San Jose's Future Is Less than Bright

SAN JOSE, CA-According to Colliers International, stability is the best-case scenario for Silicon Valley commercial real estate in 2003, with net occupancy gains not likely before late 2003 or early 2004.

“While expectations are not particularly optimistic for a significant near-term rebound, Colliers expects that 2003 will produce more demand for commercial real estate than 2002″ says Jeff Fredericks, managing partner at Colliers in San Jose. “How far and how fast the market bounces off the bottom is more difficult to gauge. But Colliers expects the bounce to be noticeable and that it will exceed expectations for a repeat of 2002, or worse yet, that a double-dip recession will be the impetus for an even-worse 2003,” he says. A recent Colliers report revealed that total activity in 2002 was even less than what was recorded in 2001, and less than any year dating to 1990.

“Across all sectors combined, we are calling for increased activity levels in 2003,” Fredericks adds. “Based on historical figures and current market forces, R&D and warehouse activity stand the greatest chance of posting increased absorption over 2002, and office and industrial activity are more likely to be mirror images, or slightly less than 2002.”