Local business leaders envision 2011 recovery

By John Boyanoski  

FEBRUARY 2, 2010 11:15 a.m. (0)

The next few months will be relatively stagnant for the Upstate real estate market as many business leaders believe 2011 – not 2010 – will bring a recovery from the latest global economic depression.

Even as news of two quarters of gross national product growth, which signals an official end to the U.S. recession, came to light Tuesday morning, the meeting of 300 area business leaders was subdued at the CBRE Furman Co. annual economic forecast.

The Upstate economy weathered a rough 2009 just like much of the rest of the nation. Companies cut jobs, got employees to work hard, spent less and tried to make small technological advances to stave off more losses.

However, most federal forecasters predict it will be a four-tiered recovery effort and the job market won’t get back to its pre-recession numbers until 2013, said Brian Reed, an economic analyst with the Furman Co.

In addition, business leaders were asked to rate when they think their companies will get back to their pre-recession levels via an automated response system. Forty-four percent said 2011 will be their rebound year, while 17 percent said 2012, five percent answered 2013 and four percent said later. Twenty-one percent answered 2010.

That means the local real estate market will face a slow 2010, Reed said.

The office sector will see an increase in vacancy rates from 18 percent to 20 percent in the next few months as more space – City Plaza at Main and Broad streets downtown is one example – comes onto the market, and some larger projects – the South Financial offices on Interstate 85 – remain mostly vacant.

However, Reed said the Upstate is a small enough market that one major tenant leaving or entering could radically change the dynamics. He doesn’t see any real growth until 2013.

The industrial market, however, is much stronger in part due to national and state growth in exporting, he said. The national vacancy average is around 16 percent, but the Upstate will be at 11 percent for the first half of 2010, and then start to decrease.

The retail market did not see the major pains that were expected in 2009 in terms of store closings and layoffs, but that does not mean the market is rosy, he said, There will be no major retail projects to open in 2010 in the region, which should help fill existing slots.

In the new paradigm, every tenant is potentially viable whereas is in the past, shopping center owners could be more selective, Reed said. The vacancy rate will stay at about 12 percent compared to the national average of 13 percent.

The land market essentially is flat in the region, he said. There is a seven-year backlog of developed lots in existing subdivisions that were never completed. Those lots will be the first to be developed once that market sees recovery in 2013.

Comments

Add New

Leave a Comment
Comments are moderated and may not be posted immediately.
Name:
Email:	do not notifynotify
Title:
	Please input the anti-spam code that you can read in the image.

3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."