The information circulating today is that the commercial real estate environment is following the residential market into a significant downturn fraught with foreclosures and bankruptcies. And while the news is factual, the businesses that are affected are mostly in the private domain and the numbers are still relatively small. Inability to refinance is at the root of many of the failed properties. Some properties are realizing an increase in vacancies, making rent payments more difficult, while many others are still profitable, but are unable to find lenders willing to re-up on debt coming due.
Through all this, there is still private investment in the marketplace. We are tracking several market-rate or subsidized urban residential projects, and the big box boys: Walmart, Winco and others are taking advantage of the competitive environment to position them for the next upswing in the economy.
The biggest opportunity, however, is in public sector work. Over 75% of the jobs we are tracking come from the public sector. These jobs are already funded and currently working their way through the design and bid process. In addition, there are a number of large schools waiting for bond measures to pass.
So not all is doom and gloom. While we expect a slow 2010, there is work out there, and with the proper management of resources we hope to work through the current slowdown and come out the other side stronger than ever.
Sincerely,
Gary Zagelow
Commercial Sales Manager
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