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Energy Crisis Won't End the Good Times--Not Yet

SAN DIEGO-Fears that the state's power shortage will halt the real estate boom are unfounded--at least for now. However, one of the region's leading tenant representatives, says other forces at work could damage the market.

By Randyl J. Drummer | Updated on April 01, 2001

SAN DIEGO-Although California’s power shortage by itself won’t bring a halt to the current real estate boom, the state has no more than two years to fix the problem or face a full-on business exodus, according to one of the region’s leading tenant representatives.

If anything ends the good times in the short term, it will be a combination of the dot-com meltdown, tightening capital markets and venture capitalists skittish about the national economy, according to David B. Marino, EVP and principal of San Diego-based Irving Hughes.

“From a owner perspective, the real estate good times, as they’re being referred to, are being affected by decisions made by corporations–largely technology companies–to right size,” says Marino. “These companies are re-evaluating their revenue models and forecasts, determining how many critical employees and how much cost-effective space is required to achieve profitability and survive during slowing economic conditions.”

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