By Tim Loughran
Virginia’s sluggish commercial real estate market should continue drifting along with the overall economy for at least the next 12 months, according to an electronic poll of nearly 900 attendees at Tuesday’s 21st annual Virginia Commonwealth University Real Estate Trends Conference at the Greater Richmond Convention Center.
Responding to a series of questions asked from the podium, 64 percent of those who responded (from their seats via wireless push-button keypads) said their personal outlook for the economy was “about the same,” while 20 percent said they expected the economy to get worse during the next year.
Asked about their forecasts through October 2012 regarding the availability of working capital and fresh credit for commercial real estate projects, only about a third of the respondents expected any increase; on the other hand, 9 percent said capital for CRE projects would decline, and 57 percent said they expected tight credit conditions to continue at current levels for at least another year.
Aside from rising prices for what he called a select group of fully-rented “trophy properties” in big cities such as New York, San Francisco, Boston and Washington, D.C., keynote speaker Mark G. Dotzour, chief economist at Texas A&M University’s Real Estate Center in College Station, said “I’m bullish on commercial real estate.”
Citing American families’ newfound determination to repay household debts and rebuild their retirement nest eggs in the wake of the 2008-2009 Wall Street meltdown, Dotzour predicted that U.S. consumer demand and job creation — two principal drivers of new commercial real estate investment — would continue to languish through the 2012 elections and should pick up in the first quarter of 2013, regardless of which political party controls the White House or Congress.
“It’s painful, but … I think the U.S. economy is spring-loaded for recovery,” said Dotzour. “We could have a strong recovery. It’s just a matter of when.”
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