Challenges are Manageable Due to Innovation

Sam Liccardo, San Jose mayor, speaks at the Benchmarks event regarding megatrends.

SAN FRANCISCO—There are many megatrends at play shaping the future of the Bay Area’s economy and commercial real estate markets. A BenchMarks event by Newmark Grubb Knight Frank was recently held to examine these trends and offer some insight into the future of the Bay Area market.

Capital markets activity nationally and locally remains solid, though some softening is occurring consistent with property performance, says Alexander Paul, managing director of national market research, NGKF. The capital markets outlook indicates that sales volume in the Bay Area for office and apartments will be below 2016 levels but sturdy during the mature phase of the cycle. Paul says pricing is expected to edge down and cap rates will likely edge up in the period ahead.