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In a new option for GlobeSt.com, Quick Survey's respondents were able to file in-depth thoughts on their answers. Their commentary provides interesting depth to the raw numbers. "The sad thing is there seems to be no light at the end of the tunnel," stated one writer. "It's dark in here!"
Of course, not all respondents voiced doom and gloom. "The economy should begin a comeback in 4Q '01," writes one participant. "Demand for space should start increasing 1Q '02."
Another writer is more frank: "The downturn is real, but not as severe as the media hypes it to be."
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"Major corporate space consolidation has not yet peaked in this down cycle," says another writer. "It will get worse before it gets better."
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Not surprisingly, much of the activity that does take place is likely to entail shedding of space, and 57% of our surveyed professionals say that dispositions will be on the increase. Some 24% predict that they will slow, and a middle-of-the-road 19% say that the rate of dispositions will remain at current levels.
One writer offers advice for building owners beset by retracting tenants: "The best opportunity now is for existing owners to refinance into less costly long-term debt as a strategic way to offset profit losses."
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But the sale/leaseback might simply be a way of staving off the P&L shock of the current economy, says one writer: "We are seeing evidence of sale/leasebacks being a source of much needed capital by many corporations such as Xerox."
Facility ownership, by the way, got the nod of 13% of respondents.
So activity will return, as surely as day follows night. But dawn won't come soon enough to satisfy at least one writer. "Until earnings improve, layoffs abate, real hiring begins and corporate investment in plant and equipment resumes," he writes, "corporate real estate will be static to declining as more sublet space clogs the pipeline. Look for two or three more quarters of this."
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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.
