Well, in some markets leakage is more like a gusher. Recently, the San Francisco Business Times (May 23-29, 2003) calculated that owners on average only make about $3 a year over a typical five-year lease term. Here's the math. Average rent: $28.03 (Studley). Average expenses: $15.25 (Grubb & Ellis). Average tenant improvements: $37.50 (Colliers). Average commissions: $10. So over five years, the total incoming is $140.15 and the total outgoing is $123.75. The difference is $3.28 per year -- before debt service. Oops.

OK, I'm grossly oversimplifying. Each deal is unique. But the market sure seems soft. There's that lingo again. So here's the straight talk from Ken Rosen of the Rosen Consulting Group in the most recent issue of the San Francisco Business Times (July 25-31, 2003). Remember Rosen caused a bit of a storm in early 2001 when he boldly predicted that 80% of San Francisco's dot-coms would fold and dump 4 million square feet on the market. (Actually, 95% of dot-coms folded and dumped 7 million square feet on the market.)

Rosen comments on the current San Francisco market, "Net new leasing requires new jobs and we are still losing jobs in the Bay Area. ... Eventually there will be a recovery in our economy and we'll have absorption, but it's probably another year off... So, I think that it's a pipe dream to think that we're about to boom." ... How would you describe your market? Send me your lingo.

--Peter Pike