Silicon Valley Real Estate Trends2008. What emerging trends are you witnessing in the market today that will be operative for 2008? The sub-prime mortgage.

Silicon Valley Real Estate Trends2008

What emerging trends are you witnessing in the market today that will be operative for 2008?

The sub-prime mortgage situation has had a huge affect on commercial lending. Lenders are really scrutinizing numbers and are now quoting 50-65% loan to values. Investment sales and cap rates will be significantly affected in 2008!

What emerging trends are you witnessing in the market today that will be operative for 2008?

We will have steady activity but not a lot of movement. Vacancy will not go down much and we could see a softening of rents. Overall, 2008 will be relatively flat.

What emerging trends are you witnessing in the market today that will be operative for 2008?

When possible, tenants are in "wait and see mode" as inflated rental rates stabilize.

What emerging trends are you witnessing in the market today that will be operative for 2008?

Tenants are looking for value.  Image doesn’t seem to be a priority.  It’s about practicality. 

What emerging trends are you witnessing in the market today that will be operative for 2008?

When we talk about a softening market, a little perspective is in order- 'softening rents' are generally coming off of aggressive 2007 asking rates. Compare current rates-not to mention vacancies- to those of 2Q 07, and its hard to see the softness.  

What emerging trends are you witnessing in the market today that will be operative for 2008?

Tenants sense that prices may plateau and because of less competition for buildings, greater concessions may reappear as Landlords attempt to balance their vacancies.  So we have a bit of  wait-and-see marketplace.  But they also sense that this is a temporary condition and that the next wave of technological evolution will result in a resurgence in rents and related pricing. This is the reason that many of the larger requirements in the market at this time are focused on ownership of their real estate, versus the traditional emphasis on leasing property.

What emerging trends are you witnessing in the market today that will be operative for 2008?

Demand will be steady, but not robust. Sales will continue with fewer buyers that receive acceptable discounts due to the lack of liquidity in the debt markets and higher cost of capital.

What emerging trends are you witnessing in the market today that will be operative for 2008?

Rents will stay flat with rental growth commencing towards the end of the year. Many younger companies have shifted their flight to quality to flight to economy and are leasing less desirable space in order to avoid current rental rates for class A and B buildings.

What emerging trends are you witnessing in the market today that will be operative for 2008?

I think that we're going to see a growing disparity between the core markets and the more peripheral locations. I'd expect that the real key markets will at least hold their own this year.

What emerging trends are you witnessing in the market today that will be operative for 2008?

2008 will be very similar to the market we saw in 1998, a virtually flat year surrounded by good to great years.

What emerging trends are you witnessing in the market today that will be operative for 2008?

Cash is King - as liquidity has been reduced, tenants are preserving their capital.

Silicon Valley Real Estate Trends2008