Majority Believe Middle Tennessee Commercial Real Estate Climate is Improving
Elections weigh heavy on the minds of Middle Tennessee’s commercial real estate community
Nashville, TN, January 28, 2012 --(PR.com)-- When asked to describe the best thing that could happen in 2012 to strengthen Middle Tennessee’s commercial real estate market, 29 percent of local industry insiders replied that the election of new, business-friendly government leaders would make the most impact on the local commercial real estate climate.
That’s 10 percent more than the second most cited item on responders’ wish lists: jobs, jobs, jobs.
The upcoming elections weighed heavily on the minds of respondents throughout the 2nd Annual 2012 Middle Tennessee Commercial Real Estate Survey conducted by Nashville-based commercial real estate and design services company, Southeast Venture, LLC.
Seventy-nine commercial real estate brokers, developers, building owners and investors took the survey, which gauged expectations about local sales, leasing and sector activity in 2012.
Sixty-four percent of respondents believe that sales of Middle Tennessee commercial real estate will be better or much better in 2012. That’s down from 87 percent of survey takers last year. Thirty-two percent expect sales to be stagnant in 2012 compared to 2011.
The election was the primary reason behind the sales outlook, with 17 percent of responders citing concerns about the elections. “The elections are bringing some hope that there will indeed be positive change for businesses and in turn an increase in jobs,” one responder wrote. “I know a lot of owners that are sitting on capital until they know the outcome of the election,” another added.
Other factors in the sales outlook included an easing in restrictions on lending and financing, the slowly improving economy and increased activity in the pipeline.
“When we surveyed our local commercial real estate community last year, a loosening of lending and financing policies was the top reason cited for the optimistic sales outlook,” said Todd Alexander, principal at Southeast Venture. “The same is essentially true this year, but the elections are clouding the outlook. We won’t know until the elections are over whether the local market will be worse or better off.”
Commercial leasing polled better than sales, with 74 percent of responders indicating that leasing will be better or much better than last year. Twenty-three percent claimed no change, and four percent expect leasing to be worse or much worse this year.
Confidence in the improving economy and increased activity in the pipeline topped the reasons for an improved leasing environment, as well as an improving jobs market.
On the other side of the argument, current low vacancy rates have 13 percent of responders believing that leasing cannot get any better. “There is less space, so activity will be better, but leasing may fall short due to a lack of supply,” one responder explained.
The elections, whether good or bad, factored into nine percent of respondents’ leasing considerations.
Multi-family topped the list of commercial real estate sectors, with 79 percent of responders predicting that the multi-family sector will perform better or much better in 2012 than last year. The office and retail sectors were also viewed favorably, with 66 and 58 percent expecting better or much better performances in 2012, respectively.
Commercial real estate insiders are least optimistic about the land and industrial sectors, with eight and seven percent, respectively, of responders banking on a worse performance in 2012 compared to 2011.
“When compared to other sectors, the outlook for land sales looks a bit less promising, but when put into the context of last year’s survey, optimism appears to be rising slightly in this sector,” Alexander said. “Last year, only 24 percent of survey takers felt that the land sector would perform better or much better than 2010. This year, that statistic has jumped 13 percent to 37.”
A majority (56 percent) of responders believe that the real estate-owned (REO) sector will remain constant in 2012.
“Overall Middle Tennessee’s commercial real estate market is on the right track,” said Wood Caldwell, principal at Southeast Venture. “We’re seeing multi-family pick up, and many people within the industry are seeing more come through the pipeline. If we can get a few stalled and new large development projects off the ground in 2012, it should be a good year.”
Founded in 1981, Southeast Venture is a diversified commercial real estate and design services company guided by a mission of “Building Value by Valuing Relationships.” The firm provides and coordinates the delivery of real estate, development and design services. This unique, comprehensive approach to commercial real estate offers a cost effective and efficient way of meeting its clients’ commercial real estate needs. For more information contact, www.SoutheastVenture.com
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That’s 10 percent more than the second most cited item on responders’ wish lists: jobs, jobs, jobs.
The upcoming elections weighed heavily on the minds of respondents throughout the 2nd Annual 2012 Middle Tennessee Commercial Real Estate Survey conducted by Nashville-based commercial real estate and design services company, Southeast Venture, LLC.
Seventy-nine commercial real estate brokers, developers, building owners and investors took the survey, which gauged expectations about local sales, leasing and sector activity in 2012.
Sixty-four percent of respondents believe that sales of Middle Tennessee commercial real estate will be better or much better in 2012. That’s down from 87 percent of survey takers last year. Thirty-two percent expect sales to be stagnant in 2012 compared to 2011.
The election was the primary reason behind the sales outlook, with 17 percent of responders citing concerns about the elections. “The elections are bringing some hope that there will indeed be positive change for businesses and in turn an increase in jobs,” one responder wrote. “I know a lot of owners that are sitting on capital until they know the outcome of the election,” another added.
Other factors in the sales outlook included an easing in restrictions on lending and financing, the slowly improving economy and increased activity in the pipeline.
“When we surveyed our local commercial real estate community last year, a loosening of lending and financing policies was the top reason cited for the optimistic sales outlook,” said Todd Alexander, principal at Southeast Venture. “The same is essentially true this year, but the elections are clouding the outlook. We won’t know until the elections are over whether the local market will be worse or better off.”
Commercial leasing polled better than sales, with 74 percent of responders indicating that leasing will be better or much better than last year. Twenty-three percent claimed no change, and four percent expect leasing to be worse or much worse this year.
Confidence in the improving economy and increased activity in the pipeline topped the reasons for an improved leasing environment, as well as an improving jobs market.
On the other side of the argument, current low vacancy rates have 13 percent of responders believing that leasing cannot get any better. “There is less space, so activity will be better, but leasing may fall short due to a lack of supply,” one responder explained.
The elections, whether good or bad, factored into nine percent of respondents’ leasing considerations.
Multi-family topped the list of commercial real estate sectors, with 79 percent of responders predicting that the multi-family sector will perform better or much better in 2012 than last year. The office and retail sectors were also viewed favorably, with 66 and 58 percent expecting better or much better performances in 2012, respectively.
Commercial real estate insiders are least optimistic about the land and industrial sectors, with eight and seven percent, respectively, of responders banking on a worse performance in 2012 compared to 2011.
“When compared to other sectors, the outlook for land sales looks a bit less promising, but when put into the context of last year’s survey, optimism appears to be rising slightly in this sector,” Alexander said. “Last year, only 24 percent of survey takers felt that the land sector would perform better or much better than 2010. This year, that statistic has jumped 13 percent to 37.”
A majority (56 percent) of responders believe that the real estate-owned (REO) sector will remain constant in 2012.
“Overall Middle Tennessee’s commercial real estate market is on the right track,” said Wood Caldwell, principal at Southeast Venture. “We’re seeing multi-family pick up, and many people within the industry are seeing more come through the pipeline. If we can get a few stalled and new large development projects off the ground in 2012, it should be a good year.”
Founded in 1981, Southeast Venture is a diversified commercial real estate and design services company guided by a mission of “Building Value by Valuing Relationships.” The firm provides and coordinates the delivery of real estate, development and design services. This unique, comprehensive approach to commercial real estate offers a cost effective and efficient way of meeting its clients’ commercial real estate needs. For more information contact, www.SoutheastVenture.com
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Southeast Venture
Erin Gagnon
615 250 8672
www.southeastventure.com
Erin Gagnon
615 250 8672
www.southeastventure.com
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