Experts at a March 2 commercial real estate conference said the San Diego County market is well on its way to recovery, but hasn’t shaken off the hangover effects of the Great Recession.
Among those are lingering consumer jitters, and loan debt still facing over-leveraged commercial owners who bought properties at pre-recession peak prices.
“We’re probably just halfway through this difficult period,” said Richard K. Davis, chairman and CEO of U.S. Bank, keynoting the 16th annual Real Estate Conference, presented by University of San Diego’s Burnham-Moores Center for Real Estate.
Several panelists invoked Davis’ theme of “It’s halftime,” noting that economic challenges are more than matched in the commercial sector by some historically favorable conditions, including low interest rates, ample financing sources, and competitive lease pricing for commercial space.
“This low interest rate environment probably saved real estate from much bigger problems,” said Sam Davis, a senior managing director with Allstate Investments, a division of Allstate Insurance Co. of Chicago.
On the construction side, apartment projects are the only real bright spot in real estate, as demand rises amid obstacles to home ownership in markets including San Diego.
Frank E. Nothaft, vice president and chief economist for Virginia-based Freddie Mac, noted that single-family homes are historically as affordable as ever, but many consumers still are not in the mood to make large, long-term financial commitments.
The real estate conference was held at Hilton San Diego Bayfront Hotel and had several local corporate sponsors.
— Lou Hirsh
