SIOR Hosts Member Networking Event at Ferry Building


Commercial Real Estate Panel Shares Insights Into What’s Ahead for Final Quarters of 2022

SAN FRANCISCO – April 7, 2022 – The Northern California chapter of the Society of Industrial and Office Realtors® (SIOR) held its annual kick-off meeting at the Ferry Building last month. Panelists included Todd Berryhill, managing director, Scannell Properties; Travis Durfee, senior vice president, market officer – San Francisco Bay Area, Prologis; Drew Gordon, executive vice president, California office operations, Hudson Pacific Properties; Miles Treaster, president/CEO, Five Horizons Capital and Paul Single, managing director, senior economist, senior portfolio manager with City National Bank. Here are some of the highlights from the panel:

Overall, everyone was optimistic about 2022 and 2023. Single said the economy is “unbelievably strong” and interest rates were already up 175 basis points since December 2021. He also said while there were 22 million jobs lost during the pandemic, the labor market is equally strong and bounced back as well.

“The uncertainty doesn’t affect the U.S. economy,” Single said. “Households can absorb the downturns.”

As for the consumer price index, it is the highest it’s been in the past 40 years, Single said. The Fed is transparent in the fact it will raise interest rates seven times this year.

On a local level, he pointed out that tech growth and innovation keep the Bay Area going.

In the discussion about technology, Gordon, with Hudson Pacific Properties, which owns the Ferry Building, said that industry is indeed driving increased headcount and company growth. Class A office buildings with tech bells and whistles, along with new health and safety features, will far outperform Class B and C buildings, some of which will not do well in the future. Overall, the office workplace is still in transition, he said.

The Bay Area has some of the top universities in the world, and this will continue to draw major innovation, creativity and capital to the region. Comments were made by various members of the panel that construction materials and labor costs in the past 18 months have gone up 1 percent per month, and some items such as steel roofing might require an 18-month lead time which further exacerbates construction. Industrial land in parts of the East Bay have hit $100 a square foot, which just a few years ago would have been unthinkable, but e-commerce has fueled the need for abundant warehouse space. Also, companies worried about the supply chain are taking extra space as a safety measure. Another industrial pain point, IOS (Industrial Outdoor Storage or yard space), is becoming more elusive for company truck fleets and commercial vehicles.

There was also mention that worldwide, the United States is still seen as one of the most stable, safest and best places in the world for major investments and there are billions of dollars from overseas seeking to place money here.


A little more about Post Modern Marketing...

Comments are closed.