November 9, 2011
Everybody is expecting to get $6-7 NNN rents in Palo Alto, and 4 and even 5 in Mountain View. But I fear the party will slowly becoming to a halt soon. Investors are once again beginning to drink the Kool-Aid that this is somehow sustainable. It isn’t and if rent levels on the Peninsula are any indication if we’ve reached a top historically, then we’re pretty close. Most of the mega-deals are done (with the exception of Apple which is still working on some in Sunnyvale), investment yields most likely have bottomed, Europe is nuts, and even our own startup community is beginning to run thin on good ideas.
Once people stop seeing the upside, things start to go down, and that’s where we just might be today.
- None Found