Economic Outlook Vibrant In Solano
By Shelly Meron/Business Writer
Commercial real estate is flourishing in Solano County and will continue to grow, according to experts at Wednesday's Solano EDC Real Estate Round-Up Breakfast event.
Brooks Pedder, of Colliers International, told the audience of about 200 people that "things are actually really good" for commercial real estate in Solano County. Vacancies are down, rents are rising for the first time in about six years, land values continue to rise, and many companies are migrating to the county from the Bay Area.
Specifically, Pedder said Vacaville has seen a drop in commercial vacancies from 17 percent last year to 9.8 percent this year. Fairfield has seen a drop from 19.9 percent last year to 8 percent this year.
Pedder said he believed the county will continue to grow at a healthy pace, with developments on Mare Island in Vallejo, a new Kaiser hospital in Vacaville, revitalization in Suisun City, and a future Genentech research facility in Dixon, just to name a few.
Solano EDC president Mike Ammann agreed, saying developments like those at Genentech and Touro University in Vallejo were the key to a strong economy in the future.
"It's really the best of times," he said. "These research deals are huge to us."
Speaker Jim Shepherd, of Cornish & Carey, discussed the retail side of the commercial real estate market in the area, outlining several ongoing and future projects, including the Nut Tree Village in Vacaville, Green Valley Corporate Park in Fairfield, the future Home Depot in Dixon, Northgate Marketplace in Vallejo and the Rose Center in Benicia.
Shepherd said things are going well in the market, with one of the only problems being the rise in construction costs - up 40 percent since 2004 according to Shepherd.
"We are definitely experiencing bumps in the building costs," he said.
Speaker Ron Vyse, of Wells Fargo Commercial Banking Group, discussed real estate financing, saying he expected short-term interest rates to be flat through the first quarter of 2008, with long-term rates possibly going up.
Vyse said Solano County is "a gem," and said locals should expect to see more businesses moving in from the Bay Area.
There was little talk of the housing market at the event. But speaker Jose McNeill, of McNeill Real Estate, said after the event that the problems in the housing market all over California are serious.
"It's going to be a very tough thing," he said, particularly for those dealing with foreclosures, who will still have to pay taxes on the debt that is forgiven.
"That's the next shoe to drop," McNeill said. "People will declare bankruptcy because they can't pay off that debt. It's going to take a while for Solano County and the state as a whole to recover."
At the same time, McNeill said many people are still moving into California, which will lead to home prices stabilizing soon.
Shelly Meron can be reached at email@example.com.
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