[caption id="attachment_50679" align="alignright" width="180" caption="Al Coppin"][/caption]

In the fourth quarter, U.S. gross national product has been revised upward to 2.8 percent -- not great but better than the 2 percent GNP growth rates of the previous two quarters. Are we pulling out or falling back? What does either mean for the North Bay?

We still have not had the kick up in employment that signals new job growth has brought in new entrants to the market. However, the Palo Alto-Santa Clara job market has reported one of the best employment rates in the country. Also, San Francisco's South of Market district is exploding with new major leases, and leasing rates rising 46 percent in one year.

While the national investment market for office buildings at the institutional level increased by 37 percent last year, private capital investment has not rebounded at the same rate. What we have is a bifurcated market, one for institutional investments and one for private capital.

So what is our forecast for commercial property leasing and sales for the North Bay in 2012? I’d say more of the same spotty market conditions. We have had new corporate startups in 2011, so leasing of class A office space has been good, but the real economic bellwether -- leasing of “B” space -- is just beginning.

Local commercial lenders are back in the market with loans in the 5 percent and 6 percent interest-rate region. With increasing leasing and bottom-of-the-trough pricing, real estate investments are a good choice today.

While companies and owners looking for a long-term home for their business snapped up the bargains available through institutional and lender wholesales of property, investors are only beginning to take advantage of leased-up buildings and the lowest loan constants in 40 years.

We also believe that the Main Street businesses will gradually come back, tired of waiting on the sidelines to see what’s happening to the economy. They will increasingly expand, consolidate, move and add new locations.

While some economists are predicting that first-quarter GNP is at risk of not rising at 2.8 percent, others see positive signs on the horizon.

We feel the latter will happen in the North Bay. The industries projected for job growth are all located here: health care, technology, medical devices, telecommunications and alternative energy.

The expansion pressure of the South Bay tech companies and explosive growth of San Francisco social-networking companies will continue to keep real estate values and growth in the North Bay on an upward slope.