5 questions with Monty Berry
BY ROBERT EVATT World Staff Writer
Friday, July 20, 2012
7/20/12 at 3:32 AM
Monty Berry, a partner with NAI Commercial Properties, has been active as a commercial real estate broker in Tulsa since 1987.
1: How does the current state of the Tulsa commercial real estate market compare to the national market?
Tulsa's commercial real estate market and economic measures by some accounts are healthier and more stable compared to the national market. Painful lessons from the oil bust in the '80s have ensured a return to a more balanced market and banking fundamentals, and diversity in our local economy. With Tulsa's fortunes inexorably tied to the oil and gas industry, we have slowly - and not without hiccups - navigated through difficult economic conditions that continue to impact our nation's larger markets.
Tulsa has experienced stronger leasing activity and positive absorption over the first two quarters of 2012 in all sectors, particularly manufacturing - energy related - that has helped reduce overall market vacancy percentages to near pre-recession levels of 2008. However, the current activity level and demand has tapered off the last few months, suggesting the local market still finds similar challenges found in larger markets.
2: Compared to three years ago, are financial institutions providing more or less funding for entities wanting to purchase commercial properties?
Today, banks and credit unions are more active and engaged in making commercial loans available to borrowers in contrast to three years ago. Yet the lending community is facing stiffer underwriting criteria and, in some cases, regulatory oversight. On a more positive side, buyers can find historic low interest rates and reasonable loan terms.
A popular loan for many borrowers or small businesses wanting to buy commercial properties today is the SBA-backed loan. SBA financing has grown significantly over the last few years and proven to be an excellent tool.
3: What is the current level of interest in properties in downtown Tulsa? Are you seeing the potential for more development?
In my 25 years working the Tulsa market, I can't ever recall a more pronounced renewed investment for our Central Business District. Since the completion of the BOK Center, the new construction and projects in the CBD is staggering, considering that most Tulsans had written an obituary for downtown in the early 2000s.
There is and will continue to be interest and opportunities for new development from both local private and public investment.
4: What level of interest are you seeing in terms of new construction on vacant land? Are some sectors seeing more construction potential than others?
Land has become somewhat a four-letter word for most "from the ground" new construction, with associated capital/credit requirements and risk factors sometimes outweighing a new project's viability.
New construction interest on vacant land is credit-driven and limited to mostly owner-occupant and built-to-suit demand, with some exception to well capitalized and pre-leased, large-scale retail projects.
5: What is the current perception of Tulsa you're getting from out-of-state buyers or investors?
Out-of-state investors and buyers have very strong and favorable perceptions of our market and economic climate. My NAI colleague and apartment expert Max Heidenreich, who often guides tours for many out-of-state apartment investors in our city, says these investors always comment about the excellent quality of life and lower cost of living Tulsa offers.
Additionally, our steady growth (appreciation) without significant fluctuations in property values are very attractive to investors who are seeking long-term safety, and usually find the opposite of what they see in many of their respective out-of-state markets.
CORY YOUNG/Tulsa World