...Delores Conway, associate professor of statistics and director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate, agrees that the dramatic increases in rents were driven by high purchase prices, but she expects that to stabilize this year as the economy slows. "We are not expecting the large increases in rent as we've seen in the past," Conway says. "We are going to have more stability in rents this year. The reason: the general economy is slowing, which means sales activity is slowing, thus taking some pressure off rents."
In terms of overall economy, she says the subprime fallout in the housing market has affected the office sector, as banks and other financial institutions tighten their lending criteria...