Now when we are faced with $5.00/gallon gasoline the entire population has gone into a tiz.  Truck and SUV sales are down preciptiously, fewer cars are on the road, airplanes charge for everything and just for good measure they don’t even feed you anymore.  People are even passing up their gourmet Latte in the morning.

As though that isn’t enough, experts are now talking about $7,00/gallon prices on gas as soon as the end of 2008.  Who knows what other draconian cut backs the American population is going to come up with.  One commentator suggested that we could stop visiting friends and family that don’t live within a short hike from us.  In other words, get to know your neighbors better and ditch those old friends of yours  that you only trade visits with once or twice a year. Who needs them anyway?  In fact is you can throw out a relative or 2, so much the better.

How will all this affect the real estate market?  Well location location location will once again become a serious mantra for buyers.  This time around a good location will be one in a village type setting where one can walk or ride their bike to work, shop and go out to dinner.  Mixed use projects may well have come unto their own.

Failing being able to walk to work, those commercial properties that are at least close to substantial housing will  become much more valuable.  Those industrial buildings close to the actual workers instead of the boss will be very much sought after.  Retailers that have websites that allow online ordering that can be delivered may be the next wave of successful operators.

Southern California freeways may actually unclog.  Unfortunately we have quite limited rail capacity at this time but maybe our political leaders will focus on moving people between cities and within cities at the times they need to move not just perceived peak travel times.

The times are really changing quickly.  It’s still too early to say exactly where we are going in real estate. But is seem likely very desirable locations such as Orange County will be become even more desirable and costly.  Before you dump the family and old friends you may want to see where all this will shake out. 

Now imagine your surprise to receive an email with 50 choices on it. How can that be? You only want to be in top notch buildings and only within a mile of the airport. 50 Choices???? That’s absurd.

Absurd? Maybe. True? Definitely.

What happened to all the office tenants? That my friend is the big question these days. Office building owners are giving bonuses to brokers to do a lease, they are giving bonuses to tenants to do a lease and they are giving bonuses to existing tenants to not opt out of their lease.

I know that officials in the Federal Government are loath to use the word recession but an awful lot of ordinary people think we’re in one now. Office tenants seem very fearful of making a move in case business gets worse than it is.

Interestingly this makes for a very good time for a tenant to cut a great deal for the next few years. However, it is precisely at times like these that most people opt to do nothing out of fear. In many cases it’s an irrational fear but in many other cases the fear is justified.

Us, commercial brokers and office building owners may be looking for tenants in all the wrong places but so far no one has told us where the right places are. Any one who knows of these places please feel free to share.

For more information about Orange County Office market see this article in National Real Estate Investor online edition