As published in CA Real Estate Journal, September 6, 2005

-Interviews by David DePoy, Mandy Jackson and Julie Nakashima

"There's a tremendous amount of activity. The absorption level is high, and that's why the [Class A office high-rise] developers are in the process of building the towers again. Rental rates have increased here in 2005 quicker than what was previously anticipated, and I think that is motivating, again, the high-rise developers to push forward with their buildings. A lot of square footage is being leased to mortgage companies."

-Doug Killian,
senior vice president,
Voit Commercial Brokerage, Irvine

"[In San Diego]we're seeing a lot of office relocating, including firms from Houston and Atlanta. We just recently placed a headhunting firm from Hong Kong downtown. Businesses are definitely moving into San Diego regardless of what people are saying.

"We're seeing new companies as well. We recently worked with a new company that produces software for music. We put a jewelry-design firm in downtown. We're seeing people who started businesses in their home and now they see a need to move into an office.

"Typically, this is the time of year when there's a big slowdown with people on vacation and sending kids back to school, but this is one of the busiest times we've seen all year. I think that makes for a strong market in the fourth quarter as well."

-Matt Carlson,
sales associate
Coldwell Banker Commercial Towne Centre, San Diego

"Substantial demand for new product continued to fuel absorption, causing 75 percent of construction completed during second quarter to be absorbed.

"With robust leasing supporting the expanding local population and a limited supply of new, deliverable product on-hand, the vacancy rate dropped to a low 7.4 percent, down from 10 percent a year ago, while net absorption increased by a staggering 185 percent over the same period.

"The pace at which new product is introduced to the market remains a closely monitored issue, especially as multiple larger projects break ground over the next year. Some of these developments, many of which will target the same Class A credit tenants, will be subject to increasing new supply levels, which could, at least temporarily, overpower demand into 2006."

-John Ewart,
senior vice president
Grubb & Ellis, Ontario