Written by Bill Conerly Forbes October 16, 2012
Commercial real estate will improve marginally in 2013. New construction activity will inch upward, operating income will be a little better, and property values will level off. Later, in 2014 or 2015, operating income and prices will both rise, triggering increased construction.
The recession clobbered occupancy of office, industrial and retail space, which pulled rents down. Landlords suffered from lower revenues. In the slow recovery, new construction dwindled to nearly nothing. Current need for additional square footage was nil, and those developers who wanted to build for future demand found that lenders were hesitant to take much risk.
The current situation is that leases are dribbling in, generating small increases in occupied square footage. The current pace of construction is not only lower than in the boom, but well below historic averages. We know that given even middling economic growth, we’ll eventually need to build at a much stronger pace. However, the high vacancy rates that are a legacy of the recession will limit new construction through 2013 at least.
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David Walker joined Saurage Rotenberg Commercial Real Estate in 2012. David is a graduate from University of Southern Mississippi with a multi major in Accounting, Marketing and Business Administration. David practiced accounting with KPMG in New Orleans, LA. He then began working with Audubon Insurance gaining multiple years’ experience in this field. Leaving as Chief Operating Officer from Audubon Insurance, David began his real estate development career. David has multiple years in real estate brokerage dealing in farm and large tracts of land.
Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Growth Coalition; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).