduced spending on home remodeling, office building and government projects, according to the report.Although retail development financing will still be available, terms will vary depending on the type of project involved, according to the forecast report.