Sunday, April 18, 2010

Commercial real estate is turning around

Doug Brandon runs the Nashville area's largest commercial real estate operation, which just joined several other firms to form Cassidy Turley Commercial Real Estate Services. The newly named company has several offices, with a headquarters in St. Louis, and plans to expand more nationally.
Commercial real estate has been hit hard by the U.S. recession, causing reduced demand for offices and industrial and retail space and a tougher climate in which to win financing to buy and sell existing properties.

Brandon, who worked 15 years in the securities industry (including a dozen with the former J.C. Bradford & Co. brokerage house), switched gears to commercial real estate four years ago. He spoke with Tennessean reporter Getahn Ward about what's ahead in sales and leasing activity here.

How does Nashville's commercial real estate market stack up with other cities' at this point?

It's in much better shape than a lot of cities our size nationally and larger. We don't have one industry that dominates the economy here. Relative to the big picture, Nashville is in much better shape than a lot of cities … whether it's Charlotte or Austin or an Atlanta.

You're going to see Nashville grow a lot faster than our peer cities, mainly because Nashville … doesn't generally have the big peaks and valleys like a lot of cities do. It's either a gradual decline or a gradual increase. We're seeing signs already of things starting to turn around.

For our firm, the first quarter this year in Nashville was probably 150 percent better than the first quarter 2009 from a revenue standpoint, and we're starting to see some activity that will turn into deals probably in the third and fourth quarters.

What's one of the big concerns in the commercial real estate scene here over the next couple of years?

One thing, long term — I'm talking a year or year and a half — is that if we don't start seeing some new projects getting started, the office market could get squeezed a little bit over the next couple of years … and (that) would put upward price pressure on the inventory that we do have out there.

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