The umpire threw his hands out from his side and yelled “Safe”, the runners advanced but only scored one run to tie the game, similar to the commercial real estate market in 2010, “Safe”, but moving forward slowly.
We are now in our second calendar year of the recovery, the economy has been stabilizing and is rebuilding, some economists say at a slightly faster than expected pace through the end of 2010. This was fueled by double-digit growth in business equipment, rebuilding inventory and software investment and an increase in consumer spending, pushing growth at 2.6 percent through the fourth quarter of 2010. The economy is expected to grow 3.2 percent this year which is up compared to a 2.7 percent forecasted in October. Goldman Sachs amended its U.S economic growth prediction from 2.0 percent to 3.4 percent for 2011 and the International Monetary Fund (IMF) raised its 2011 global economic forecast from 4.2 percent to 4.4 percent.
A few of the reasons for the economists’ growing optimism are: end of the year stock market gains, workers received an additional 2 percent payroll tax holiday which went into effect at the end of 2010, lenders lessening up loan restrictions and have minimized fires sales, especially for quality assets and a government that seems more sympathetic to the needs of small businesses, which historically accounts for two-thirds of new hires.
The outlook for the Marin County commercial real estate market is also brightening; the breeze is light but steady and the chill has given way to the sun as it peaks through the clouds. Office rates are stabilizing, and those all time low rental rates are slowly subsiding, which means that property values will start to increase again. The Marin office market net absorption recorded 127,547 square feet of positive leasing activity, but the overall year to date figures showed that 2010 was basically flat, which is a significant improvement from 2009.
All the indicators are pointing in an upward direction, a slow but steady economic recovery. Inflation is forecasted to be moderate in Marin County but will increase in two to three years. A great deal of the recovery will depend on the innovation that Marin prides itself on and the availability of new financing, venture capital and investors climbing back into the ring and taking risks in new and expanding companies.