Real estate leadersoverwhelmingly agree that fundamentals are strong, lending hasn'tgotten out of hand and the market is strong—and that means there isno recession on the horizon. But, just because real estate causedthe last recession, doesn't mean that it will cause the next one.At RealShare Southern California last week, some of the speakershinted that technology companies are at best has some financialtroubles and at worst will be the purveyor of the nextcontraction.

On the Uncovering Hotspots – Identifying DevelopmentOpportunities in Southern California, speaker SimonAftalion, development director at MarkwoodEnterprises, said technology would cause the nextrecession. “I don't think that our next recession is going to becaused by real estate,” he said. “It is going to be technology,because I think that sector is acting like the real estate marketdid in the early 2000s.” On an earlier panel focused on capitalmarkets, Michael Klein, co-founder and CEO atFreedom Financial Funds, also suggested thattechnology companies were having financial problems that couldimpact real estate owners. He suggested that interest rates mightbe the catalyst for some issues for those companies.

The Uncovering Hotspots panel included speakers BobSonnenblick, principal at SonnenblickDevelopment; Adrian Goldstein, founder atCGI Strategies; Rick Raymundo,senior managing director of investments at Marcus &Millichap; and John Petrov, president atBaldwin Construction, with moderatorMarcus Arredondo, corporate managing director atSavills Studley—and many of them agreed that wewere nearing the end of the cycle, even if real estate wouldn't beits demise. Sonnenblick said, “We are at the bottom of the ninthwith two outs. The game is over.” Raymundo echoed the opinion,saying, “The game is over and we are in a rain delay,” adding thata lot—at least for real estate investors—will hang on the outcomeof the Costa Hawkins repeal. Petrov was more positive with hisoutlook, putting the cycle at the 7^th inning, but addingno more commentary.