Even experts continue to disagree about the depth of the American economy\u2019s troubles and its impact on commercial real estate. That was clear during the lively opening panel discussion this morning at CPN\u2019s annual Philadelphia Property Opportunities conference.<\/p>\n
\u201cI think we\u2019re facing the abyss, and it\u2019s principally driven by the home building sector,\u201d Chris Terlizzi, executive vice president for Citizens Bank, told about 300 real estate professionals at the Sheraton Philadelphia City Center. \u201cWe have a lot of uncertainty right now, and it\u2019s anybody\u2019s guess as to how it\u2019s going to play out.\u201d<\/p>\n
The current situation is worse than the downturn that started in 1990 because today\u2019s economic slowdown is rippling throughout the global economy, he added. Only the weak U.S. dollar is continuing to keep the economy afloat, primarily by attracting foreign capital looking for bargains.\u00a0\u201cI think America\u2019s for sale at this point,\u201d Terlizzi said.<\/p>\n
Matt McManus, chairman of Bluestone Real Estate Capital L.L.C., agreed with Terlizzi\u2019s pessimistic outlook. \u201cTalking to lenders this past week, I get the sense that they\u2019re preparing for 1990 or worse,\u201d he explained. Craig Butchenhart, president of NorthMarq Capital Inc., acknowledged that he has downgraded his personal outlook for the economy in recent months, placing the chances of a recession at 50-50 rather than 25 percent. But Butchenhart also argued that the commercial real estate sky is not yet falling. \u201cWe\u2019ve been running at about 90 degrees for quite a while now. When the temperature drops to 40, it feels really cold,\u201d he said.<\/p>\n
Despite a stream of bad economic news, real estate fundamentals have not yet been affected. Nationally, NorthMarq Capital\u2019s delinquency rate on its $36 billion servicing portfolio is only .26 percent. That is just a fraction of the 7.5 percent delinquency rate the company had in the early 1990s, Butchenhart reported.<\/p>\n
In the midst of this uncertain climate, Philadelphia\u2019s renowned stability is luring investors from other cities around the country, noted Spencer Yablon, manager of corporate affairs for the Philadelphia office of Marcus & Millichap Real Estate Investment Services.<\/p>\n
The city\u2019s other strengths dominated the conference\u2019s keynote address by Jim Mazzarelli, senior vice president & regional director for Liberty Property Trust. Mazzarelli urged the audience to promote Philadelphia\u2019s often underrated strengths as a strategy to draw the knowledgeable workers that the city needs to boost job growth in general and its real estate market in particular. He cited the area\u2019s highly educated work force, affordability, relatively low commuting time, and sophisticated cultural amenities. But one missing element is the regional approach successfully adopted by many other major metropolitan areas, and Mazzarelli proposed that Philadelphia follow suit.<\/p>\n","protected":false},"excerpt":{"rendered":"
Even experts continue to disagree about the depth of the American economy\u2019s troubles and its impact on commercial real estate. That was clear during the lively opening panel discussion this morning at CPN\u2019s annual Philadelphia Property Opportunities conference. \u201cI think we\u2019re facing the abyss, and it\u2019s principally driven by the home building sector,\u201d Chris Terlizzi,…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742],"tags":[],"class_list":["post-1003705024","post","type-post","status-publish","format-standard","hentry","category-latest"],"acf":[],"yoast_head":"\n