SAN FRANCISCO—“We seem to live in a bubble here in SanFrancisco.” That is according to moderator JordanMoss, first VP of CBRE, who recentlyspoke on the multifamily panel at the RealShare Bay Area conference here last week.The big question on multifamily experts' mind here was how deep isSan Francisco's rental pool?

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Stanford Jones, EVP of IPA,says that on a macro level, there is a disconnect of income andincome inequality in San Francisco. “We scratch our heads on howmany people can spend $4500 on rent in the city per month,” hesaid. “Who knows how deep that pool is?”

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Jones' concern is that when it turns off, it will turn offrapidly. But where and when that happens, remains to be seen, headded. “It will send shock waves through new and oldinventory.”

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Jones continued that “job formation and housing deliveries arekey points here in the Bay Area. 2015 will be the same pace and thesame multifamily sales volume provided we don't get a macroevent.”

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According to panelist Jason Pendergist, chieflending officer for Luther Burbank Savings, Theregion is in a unique spot where it has something unique to offerto the young workforce. Therefore, he said, “There will be aconstant pressure for infill rental units, which will push therents up.” At some point, he said, it will spill over outside theCity, and “that spillover will continue to rise.”

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As for new development, according to Pendergist, this market hasenough critical mass to it to absorb the multifamily delivery rateof new units in the pipeline. “We are optimistic on what this statewill do to stay competitive in the global marketplace,” he said.“Absent of any sort of earthquake or natural disaster that can comein and mess up the equation, all the stars seem to be aligned forthe foreseeable future.”

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More than 200 were in attendance at the RealShare ConferenceSeries event, which is produced by ALM's Real Estate Media Group,which also publishes Real EstateForum and GlobeSt.com.

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Jeff Burns, SVP of Walker &Dunlop, noted that the 2008 recession wasn't driven byoversupply and while there is a lot of activity going on right now,“the area can handle the new supply of units.”

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What is interesting is really labor and material costs, headded, which have gone through the roof in the last 18 to 24 monthsand “is delaying projects somewhat.” That generates more risk onthe takeout financing side, Burns said. “We are seeing somedevelopers think the window for low rates is wide enough now thatthey are just going to build… The financing market is kind ofevolving to try to create processes to assist developers to takethe [interest rate] risk off the table.”

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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.