Although the economy seems to be on the mend, the commercial real estate market is still facing an uphill battle.[IMAGE]
To provide information and insight into the challenges and opportunities of the commercial real estate industry in the state of Ohio, Smith Realty Partners recently released its annual Smith Report, and the firm conducted the Central Ohio Commercial Real Estate Survey as part of the report. According to the results, central Ohio business professionals say the commercial real estate market has a way to go.
Of the more than 250 business professionals who responded to the December 2009 survey, 86.6 percent do not feel the recession is over, and 64.9 percent believe it will be 18 months or longer before the commercial real estate industry experiences steady growth.
Even in this down market, respondents pointed to possible areas of opportunity. According to survey responses, 33.7 percent think investing in commercial real estate is where the most activity will occur in the market over the next six months. In addition, 20.2 percent believe the most activity will occur in the industrial market, and 19 percent feel it will be in the office sectors.
""Investors will continue to get deals in the office and retail segments,"" said Rick Smith, president of Smith Realty Partners. ""As more and more properties go into receivership, investors will have many opportunities.""
Amongst several challenges adding to the stress of this demographic, the Smith Report cited the high unemployment rate, an increase in vacancies, and a decrease in sales activity. As a result, the report suggests business will continue to be tough for commercial owners. According to Bill LaFayette, VP of economic analysis for Columbus Chamber of Commerce, the pending economic recovery will help everybody, but it will help the office market more than any other commercial real estate sector.
The economists on Columbus Chamber of Commerce's blue chip economic forecast panel expect professional and business services to have a 2.7 percent increase in employment, resulting in 4,100 jobs in the eight-county Columbus metropolitan statistical area. This will translate into a demand for office space, and LaFayette advises the commercial real estate industry to keep an eye on office-using employment-business and professional services, medical/healthcare, and financial services.