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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: dfloydr who wrote (14665)	10/19/1998 5:07:00 PM
From: BelowTheCrowd	Respond to of 18691

Floyd, As I've suggested elsewhere, I have a nasty feeling that this is going to hit in Silicon Valley and be a lot nastier than many people suspect. In the past year, my apartment complex has gone from virtual 0% vacancy to somewhere in the 5-10% range. They're still trying to increase rents for existing (stupid) tenants, but the "off the street" rate is lower. And they're still building more next door. Commercial isn't quite like that, but I know of several companies which have built more than they need right now. Intel just added a new building which far exceeds their current needs, but is probably justified in terms of building a single large project once, rather than a small one today and more small ones in the future. HP is just completing a new building at one of our sites, while laying people off just a few miles away. Ultimately the result is probably going to be consolidation out of "temporary" leased space, all this with more space going up as fast as they can build it. As I've noted elsewhere, I've heard quite reliably that the venture capital folks are feeling the pinch from illiquidity and the hedge fund disasters. Simply put, risk capital is disappearing fast. VCs live on many of the same sources of equity as hedge fund managers. Look for much more judicious use of capital and less crazed IPOs by anything with "Internet" in the business description. And when it's all over, housing prices may actually drop to merely "expensive" from "outrageous"... mg