Real Estate Principals Lunch Series Debuts in San Francisco

February 22, 2019

By Gautham Deshpande

A central focus of EisnerAmper’s Real Estate Services Group is bringing industry professionals together to foster relationships, facilitate deal flow, and encourage the exchange of marketplace intelligence and insight. With that mission in mind, the Real Estate Principals Lunch Series, co-hosted by EisnerAmper and the Bay Area Council, kicked off on January 25, 2019, with an economic forecast by Patrick Kallerman, Research Director at the Bay Area Council. (Read the full conversation here.)

Patrick began his presentation by acknowledging that 2018 was a great year for the Bay Area economically—and things could be even better in 2019. His cover slide, “2019: Best Year Ever?” was followed by a number of informative graphs that depicted trends and framed expectations for the year ahead. Key takeaways from the presentation include:

  • The Bay Area is a global economic success model. In fact, if it were a country, the Bay Area would be the 18th largest economy in the world, with a GDP of $838 billion. It also leads in GDP growth domestically and has significantly outperformed similarly positioned metros over the last five years. The Bay Area population continues to be one of the most educated in the U.S.
  • Only four states have an economy larger than the Bay Area’s. High-tech sectors provide a boost to productivity that benefits the Bay Area, and it attracts much of the nation’s venture capital investment, with deal sizes continuing to grow. The Bay Area has strong industry diversification across its top performing companies compared to other U.S. economic hubs. Five privately held Bay Area companies have valuations close to or more than $10B.
  • The Bay Area does face challenges, however, and in the short term trade appears threatened by the impacts of the U.S.-China trade war. Light-weight vehicle sales – often an indicator of economic confidence – remain strong but have leveled off. Traffic is highly correlated to economic activity, and San Francisco congestion is the third worst among U.S. cities. Net domestic migration to and from the Bay Area has trended downward.
  • Home prices have spiked across the Bay Area since the recession. And while the Bay Area builds fewer homes than other similar metros, its rental units are among the most expensive in the country.
  • Federal Open Market Committee members predict interest rates to rise slightly less than they did at their last meeting, settling at 2.75% long term. Finally, the International Monetary Fund estimates the world economy will level out, and growth in advanced economies will begin to slow.

The Real Estate Principals Lunch Series will feature different thought leaders throughout the year who will address timely topics that are impacting the real estate industry as well as give business leaders the opportunity to network with others in their field who are developing common (and uncommon) solutions to the challenges they face.

The next real estate luncheon will cover Qualified Opportunity Zones (QOZs).

About Gautham Deshpande

Mr. Deshpande practice focuses on financial services, including audits of hedge funds, private equity and venture capital funds, commodity pools, real estate partnerships and REITS, alternate investment vehicles, and investment advisors.

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