& Forecast 66th
throw the US recovery off track. “It’s all
interconnected,” he says. “We live in a global
world today and there are still some head-
winds out there; I don’t know that anybody
today can sit here and say, ‘this is what’s
going to happen exactly.’ We’ll know who
predicted it correctly once we move past it.”
With the industry’s outlook turning grad-
ually sunnier, there are signs of renewed
development momentum. “In multifamily,
there’s clearly activity,” Mechanic says. “In
New York and DC, there are clients who
either have started projects or are closing on
a piece of property. Those deals are clearly
These are the macro forces that are apply-
ing both upward and downward pressure on
the national commercial real estate market.
Now for a look at what they mean for each of
the five main food groups:
dissipated, CMBS shut down and it looked
like the recovery was running out of steam
and going backwards.” Maximus Advisors
outlined the “passive-aggressive recovery”
in its winter 2012 report, pointing out a
continued disappointing recovery and an
employment rate barely above the trough
of more than two years ago. This led to
vacancy rates nationally of about 17.5%
(more or less unchanged year over year)
and office rents only edging up about 25
cents over the prior year, to $22.50 per
square foot at year’s end.
Jeffrey Sussman, founder and president
PRUDENTIAL COMMERCIAL REAL ESTATE
THE “MY SQUARE FOOTAGE
CAN’T KEEP UP WITH MY
OFFICE: Uncertainty Stifles Momentum
On the office side, 2011 started with great
potential. The economy gained momentum as job growth skewed upward and capital markets loosened. Then came summer.
And Europe and the debt ceiling arguments. And CMBS. The result?
“The economy turned tail,” remarks
Peter Muoio, founder and senior principal
of Maximus Advisors. “Job growth generally
Your business is expanding and you’re bursting
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But how do you know whether to buy or lease?
Or what’s the best location for your business?
Prudential Commercial Real Estate can help you
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FEBRUARY/MARCH 2012 REAL ESTATE FORUM 59