3-30-12

Mid Atlantic Real Estate Journal — Commercial Office Spotlight — March 30 - April 12, 2012 — 9B NAI E MORY H ILL

www.marejournal.com

By David R. Morrison, NAI Emory Hill In this economy, facing reality is the only way to go (Has served NAI Emory Hill & their clients well)

means available to perform the job we are hired to do by our clients. I learned a long time ago that there is not much we can do about the market and the economy in general. Success in any market, including this one, will be determined by how well we understand the current situation and how well we respond as we man- age our business of serving our clients. David R. Morrison, is an agent for NAI Emory Hill in New Castle, DE. ■

eople often ask me about my thoughts on commercial real

of up to 40%, difficulty in obtaining refinancing, and the large and looming default

uncertainty about when full recovery will occur and that this cycle probably has more

When people ask how and why Emory Hill continues to do well, I tell them: we understand the fundamen- tals of our market including realistic rental rates and val- ues from the Owner, Buyer or Tenant perspective; we are realistic with regard to projections and expectations - as being anything less is not only a disservice to the client but a tremendous waste of time; and we are a full service company offering brokerage, construction, property man- agement and maintenance services and therefore use all

estate and what’s go- i ng on i n the market. My u s u a l response is that “condi- tions seem to be gener- ally improv-

Success in any market, including this one, will be determined by how well we understand the current situation and howwell we respond as we manage our business of serving our clients.

David Morrison

ing and that we expect a slow but steady recovery in rental rates and demand for space.” I tell themNAI Emory Hill is doing well and that we are all very busy. This is accurate from my perspective and it usually satisfies most people. But for those interested in really spending the time thinking about all the topics, issues, and history that im- pact commercial real estate now and into the foreseeable future, read on! Further explanation of the market would include, but not be limited to, discussions of Office Market Cycles and the fact that most markets are moving towards a recov- ery phase or at least nearing the bottom of the recession phase. Our local market conditions indicate we are beyond recession and mov- ing into recovery with posi- tive absorption expected for Q1 2012. We will eventually work our way from recovery into expansion at some point down the road! That might be hard to believe, but it will happen. The big question of course is “When?” “Market Cycles” would certainly be an easy way to explain our current situa- tion. It holds true over time in terms of market phases, but we have a lot more on our plate this time around that will impact the dura- tion of the cycle, and this is creating havoc along the way for some office properties. Economic concerns includ- ing unemployment with its related lack of demand for space, the very slow burn off of housing inventories that stifles demand for new prod- uct and subleased space are just a few issues impacting recovery. Uncertainty around politics, taxes, regulations, and the US and foreign debt situations are not helping either. Factor in decreases in commercial property values

bubble into 2017 … and let’s just say there is still some

challenges than we have faced with past recoveries.

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