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Release Date
Feb, 5 2007

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Annual Commercial Real Estate Investors Forum
Looks at Valley's Growth Potential
By John Hussar

INDIAN WELLS (Calif.) - The Coachella Valley's overall commercial real estate market is positioning for another upswing for the next five to 10 years despite a growing vacancy rate for new office space that is surpassing current demand.

That's the snapshot analysis of the 5th Annual Commercial Real Estate Investor Forum, sponsored by the Desert Area Commercial Information Exchange.

Some 520 real estate professionals, investors and the public from the Coachella Valley and throughout Southern California took notes on the valley's most informative overview of the office, industrial, hotel, land and apartment real estate market at the Hyatt Grand Champion Resort and Spa in Indian Wells.

"This was our best forum ever in terms of the turnout and participation by all the top commercial real estate brokers in the valley who really got into the specifics of what are the top deals and what are the prices,'' said Rob Firth, co-chair of the Forum and a broker with Coldwell Banker Commercial/Lyle and Associates. "We are looking to sponsor another forum next year about the same time."

Forum Emcee Peggy Sue Lane, vice president of Stewart Title Insurance in Palm Desert, said the valley's commercial real estate brokers, investors and real estate related professionals are "a bunch of marathoners" who are forging ahead closing successful deals, fueling optimism the commercial market is healthy.

Panel discussions, featuring the Coachella Valley's most knowledgeable commercial real estate brokers, provided real-time insights about land investments, industrial, retail, office and residential real estate trends and commercial investment opportunities.

While the desert's normal office space market vacancy rate is about 10 percent, many brokers said there is simply too much office space sitting vacant or about to be built to attract new renters or buyers. "I think right now we've got too much (office) product coming online," said Thom Gottberg, vice president with CB Richard Ellis in Indian Wells.

Gottberg urged developers and investors to hold off on building more office units until the market stabilizes.

Today's vacancy rate is as high as 30 percent in Rancho Mirage and 21.5 percent in Palm Desert, according to CB Richard Ellis estimates.

"Given the lengthy lead time in developing real estate, it is not unusual for there to be temporary imbalances between supply and demand," Firth said. "Long term population trends still bode well for the future of the market."

Industrial development is also softening somewhat, according to desert brokers, primarily because of the slowing residential market.

Noel Ramos, senior vice president of Wilson Johnson Commercial Real Estate in Palm Desert, said some industrial tenants who were tied to the home construction boom of the past few years, are consolidating operations or remaining cautious about expanding to the new industrial space coming online.

Land purchases for office, retail, commercial, etc continued strong last year. Susan Harvey, principal with Desert Pacific Properties in Palm Desert, said there were more than $3 billion in land transactions valley wide in 2005.

Harvey, Ramos and Gottberg were among the key speakers on various expert panels. The panels:

• Land:Susan Harvey of Desert Pacific Properties; Dick Baxley of Baxley Properties
• Industrial/ Office: Bob Young, Coldwell Banker Commercial/Lyle and Associates; Noel Ramos, Wilson Johnson; Polo Doria, Industrial West; Thom Gottberg, CB Richard Ellis
• Retail: Maggie Montez, CB Richard Ellis; Curtis Barlow, Coldwell Banker Commercial/Lyle and Associates; Margie Taft, Taft and Associates
• Hotels/Apartments: Cameron Hall, Sperry Van Ness, apartments; Char Sharp, Sperry Van Ness, hotels

The presenting sponsor was California Bank and Trust and co-sponsors were Palm Desert National Bank, Washington Mutual, Wilson Johnson Commercial Real Estate, Asset Preservation, Baxley Properties, CB Richard Ellis, CB/Lyle and Associates, Canyon National Bank, Desert Pacific Properties, Stewart Title, 1st Centennial Bank Land America, Developer Services, Smith Consulting, Sperry Van Ness, Dyson & Dyson, Baddour & Associates, LandAmerica Commercial Services, Quantum Financial Network and Lee & Associates, Commercial Real Estate Services. City Sponsors include Coachella, Palm Desert and Palm Springs.

The Desert Area Commercial Information Exchange has 250 members, including commercial real estate brokers and real estate industry associate members.

For additional information, please call Firth at (760) 772-6400, Ext. 230 or visit online at www.desertareacie.com