While 2000 was a healthy year for the commercial real estate investment market, with rising values and strong transaction volume, it ended with a great deal of uncertainty, according to Robert A. Freund, VP and director of investment services for Colliers International.
Although the current slowdown is sobering, San Diego's strong fundamentals will maintain its position as one of the most attractive investment climates in the country, according to Freund. He predicts that vacancy rates across product types may rise modestly but should still remain near the current record lows.
"Much of the 'frothiness' generated by continuing high levels of space demand and steeply rising rental rates has slowed with the failure of some of these tenants to maintain their momentum," according to Freund.
Meanwhile, the failure of some "dot-bombs" may have a slight ripple effect on absorption, as companies re-examine, and in some casesscale back expansion plans, he said. However, rental rates will continue to grow, albeit within the healthy spikes of the past.
"Restrained additions to supply, good pre-leasing of new product, scarcity of large, contiguous spaces, continued demand from internal growth, as well as in-migration from more expensive Bay Area markets should continue to support moderate rental rate growth in most sub-markets." adds Brian Driscoll, SIOR, SVP ofColliers International.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
