Commercial real estate activity in the North San Francisco Bay Area continues to be a challenge. Tenant activity has been very light the last 2 months due to a variety of factors such as falling residential real estate prices, gasoline costs, unemployment and the weak dollar. Leasing for office and retail space seems to be hit the hardest while warehouse space still is moving, albeit at a very slow pace compared to the previous 4 quarters.
We expect this trend of slow activity to continue through 2009. However, it is an excellent time to pursue opportunities as sale prices are down on a cost per square foot basis. Capitalization rates are still low in comparison to the rest of the country because rents have not increased as sale prices have come down. Historically this should change as commercial real estate in Marin and Sonoma counties has shown a steady increase over time. Bottom line, a long term buy/hold investor who is willing to take some risk could benefit greatly in the years to come.
There is going to be a huge roll out over all this for us to recover as a country years. I am a Dallas Real Estate Realtor (residential commercial) & Dallas loan officer, however I figured out how side step money is still rolling
Comments(6)