The Jones Lang LaSalle outlook for office space in San Francisco:
Downsizing companies paired with sluggish tenant demand will cause downward pressure on rental rates to gain momentum in 2009. Rising vacancy rates, barring an unexpectedly rapid recovery, market fundamentals in 2009 will be downward trending as negative net absorption is expected.
Maturing debt, constrained lending and depreciated asset values will place a number of San Francisco building owners in jeopardy of default, forcing recapitalization or distressed sale transactions. This should present attractive opportunities for buyers with significant pools of equity financing.
And for Silicon Valley:
Although the outlook for the Silicon Valley is grim, the general consensus is that the market is well positioned to weather this downturn. During the tech wreck, the Silicon Valley lost over 231,000 jobs or nearly 21 percent of its workforce. Preliminary estimates have the valley shedding up to 26,000 positions in 2009.
∙ North America Office Report – Q4 2008 (pdf) [joneslanglasalle.com]
∙ Pro Forma Problems: Find Commercial, Replace With Residential? [SocketSite]