From our perspective, 2003 brings unique opportunities and challenges. The prospect of large-scale military action -- possibly on two fronts -- coupled with major disruptions inflicted on our citizens and assets by a miniscule number of committed terrorists, sets the stage for a difficult year. Other wild cards in our deck include: cutbacks in corporate spending; severe deficits in governmental budgets; crumbling infrastructure; potential water shortage; rising costs for insurance, utilities, permits, fees and education; and the ubiquitous, litigation and taxes.

Chuck Wise

We start 2003 with the comforting knowledge that our capital gain on sales greater than $100,000 is subject to 3 1/3 percent CAL-FIRPTA withholding on the total sales price, effectively transferring control of the potentially taxable funds to the state government immediately at close of escrow.

The good news is that San Diego real estate, particularly residential, has become a national anomaly in price growth. Multifamily offerings, large and small, are trading in the low $100,000s per unit without much regard for age or location. For those investors who do have regard for age and location, the price tag climbs closer to $200,000 per unit, and even these are scarce.

With gross rent multipliers shooting into double digits and cap rates low enough to make a passbook blush, the engine driving this bus is equity growth. Without the cushion of inflating equity, most recent San Diego real estate investments would not be viable.

Local economists and pundits point to a rental housing shortage, exacerbated by a lack of zoned and entitled land for new construction and increasing demand, which will remain into the near future. Low interest rates are creating a new generation of homeowner, scrambling to catch the lowest rung of the landlord ladder as condo conversions remove units from the rental pool.

Buyers are forced into a speculative position with cash flows and even intrinsic values pushed aside in order to capture a deal. Multifamily listings are being "flipped" for 10 percent to 20 percent premiums to investors needing an up-leg in an exchange.

The underlying power behind this market, however, is the sheer force of the "herd mentality" in which nothing is done in a vacuum and every sale is a race to the finish. In this age of rapid delivery of data that affect investment risk, lenders are becoming more conservative, forcing investors to absorb more risk by bringing more cash to the closing table.

Real estate cycles seldom end gently, and when the herd changes momentum, the last one out turns off the lights because the party is over. It, therefore, becomes particularly important to stay tuned in to the forces that would alter our course. CCIM San Diego is committed in 2003 to educating and connecting commercial and investment real estate professionals to meet the challenge ahead.

The five Cs of CCIM

In navigating the current complicated investment market, it is more important than ever to include a CCIM on your team. The five "Cs" of the CCIM are:

* Certified - Each CCIM has completed 200 classroom hours of specialized training, in addition to having a resume approved by a council of peers and passing a rigorous written exam;

* Connected - The CCIM network includes strategic alliance with other professionals to deliver complete choices and options in making critical investment decisions;

* Convenient - Internet delivery of available properties, demographic information, aerial photos, consumer profiles, title information, legal recordings and interactive exchange of information in "real time";

* Competent - Each CCIM is skilled and experienced in commercial and investment real estate and brings a track record of success to the table;

* Care - A CCIM adheres to the highest level of ethical practice set forth by the National Association of Realtors and is invested in the successful outcome of each assignment.

CCIM designees are available in each commercial and investment discipline including finance, brokerage, property management, asset management, development, consulting and appraisal. Specialists in each geographic area and specialty can be searched and located on the Internet at www.ccim.com, or contact Helen Bloomfield, CCIM San Diego Chapter administrator, at (858) 366-0379.

Annual Perspective and Prognosis 2003

On Feb. 13, CCIM San Diego is pleased to present our annual "Perspective and Prognosis 2003." Reo Carr, editor in chief of the San Diego Daily Transcript will moderate an exciting and timely program featuring Jim Young, president of the Jameson Group and co-founder of Realcomm, and a panel of San Diego commercial real estate investors and developers, including Louis Kuntz of The Morgan Group, Matt Root of the Shidler Group and Matt Spathas of Sentre Partners.

The program will begin at 7:30 a.m. at the La Jolla (UTC) Marriott with a live Internet demonstration of the CCIM Site to do Business, CCIM San Diego Web site and related Internet links guaranteed increase productivity and profit.

President Elect Chuck Wasker, CCIM, and I attended the leadership training session in New Orleans in November and brought back a greater sense of the support and benefits provided by CIREA in Chicago. The most exciting new services are delivered online through the Site to do Business, with all designees and candidates having access to advanced demographic information, satellite photography, customized client reports (including crime reports and mosaic profile of neighborhood consumer classification) and an online deal management system that allows interaction with lenders, escrow, attorneys, clients and principals with the CCIM acting as gatekeeper to coordinate access and maintain privacy.

New chapter Web sites have been developed to maintain consistency and deliver local content. Each designee has the option of linking a Web page with customized information to CCIMnet.com, the venue for sale and lease listings. There are more services being planned on a national level, and we will make it a priority to help designees and candidates increase income through these new tools and networking opportunities.

I would like to welcome five new CCIMs, who received their pins in New Orleans: Zack Jacobs, CCIM, of IPC Commercial; Kathryn Pippen, CCIM, CPM, of LaSalle Investment Partners; Robert Griswold, CCIM, CPM, CRE of Griswold Real Estate Management and radio commentator on "Real Estate Today"; Ron Beck, CCIM, of Colliers International and Masaru Yokomizo, CCIM, of Mitsui Real Estate.

We are happy to have new chapter members working at a high level in our industry and also willing to share their experience with our chapter.

The next CCIM exam is in Washington, D.C., in April. Candidates, be sure to join the San Diego Chapter and take advantage of candidate guidance, local networking and other benefits.

Wise, CCIM, is president of CCIM San Diego, president of Wise Investment Properties Inc. and senior vice president of IPC Commercial in Carlsbad.