A road paved with roses? (US/EU/EMEA)

With all of the sober stories we hear each day, I'd like to share with you another On The Road Story (OTR) written by US Real estate expert Steve Felix. His market view includes a quotation from Geoffrey Dohrmann, President & CEO of Institutional Real Estate, Inc. Will the road be paved with roses? Marinus Dijkman, Editor in Chief REP.


Depending on your perspective what you see may look different to your expectations...Steve Felix looks at the Empire State Building in a new light.

Steve Felix: I had breakfast this morning with a long-time industry friend who is one of the top industrial brokers in New Jersey. His market update included the following story: He's seen more interest from tenants in the past few weeks (which is a good thing). Recently he showed a building to a prospective tenant who was accompanied by their own broker.

One of the first things the tenant and their broker asked was: "Does the landlord have the money to complete the T/I?" (tenants improvements). Also, the tenant's broker wanted the full commission for themselves leaving the landlord's broker (my friend) in a position to have to go back to the landlord and tell him that if he wanted a real shot at landing this tenant, he'd need to pay and additional 50% commission.

In sharing this story with some colleagues, I learned that this is not too different from the period we fondly refer to as the "Tech Wreck" when tenants roamed the land and controlled the deals. But to me, the focus on landlord financial wherewithal and the fact that the tables have turned more to a tenant wanting to know more about the financial stability of the landlord, rather than vice versa, really paints a picture of how things are today. If leasing activity is gaining momentum it's a good sign for the investment sales part of our industry as occupancy will be up and values can be somewhat stabilized and more deals can start getting closed. But, this appears to be just the start of what many hope will be continuous positive progress in the broad commercial real estate industry.

However, as Geoff Dohrmann wrote in a recent editorial in 'The Institutional Real Estate Letter': " Everyone seems to agree that the buying opportunity of a lifetime is approaching. And everyone seems frustrated that that buying opportunity hasn't yet materialized – at least, not in any meaningful way. What we all forget is that it took almost four years during the previous time the markets really hit the wall before the financial system organized itself to efficiently disgorge its surplus real estate....To paraphrase former Treasury Secretary Larry Summers, there will be no billionaires created this time around. But opportunities will benefit buyers and penalize holders of assets in the short term. In the long term, at least from my perspective, everything is coming up roses." www.irei.com

Now, Geoff has had a perch on the institutional real estate industry through a number of cycles and if you go back through the years of his editorials, he's been right more of

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