[caption id="attachment_70221" align="alignright" width="200"] Al Coppin[/caption]

The projected growth of the national economy looks sluggish at best. Previously forecasted gross national product growth of 2.5 percent is expected to be shaved to fairly bleak growth of 1.0 percent to 1.5 percent. You can’t reduce unemployment without at least 3.5 percent growth.

Having said that, the San Francisco and South Bay Area growth phenomenon in technology and social media is providing unprecedented construction and related economic multiplier effects throughout the region. More than 6 million square feet of space was leased in 2012, and companies are searching for another 7 million to 10 million square feet.

Enthusiasm is spilling over, even into quiet spots in the market like the North Bay. Money is being spent here in wine clubs and hospitality. Eventually, some of those employees will buy houses in the North Bay. That intellectual capital will create companies, some starting in the North Bay or moving here.

Hence, we have the migration of waves of creative energy and people moving from south Bay to north. How do we tap into it? How do we get some of the companies to consider the North Bay? We market our North Bay area to San Francisco and the South Bay. 

Sonoma County’s BEST program has the single biggest opportunity to attract jobs and people here. It is preparing a portfolio of creative marketing pieces aimed at companies, employees and interest groups in those areas.

The commercial real estate brokerage community will do the rest. Team those visionary pieces with specific land and facility opportunities in the North Bay, and we will get our share of tech and social media companies moving north.

We have seen Sonoma County job growth increase by some 8,000 jobs, 2,012 over the tally in 2011. The county has one of the highest growth rates in California and most areas of the nation. This has reduced our unemployment to 7.7 percent in Sonoma County and 5.5 percent in Marin County. So, we are doing pretty well, but we could do better with actual marketing directives from BEST.

Going forward, we see substantial increases in sales of commercial real estate properties as investors realize we are at the trough of the market, with prices on the rise.

Lenders are much more aggressive in commercial property loan offerings. Interest rates of 4.0 percent to 4.5 percent on 25-year loans provide significant positive leverage with low capitalization rates between 7 percent and 8 percent. These loan rates have not been available for 50 years and will probably rise by year end, so we expect investment activity to rise 20 percent this year.

We are forecasting a 1 percentage-point reduction in vacancy rates for office and industrial properties and as much as a 2 percentage-point reduction in retail vacancy rates.