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IRVINE, CA-”The waiting game” was a common theme reverberating throughout yesterday’s third annual RealShare Orange County conference, held at the Hyatt Regency Irvine. With roughly five million sf of office product set to hit the market over the next 24 months, developers and tenants alike are waiting to see who will blink first.

And with good reason–Orange County’s been here before. The early 90s saw many deep pockets emptied as supply outpaced demand. A shared mindset said “never again.” John Parker, chairman of Parker Properties, said it can be difficult to avoid a dip once the machinery gets going. “After the last cycle, lenders said they would not let this happen again, but they’re pushing money at us,” he noted.

Insiders debated whether history is set to repeat itself, asking if the market is gearing for a precipitous fall. The general consensus favored cautious optimism, echoing the familiar refrain “no, but… .”

At the Town Hall Meeting, moderator Joseph Vargas, a senior managing director with Cushman & Wakefield, posed an interesting question: “We’ve had 10 years of tremendous levels of investment sales, record low cap rates and tremendous job growth. Can it keep going?”

Panelists agreed that the industry’s players could likely encounter some bumpy roads in the near term. Michael Hayde, CEO of Western National Group said he believes in cycles and “I can’t believe we’re the only industry immune to that.” Parker said, “Cycles are coming. The only problem is, we don’t know how long or how deep. I’m bullish on Orange County, but by 2008, we’ll probably be overbuilt again.”

Bill Halford, president and CEO of Bixby Land Co., approached the situation from a different angle to comment on existing product. “In our view, the market [in Orange County] is overpriced.” Halford added that his firm has been an aggressive buyer in the Bay Area instead, where investments have not been at such a feverish level. “The whole world is so bullish on Orange County it’s great if you’re a property owner today, but it’s difficult to be an investor.”

During a panel titled “The Great Debate: Landlords vs. Tenants” Mark Carlson, a principal with Rreef, said to expect the investment market to make a transition next year. He’s already seeing the early signs. “We sense a slowing of capital to core real estate. In recent times, we would have 20 offers on core real estate. Now we’re seeing five or six offers.”

As for the landlord-tenant debate, Jim Travers, president of Travers Realty, said Orange County is the best market in the country, particularly for tenants. “No where in the country are there as many quality office projects being built on spec as there are in Orange County. From a tenant’s perspective, that’s like ‘bingo’ to capitalize on that.”

The sticking point will be in seeing what concessions landlords will make. Travers said 10 years ago, it cost $65 per sf to build out a Taj Mahal-like office environment for a big law firm. Today, that price tag is $130 per sf. “Who’s going to spend $130 per sf for the build out of space?” Travers asked.

Featured speaker Lucy Dunn, president and CEO of the Orange County Business Council, said “a vibrant real estate market is more than square footage and deals.” Dunn took a big picture view to the subject and pointed out that housing affordability, job growth, population growth and traffic congestion are all issues that must be met for the real estate industry to remain vital and vibrant.

The housing crunch, in particular, has been problematic. As an example, Dunn pointed to Cal St. Fullerton’s plan to employ 500 new professors over the next several years. The sticking point: “potential candidates can’t find affordable housing options” in Orange County where the median home price now teeters around the $700,000 mark,” Dunn added.

Other panels at the conference included sessions on how to get deals done in today’s environment of low cap rates; a look at what to expect in the near term in the county’s apartment and condominium markets; the state of the Orange County investment market; the impact of tenant-in-common buyers in the county; and redevelopment opportunities in the market.

In all, the conference played host to more than 400 industry insiders. The RealShare conference series is presented by Real Estate Media Network, publishers of GlobeSt.com, Real Estate Forum and Real Estate Southern California, as well as a number of industry newsletters.

The event closed with the popular Inside the Mind series. This installment featured a one-on-one interview between Michael Desiato, group publisher and editorial director of Real Estate Media Network, and Bob Campbell, president of CT Realty Corp.

Campbell, whose commercial real estate career spans more than 35 years, provided a cautionary tip to young professionals considering a career in the industry: “It’s okay to hit singles and doubles,” Campbell said. “Eventually you’re going to get home and it’s easier to do those deals.”

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