Oddly enough, when asked if they've noticed a decline in sales and leasing, 88.5% of respondents said no while a paltry 11.5% admitted to it. A classic case of false bravado? Perhaps.
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"That's strange," observes Jacques Gordon, international director of investment strategy and research for LaSalle Investment Management in Chicago. "False bravado might be the only explanation, unless a bulk of the respondents were from areas like New York City, which didn't experience that severe a decline. But from a researcher's perspective, the statistics all clearly show a huge drop-off in leasing and a substantial drop-off in sales."
Respondents took a more realistic view when enumerating the other causes of the slump, and 12% of the survey's participants blamed job cutbacks and the inability of corporate America to implement real estate growth strategies. As many respondents blamed real estate pricing. This, presumably, is a reference to budgetary constraints more than inflexibility on the part of the brokerage community. (In fact, a prior Quick Survey revealed that brokers are more than willing to negotiate and that concessions were on the rise. Click on: Quick Survey: Concessions Are Back )
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When will it all return to normal? It wasn't too long ago that experts were predicting a year-end loosening of the market and a resultant Q4 closing crunch.
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Not so any longer, and the rebound has been delayed by three months. Most respondents (33%) don't see relief coming until the first quarter of next year. But Q4 did come in second, garnering 27% of the vote. An equal number believe it will last still longer--until the second quarter. A pessimistic 13% are betting on Q3 of next year.
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Not surprisingly, most participants (68%) bash the idea of a Q4 closing crunch. Some 32% of our respondents are holding onto the hope that it will occur.
Gordon--who first predicted the crunch in a recent GlobeSt.com UpClose (click on: UpClose With LaSalle Investment's Jacques Gordon)--still believes the crunch will occur. "If you're on the buy side, the answer is yes, because that's always the way the industry works," he explains. "There's been a stand-off between buyers and sellers that will last until sellers realize in the third quarter that they have to do the deal for fiscal and tax considerations."
He does acknowledge, however, that the prolonged effects of the economic slowdown will also push some deals into the next year. Needless to say, time alone will tell.
(GlobeSt.com's Quick Survey is not a scientific poll and is designed to reflect only the opinions of those participating in it.)
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
