Dot-Com Slowdown Hurts Bay Area Real Estate

"The dot-com downturn is starting to hit the real estate market in the San Francisco Bay Area, leading to higher vacancy rates and declining commercial rents, according to a new study.Released Tuesday by real estate firm Cushman & Wakefield, the study projects that vacancy rates in California's Silicon Valley and in the dot-com inundated areas of San Francisco will jump to about 20 percent by 2002. Meanwhile, the study projects that commercial rents will fall by more than 20 percent in both Silicon Valley and parts of San Francisco by 2004 from their peaks of last fall.The study blames the rise in vacancies and the fall in rents in part on the shrinking work forces of dot-com and technology companies. Additionally, developers looking to cash in on the now-past dot-com boom are building dozens of office buildings in the area that will open during the next three years."