Construction may fall sharply in the Silicon Valley.

Grubb & Ellis Co., a San Francisco-based real estate broker and developer, predicted a 60% reduction in large construction projects this year in Santa Clara County because of the recession in the electronics industry. The firm forecast only 7 million to 9 million square feet of major real estate development, compared to a record high last year of 16.65 million square feet. "It was a fantastic year in 1984, but it's going to be a dramatic slump in 1985," said Grubb & Ellis spokesman Thomas Hayes.

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