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The biggest commercial real estate deal in Silicon Valley last year closed in the very last month and it was a whopper of a deal. If the economy weakens, rent and NOI growth could clearly drop and could become negative.Cap rates can also be negatively impacted by tighter lending by banks.The failure of some banks that started with Silicon Valley Bank is likely to cause a tightening of terms that banks are willing to provide for commercial real estate.That said, there are a lot of non-bank lenders for commercial real estate. Dear Abby: I have a great life, so why have I fallen into this shameful behavior? There are a number of differences between the pressures in real estate markets now and during the financial crisis in 2008. He is a graduate of San Jose State University with a BA degree in broadcasting and journalism. Demand for affordable and workforce housing far outweighs supply. Urban retail tends to boast higher rent levels than other retail, Calanog said. At present, demographic pressure on housing markets is at its peak. E-commerces need to get products into consumers hands sooner is whats driving a lot of innovation, Calanog said. Our forecasts suggest that unless the Fed changes course, 2023 will be characterized by slower GDP growth as monetary policy continues to tighten and global economies adapt to inflation, Calanog said. Neighborhood shopping centers in well-populated residential areas continue to perform well. Locally Researched by: Rosie Downey Apr 28, 2023, 6:00am PDT. Improve value through positioning, marketing and leasing of vacant space in owned assets. The $11.8 billion mistake that led to Bed, Bath & Beyonds demise Phillip Powell, Ph.D., Clinical Associate Professor of Business Economics, Indiana University Kelley School of Business, Matt Kinghorn, Senior Demographer, Indiana Business Research Center, Indiana University Kelley School of Business. Many questions have been raised on how housing is accounted for in inflation estimates from established price indexes, such as consumer price index and personal consumption expenditures. We will email you a link to reset your password. Anna D. Smith, Silicon Valley Real Estate Broker based in San Jose, CA David Azimi, Silicon Valley Real Estate Broker based in Milpitas, Sunday, 30 April 2023 01:24 GMT The owners equivalent rent of residences was up 6.9% from the year As I often tell my students, it is easy to get distracted by the average in real estate. An accelerated shift to e-commerce coupled with supply chain disruptions continue to bolster demand Silicon Valley saw industrial annual occupancy gains reach Silicon Valley The future of the office remains to be seen, the Colliers report stated. See how JLL pairs technology with unmatched real estate services and expertise. 28 Apr 2023 02:26:22 28 Apr 2023 02:26:22 Access solutions for retaining talent, enhancing employee experience, and reducing costs that improve productivity and optimize spaces for occupiers. But they wont be empty for long, Google stays committed to downtown San Jose, mayor and tech titan say, Do Not Sell/Share My Personal Information. Find media contacts, and get access to commercial real estate news and announcements. So, higher cost residential supply continues to grow, while the number of people that can afford those units is a small and shrinking part of the population. Silicon Valley tech companies lead office sector rebound More than $1 trillion in commercial real estate loans will come due before the end of 2025, and as banks tighten their underwriting, many borrowers may struggle to refinance their debts. Find an expert unique to your industry or business objectives. So, the looming question is: can we create a bigger plane before we run out of demographic runway? Enhance your job search, speed up the application process or simply learn more about life at JLL. Local and smaller banks are much more skewed toward suburban offices (31% share of the market) and medical offices (43%), versus just a 10% share of loans for central metropolitan offices. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content. Commercial Real Estate Silicon Valley's biggest commercial real estate sale of 2021 was a Office buildings in central metropolitan areas have been the hardest hit by losses in occupancy since the pandemic as more employees work from home. Research Silicon Valley Industrial Insight - Q1 2023 Summary and analysis of Silicon Valley's current economic and industrial real estate market conditions. One of the highlights was the keynote by new San Jose Mayor @MattMahanSJ . We have over 300 offices in every major city around the world. Find commercial properties for lease or sale. Browse properties for sale or lease that fit your location and unique needs. Pandemic disrupts Silicon Valleys nine-year absorption streak, stated the headline of the report, which was prepared by Lena Tutko, San Jose-based senior research manager for Colliers International. Our news is free and we intend to keep it that way. The current bubble in demand generated by Millennials will slowly deflate, as Baby Boomers downsize their living space and age out of the housing market. Find valuable services to support your business at every stage of your journey.