Tulsa World: Slump in commercial real estate stubborn

MAKE US YOUR HOMEPAGE | Sunday, November 22, 2009 | WIRELESS

Home > Business

Newspaper View Print this story

Comment

RSS

Bookmark

Slump in commercial real estate stubborn
A conference focuses on industrial, office and retail properties.

By ROBERT EVATT World Staff Writer
Published: 11/6/2009 2:22 AM
Last Modified: 11/6/2009 5:37 AM

Commercial real estate's future looks rocky amid tightened lending, dropping property values and huge numbers of loans due soon for renewal, said Brooks Wells, director of research for RREEF, the global alternative investment management arm of Deutsche Bank's Asset Management division.

"There's a lot of money sitting on the sidelines," Wells said Thursday during a presentation at the Southern Hills Marriott. "We think 2010 will start to see an uptick, though value won't come back for a year."

Tulsa's commercial real estate may fare better, he said, predicting the area will outperform the rest of the nation.

Wells' remarks came during the 2009 Tulsa Trends conference, the annual commercial real estate event organized by the Tulsa chapter of the National Association of Industrial and Office Properties.

Different types of commercial properties are tied to economic indicators in different ways, Wells said. Industrial properties aren't as dependent on job growth, so that sector hasn't taken a bad hit. Tulsa's industrial properties are especially well positioned in the recession, he said, as supplies are matching demand and vacancies are below the national average.

But office space is especially dependent on jobs, and so vacancies in that sector may remain high through 2012, he said. Tulsa's vacancies match the nation's.

Retail spaces are between office and industrial in terms of dependence on jobs, though Wells said the continued development of new retail buildings in Tulsa may

keep local vacancies high.

Though Wells said he's optimistic for a recovery in 2011, he said the specter of inflation or deflation, a struggling bond market and the durability of the recovery could complicate the economic situation.

Herb Krumsick, senior vice president of J.P. Weigand & Sons Inc. in Wichita, also spoke.

He said the economic problems in real estate began in 2001. Former Federal Reserve Chairman Alan Greenspan encouraged low interest rates, which both

delayed and worsened the current recession, Krumsick said. Krumsick estimated that the economic recovery, as well as the commercial real estate recovery, will be delayed as a rapidly changing economy and fear keep nervous investors out of the market.

"The lenders and the buyers will be very conservative until we've hit the bottom of the market," he said.

Robert Evatt 581-8447
robert.evatt@tulsaworld.com By ROBERT EVATT World Staff Writer

Newspaper View Print this story

Comment

RSS

Bookmark

Reader Comments

Show: Most Recent Comment First

Add your comment

2 comments have been made on this story so far. Tell us what you think below!

Reporting Comments

If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you. -- Web Editor Jason Collington

Some reader comments for this story were copied from "Commercial real estate poised to plunge," which was published on 11/5/2009.

	Report Comment Gramps, (11/10/2009 6:54:25 AM) Instead of building factories to give Americans jobs...they built warehouses and shopping centers to stock and sell Chinese crap. America is racing to the bottom and there will be no place to hide for rich or poor.
	Report Comment 007, Tulsa (11/5/2009 10:31:21 PM) “The lenders and the buyers will be very conservative until we’ve hit the bottom of the market,” yeah, and they are called republicans...the one's who brought us here!

Add Your Comment
In order to post a comment on this article, you must sign in to Tulsaworld.com. If you do not have a site account, you can create an account for free.