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National Real Estate Market Poised For Soft Landing

SAN FRANCISCO-While not recession-proof, the national real estate market is poised for a soft landing in case the economy chills, according to a just-released 2001 forecast report from Marcus & Millichap.

By Becky Bergman | Updated on January 08, 2001

SAN FRANCISCO-The real estate investment market should remain healthy throughout 2001 despite the one-two punch of an economic slowdown and sharp corrections in the technology and dot-com sectors, according to a 2001 forecast report released by Marcus & Millichap this week. Harvey Green, president and CEO of the real estate investment brokerage, says the supply-and-demand chain should remain solid in most markets with only a few exceptions.

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.

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