& Forecast 66th
of Property Group Partners, painted it in
more qualitative terms: “What we saw in
New York and Washington, DC was that
anyone who didn’t have to make a decision
didn’t.” This was reflected in the office mar-
ket as follows: Growth in the first half, dis-
ruption in the middle and a comeback
starting in Q4—a comeback that’s likely to
continue in 2012, as long as macro factors
don’t throw a curveball at the issue.
but otherwise, “day-to-day leasing has been
sluggish so far,” he comments.
There are, however, some good-news
indicators that could boost rents and occupancy. One of those, Muoio points out, is
the lack of new supply, which should continue in 2012. “No one’s crazy enough to be
developing; no lenders are out there giving
financing to develop office products yet,”
he comments. If the economy continues to
gain steam as it’s predicted, he adds, office
jobs, absorption and rents will increase.
But—and there is a “but” here—there is
still Greece and Europe. There is Israel
and Iran and the Straits of Hormuz.
There’s also Washington, DC. “I don’t see
a lot of economic downturn, but I don’t
see a lot of upward movement either,
because it’s an election year,” comments
Boyd Zoccola, chair and chief elected officer with the Building Owners and
Managers Association International.
“There’s uncertainty with healthcare,
banking regulations and taxation.
Companies are as productive as they’ve
been, but they don’t know the right strategy because they’re not certain of the
ground rules.”—Amy Wolff Sorter
INDUSTRIAL: A Nationwide Uptick
If you turn on the television or listen to the
radio, you’re most likely to hear that the
economy is in the doldrums and the sky is
falling. But if you talk to industrial real
estate experts, the story is much different.
“In 2011, the industrial landscape was great,
in regards to fundamentals,” says Jim Dieter,
executive vice president with Cushman &
Wakefield. “We’re cautiously optimistic
about everything in 2012.”
Dieter has reason to be excited; accord-
ing to C&W reports, 2011 saw about 415
million square feet being leased nationally,
up from 350 million in 2010. Though the
national vacancy rate dropped only
slightly—from 10.8% to 10%—“literally
almost every single market reported a drop
in their vacancy rates,” Dieter says.
In the area of investment, Josh McArtor,
a senior vice president in CBRE’s institutional group, says investments were going
full-tilt at least until July 2011, during which
macroeconomic factors took over. But look
for that to change in 2012.
A lack of speculative development for
several years means “we’ve run through a
60 REAL ESTATE FORUM FEBRUARY/MARCH 2012