Raleigh, NC – January 14, 2010 – Wow, 1,800 people attended NAI Carolantic’s 25th Annual Triangle Commercial Real Estate Conference yesterday. Hard to believe we have been reporting on the commercial real estate market in the Raleigh/Durham area for so many years. A big thanks goes to our corporate sponsors: Bobbitt Design Build, Edge Office, JDavis Architects, Manning Fulton & Skinner, The Title Company of North Carolina, TriSure, Wachovia, a Wells Fargo Co., and Withers & Ravenel. This event doesn’t happen without them and their generous support.
We reported this year that the tailspin is over for the residential markets, but the commercial markets will continue to suffer during 2010. With continuing loan write downs, increasing vacancies and reducing cash flows, average losses in real estate values will exceed 30%. A continuing sluggish economy with minimal job growth will prevent any recovery in 2010. Yes the market will hit bottom, which in itself can be considered good news.
The reduction in new construction projected for 2010, the lowest in 15 years, is not good news for those in the construction business. It does, however, help prevent vacancy numbers from getting too far out of whack. Absorption continues to be minimal, so it will take a little time to get vacancy back to a healthy number.
2009 was an awful year for job growth. There just wasn’t any. Job growth is what makes our area so strong. We had 25,000 new jobs annually in the 90’s, but from 2000 to 2009 we saw choppy annual job growth ending with a loss of 30,000 jobs this past year. However, early projections for 2010 are positive. Although minimal, its still good news and we have to build on it in the days ahead.
Jimmy Barnes, SIOR, President of NAI Carolantic Realty