Uncertain Times Reported at National TCN Convention

Members of TCN Worldwide Real Estate Services, ranked as one of the world’s largest affiliation of independent real estate companies, gathered in New Orleans for their annual National Convention. The news on the commercial real estate market continues to be bleak. All markets reported slow office leasing activity with vacancy rates continuing to rise. Mid to low 20% vacancy figures were the norm in all major and secondary markets.

Most members agreed that part of the reason is that corporate America is on the “sidelines” regarding their office space requirements. Smaller deals involving independent firms averaging 2-3,000 square feet is making up the marketplace.

Herb Agin, Chairman of TCN, indicated that on the positive front independent firms are continuing to show hiring gains of top talent while most major firms are cutting or closing offices in the wake of “budget cutting”. Neil Siderow’s Murray Hill Properties in New York has grown by over 30% this year in new, experienced recruits, that have chosen to come to work for an independent firm rather than deal with corporate restructuring in their previous firms.

Demand for investment properties continues to be high with very little inventory available. Because of the stock market crash, investors are seeking to invest in real estate deals even with high vacancies rather that “chance” other investment vehicles. This has put a tremendous demand on the investment market, which has pushed the few available properties to prices not always justified by today’s rental rates.

All firms are waiting for either consumer spending or innovation to help us out of this recession to spur office-leasing needs.