Four of five panelists defended the current leasing market against a description of "bloodbath" - provocatively set forth by John Salustri, GlobeSt.com's national editor - during a town hall-style meeting. "There is certainly rental rate growth pressure and a lot more competition," conceded Gerry Sweeney, president and CEO of Brandywine Realty Trust.
"I've been through four recessions, and this is the worst," said Tony Hayden, chairman and CEO of Beacon Commercial Real Estate and a Liberty director. "We're out making deals, and this is a bloodbath. It will continue through this year, begin to recover in '04, and come back in '05."
"The multifamily market is relatively stable," said Carl Dranoff, president of Dranoff Properties. "Vacancies are at no more than 5% to 6%." However, the high-end of the multifamily market has been impacted by single-family housing sales, he acknowledged.
"When interest rates go up, multifamily will advance," he noted. He also said most of the available residential conversions have been completed. He sees new development, especially at the waterfront and around universities.
Retail is also poised for growth, according to Lewis Gantman, president of Kravco Co. "There are tremendous infill opportunities in all segments," said Mike O'Neill, chairman of Preferred Real Estate Investments. "Our problem is that Philadelphia doesn't believe in itself," he added.
"The [favorable] quality-of-life issues here are not recognized," Sweeney agreed. "We need to prove to people that Philadelphia will hold its own."
"Is Philadelphia going to be the Danish or the donut, rich or empty at the center?" asked William Dunkelberg, professor of economics at Temple University, during "Economist Crossfire" with Joel Naroff, chief economist at Commerce Bankcorp.
"A lot of older cities have been left behind," said Naroff. "The solution is to revitalize older urban neighborhoods," a remedy Philly is pursuing, both men agreed during the session moderated by Jonathan Schein, president and CEO of Real Estate Media Inc.
Instead of attempting to fill Bill Rouse's shoes, Hankowsky said during a one-on-one interview by Michael Desiato, editor-in-chief of Real Estate Media and GlobeSt.com, he hopes his succession to Liberty CEO is the first of many for a growing, public company. "Bloodbath or not," he said, a priority now is to fill vacancies in a tough market.
"We also must make sure the current difficulties don't get in the way of looking long-term and laying the foundation for future growth," he said. He also confirmed, "we'll always be a Philadelphia company. Our largest concentration of assets is in Philadelphia and the suburbs."
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