The generally acquisitive outlook prevails even as nearly all respondents--96.5%, to be precise--agreed that lenders have gotten more stringent on providing credit compared to six months ago, and just under 93% said they expect this stringency to continue. "The fact that borrowing is tougher today is in fact a good thing for long-term property valuations," commented the industrial properties owner. "You have to secure the best financing available at the time--nothing stands still."

A smaller majority (84.6%) said they're accepting lenders' stricter terms, while nearly three-quarters of respondents are nonetheless looking for alternative lending sources. "We are always looking for lenders that would give great fixed interest rates on either 10-year interest only or 30-year P&I with less than 20% down," commented the VP of operations at a residential property owner.

A VP at a publicly traded REIT explained, "We are a low-leverage buyer, issuing stock as needed for acquisitions. We are hoping that the current credit quandary will lead to opportunities for us as the highly leveraged players get squeezed." The managing member of an office properties firm said his company is looking for alternative sources of credit "until the credit markets realize that New York City is almost unaffected by the subprime fiasco. The lenders can only stay away from lending for just so long and then they have to get back to their business of lending."

Again, survey respondents were nearly unanimous in agreeing that the competitive situation in their market has gotten more challenging for building owners than it used to be. Even so, 86.2% have managed either to maintain the same vacancy rates or bring those rates down, and 93% have retained most of their existing tenants in the past couple of years. An office properties owner who was among those maintaining the same level of vacancy rates commented, "A certain amount of vacancies are voluntary--vacancies to preserve the space for upgrades."

Speaking of upgrades, just over two-thirds of respondents reported spending a great deal in the past 12 months on installing amenities in order to stay competitive in attracting and retaining tenants.

The upgrades undertaken by building owners by and large didn't include green practices. Nearly 60% of respondents said they have not opted for environmentally sustainable energy management programs and building design in new construction and/or retrofitting existing properties. Asked if they planned to do so in the next 12 months, 38% of respondents hedged their bets by skipping the question. Among those who did respond, 61% said they do not plan to take steps toward greening their properties within the next year.

Costs of all kinds are on building owners' minds: 92.3% expressed concern about how much operating expenses have been going up. "Prices of commodities are now beyond any single company's or nation's control--it is what it is," offered one respondent. "However, the labor cost and union cost have gone out of control." The expense category most frequently cited by respondents was taxes, listed by 34.5% as the fastest-growing operating cost across their portfolios.

Just over half of respondents said they felt that construction/capital improvement costs have been going up reasonably in the past 12 months. "The significant replacement cost increases over the past 24 months had been on hold for a long time. This event is a strong positive in future long term pricing growth."

As for the expenses incurred by tenants in their buildings, nearly 90% of respondents said their rents are competitive within their markets. "Our tenant occupancy level of 97% is a testament to that," noted a VP and director of acquisitions for a retail properties owner.

Seventy-one percent of respondents to this survey said their region of geographic focus encompasses the entire New York metropolitan area. Those who responded to this survey are veterans of the real estate industry: 88.9% of respondents have 10 or more years' experience in this industry.