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Tenant Rep Exec Says Worst is Ahead

SAN DIEGO-"Speaking personally with executives across industry sectors and with capital sources, the message is that it is time to cut costs and make every dollar count," says David B. Marino, executive vice president and principal of Irving Hughes, San Diego's largest real estate services firm specializing in tenant representation.

By Randyl J. Drummer | Updated on June 08, 2001

SAN DIEGO-The county’s commercial real estate market today is defined by fewer and smaller new deals and more and bigger vacancy rates as downsizing tech companies flood the market with sublease space in an attempt to cut their burn rate and stay alive long enough to reach profitability. Those are the thoughts of David B. Marino, executive vice president and principal of Irving Hughes, San Diego’s largest real estate services firm specializing in tenant representation. To boot, Marino says the worst is yet to come.

The U.S. and San Diego economies have more in common with those of 1991 than with those of the last five years, Marino says. Prudent managers may delay capital expenditures until a time of greater economic certainty, he said, and San Diego companies of all sizes are deciding not to take expanded space or are reducing their existing facilities, Marino says.

“Investment of capital–from the IPO market and from venture capital/angels investors–is what has fueled the San Diego and the technology-oriented submarkets from Carlsbad south to Del Mar Heights, Sorrento and University Towne Centre east to the I-15 corridor submarkets for the last five years,” says Marino. “Now, the IPO market is dead, and will be for some time.”

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