"We're all anxious about 2002," John Aldrich, president of Colliers International's Dallas office, tells GlobeSt.com. That, he says, is because the "New Year deal" pipeline is hovering at 60% of what it normally is at this time of year. It's not the fault of Sept. 11. If anything, he explains, Sept. 11 forced the government's hand into meting additional interest rate cuts and economic adrenalin shots.
Aldrich believes the government's response with economic energizers is the upside to September's abrupt halt in business. "I think it will pick up quicker than it would have otherwise," he says. "It's caused some people who were thinking about doing something to do it."
Aldrich is among the cautiously optimistic that the New Year will bring new trade and at a pace that's more like 2000. The more optimistic in the region, he says, are convinced "by the end of the second quarter of 2002, we'll be rolling again." Aldrich isn't so sure. He thinks money suppliers might keep reins taut for the entire year. That's based on his conversations with developers who say a mid-year turn-around is just way too optimistic.
Greg Biggs, senior vice president and Southwest region manager for Julien J. Studley Inc., agrees with Aldrich that today's state of affairs is just bitter reality of the 2001 economy. For tenant reps, the upside has been two words that haven't been heard for quite awhile–free rent. "It's a commonplace term these days," says Biggs. It's often just a month or two, but still it's an incentive that tenant reps have come to expect at the bargaining table. Since class A rent in Dallas has not dropped significantly this year, Biggs says free rent is the bargaining tool of choice.
Biggs, like Aldrich, isn't looking for a turn-around anytime soon. The real estate market, he reminds GlobeSt.com, historically lags the economy by six months. "In Dallas, we're reeling more from the economy than we were from Sept. 11," he says.
The executives concur it's not been all doom and gloom in 2001. Biggs says tenant reps, his specialty, are cutting good deals. And Aldrich says it's not been the best of years, but it's not been the worst: steady deal flow has prevailed. The bottom line is where there's a will, there's a way.
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