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Voit, for one, is reporting an increase in leasing and salesactivity across all commercial property types, having completedmore than 30 transactions encompassing upwards of 240,000square-feet for the month of February alone.

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The increased activity, however, is far from a roaring recovery.Cassidy Turley BRE Commercial notes in its report on the officemarket that although the outlook "is more optimistic as evidencedby a decrease in countywide direct vacancy rate and positiveabsorption reported during the fourth quarter," the office market"continues to lose tenants due to a weak employment market."However, the report also offers an upbeat note: "Between Septemberand November, government, professional and business servicescombined have added 13,800 jobs countywide despite the financialsector losing 600 jobs in the same time period," the Cassidy Turleyreport points out. Those numbers provide "some signs of recoveryfor office tenants," it says.

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A recent forecast from Grubb & Ellis Co. regarding the SanDiego market expects to see more creative partnerships betweenlandlords and tenants in 2010. The majority of tenants will favorshort-term lease extensions despite landlords offering generousconcessions to tenants who are willing to sign long-term leases.Some landlords, however, still prefer short-term leases in thehopes of being able to take advantage of increasing asking rateswhen the office market recovers, the report says.

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"Communication between landlords and tenants, or borrowers andlenders, is more important than ever before," says the G&Ereport, noting that regular communication allows both sides toengage issues quickly, preferably long before significant problemsarise on either side. "Landlords faced with the challenge offilling space and retaining existing tenants might considerincorporating more intense management and marketing strategies inan effort to stay competitive."

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Cassidy Turley says that buyers this year will focus on qualityassets and be prepared to hold them until market fundamentalsimprove. San Diego's long-term outlook remains positive for severalreasons according to Cassidy Turley: the diverse economy, which isthe 16th largest in the nation among the 366 US metropolitan areas,based on a 2008 GDP of $169.3 million; steady government andDepartment of Defense spending indirectly translates intoadditional employment growth in local manufacturing, construction,service, research and development, and technology companies; thepresence of some of the best universities in the nation; stronghealth and biotechnology industries; a young and growing population(median age 35); and an excellent quality of life.

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Based on the market reports from a variety of sources, the SanDiego region seems headed in a positive direction. The pace ofrecovery, however, remains to be seen. As Cassidy Turley says inits report, "There is no doubt that the recovery in the officemarket will be slow as many companies, upon laying off employees,have excess space that must be filled before there is an increasein demand for new office space." Market reports from a variety ofsources suggest that the same slow pace of recovery will be thecase for other property sectors as well.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.