“You can’t shit a deal”
That’s what a prominent local developer quipped to me during the last recession. This week The National Bureau of Economic Research formally declared that the recession began last December. This was no news to the local commercial real estate community. Developers have seen the volume of deals steadily decline since at least then. For most, this was the slowest summer for leasing in recent memory.
For the past year brokers have been trying to fill vacant space in new buildings while several tenants vacated or downsized in older buildings. Building owners are offering a variety of incentives to both prospective tenants and their brokers in an attempt to fill the empty spaces. Much of that effort is to no avail.
From my experience, companies are hunkering down. Even those who really need to expand are opting to stay in place and make do with what they have as they wait to see happens to the overall economy regardless of what is happening locally.
And locally we are in better shape than most of the country.
The Baltimore Washington corridor is still poised for strong growth with an influx of more than 20,000 new jobs coming to Fort Meade over the next three years. The only problem is that those jobs won’t really start filtering in here until the fourth quarter of 2009. That doesn’t help a building owner looking for rent paying tenants today.
All across the region, building owners and their listing agents are sitting down trying to figure how to position their empty space against the other guys’ empty space. The few prospects actually looking for space are being heavily courted and the profit margins are paper thin. Most don’t expect things to pick up much for at least a year.
That’s not exactly a cheerful note to end the year on.