Cushman & Wakefield predicts that rents will have dropped anywhere from 13% to 18% in the San Francisco and Silicon Valley markets by the end of 2001. The city's Financial District will begin experiencing mild rent growth and stabilized vacancy rates in 2002 and 2003, according to the forecast. In the South of Market area, Cushman & Wakefield expect additional rental decreases in 2002 and stabilization in 2003.

Experts continue to refer to the situation as a return to more normal levels of activity after the frenzied pace of the last two years. The Financial District office market here experienced increases in asking rents of 45% in 2000. Non-central business district markets (including the South of Market area) saw more erratic rent growth to an astounding 80% in 2000.

Central business district rents dropped by more than 10% in the first quarter of 2001, but Cushman & Wakefield forecasts a flat market through the next three years. In other areas of the city, asking rents dropped more than 12% during the first quarter.