Is the real estate industry poised to ride out a bear market better than other industries?
heard on the street
“We continue to believe the real estate market is well-positioned to weather an economic slowdown. It does not appear that we are heading into a 1980s or early 1990s repeat. The risk today appears on the demand side rather than the supply side of the equation. That is not to say that we will be without challenges. In any economic downturn real estate demand is negatively impacted. The discipline maintained throughout the current cycle should ensure that the downturn will not seriously damage the market's fundamentals.”
— Mike Hannon, president,
PNC Real Estate Finance, Pittsburgh
“For the most part, there hasn't been a tremendous amount of overbuilding, and there's a pretty good balance of supply and demand. Although there are exceptions when you look at San Francisco, Seattle, Texas and some other markets sensitive to the technology companies. Those markets are going to take a significant hit in terms of rental rates. Overall, one of the great things about the real estate industry is that people are very creative and flexible, and will do what they need to do in order to survive.”
— Richmond McCoy, CEO,
Urban America, New York
“This time, you don't have a big overhang of supply. People didn't just put up buildings without tenants. In 1989, there was 60 million sq. ft. of space put into the market. In this cycle, you would need a significant decline in employment to put a tremendous amount of office stock onto the market, due to low vacancy rates. I think there are a lot of smart players in the real estate market today.”
— Barry Gosin, CEO,
Newmark & Co., New York
“Real estate is not the catalyst bringing down the economy. There are other factors. First, there has been no overbuilding in the marketplace. Second, the financial institutions have taken a more conservative approach to real estate. Third, with the information explosion, people know what projects other people are doing. The real estate market is not dragging anything down. If anything, it's very strong.”
— Herbert F. Agin, CEO,
Sutton & Edwards/TCN Worldwide,
Long Island, N.Y.
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