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By JAN LOOMIS, Special to the Daily Transcript
Tuesday, September 10, 2002
The commercial real estate sector, particularly retail shopping centers, seems to have come through the last year with relatively little disruption, reports Bob Lichter, CEO of the Lichter Venture Group.
"We own and manage shopping centers which house many restaurants in San Diego. Initially when 9/11 occurred, some of our restaurant tenants were packed as people came together to find out what was going on and gain some collective comfort," Lichter said. However, his tenants experienced a tremendous drop in business within days as people chose to stay close to home and family.
This was particularly true at his Island@carlsbad center, which is surrounded by a large business population.
"After about 60 days the restaurants recovered and business is now robust in most of our properties," Lichter said.
Shopping centers occupancy has stayed strong and the vacancy factor for his properties has declined to virtually zero.
"In general, office space has seen some increase in vacancy although it is hard to know how much of that was 9/11 and how much was driven by the dot-com bust and the economic downturn," he said.
His colleagues who manage high-rise buildings have had to increase security and logistics, which has stretched budgets. However, according to Lichter, "industrial space is still in demand and leasing rates for multitenant spaces have continued to climb."
Business areas like Kearney Mesa and Miramar have stayed strong, he said.
Lichter believes that one of the most notable effects of 9/11 is that business has become even more risk-adverse than usual.
"Business is concerned that 'another terrorism shoe will drop,' which makes for a very nervous stock market, and expansions are viewed with caution and/or postponed," he said.
Lichter feels that concerns about having more liquidity (cash & stocks) to deal with future shocks has delayed some capital and hiring decisions. He sees this mindset affecting San Diego's economic growth and reflecting the national mood.
"I believe that if there is any silver lining from the horror of 9/11, it is that once again we Americans have become reacquainted with our great resilience both in business and our personal lives."
Loomis is a free-lance writer based in Poway.
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