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Perceived bottom leads to sales rush.

It is safe to say that during the last three years, the commercial real estate industry has been experiencing serious doldrums 1990 was an especially bad year In fact it was so bad that many professionals predicted that it could become no worse I was one of those people 1991 was never anticipated to be as tough as it was A popular slogan that many industry pros used was, "Survive till '95."

I am happy to report that the commercial real estate business did hit rock bottom and has remained flat, causing many buyers, vultures. investors or whatever you call them, to buy up properties There is not a gold rush mentality when it comes to these vulture buyers, but on a selective basis, the market is beginning to dry up again.

Weichert Commercial has closed more than 300 transactions in New Jersey and Pennsylvania Transaction to transaction, we re up more than 15 percent from last year. Our dollar volume of transactions closed is up over 25 percent as compared to last year. Nonetheless, we are still in a cautionary position and I do not foresee any monumental transactions taking place

This year s successes have come about due as a result of sales of exclusively listed properties along with the middle market taking additional space. Renters have started to buy space in buildings rather than lease space from landlords The market has become stronger for individuals of high net worths who are able to secure loans and invest in office and industrial properties

What has made Weichert Commercial so successful when most of our competitors are not doing as well is the fact that the industry s top brokers have joined our company in recent years The closing of two prominent New York firms operations in New Jersey, Helmsley Spear and Cross & Brown, caused an exodus of top professionals who wanted to become part of the Weichert family.

Much of the commercial business we have been seeing this year can also be attributed to frictional movement. Many companies are moving locations due to the abnormal circumstances they may be involved with. Some companies want to simply get out of the region they're in due to a high crime rate and decrease in value of the surrounding community, while others are moving into new space to cut unnecessary fat from their budgets by finding less expensive but physically comparable space.

There has definitely been a growth in the movement of tenants in 1992 as compared to recent past years. There was an equal amount of office space absorption in the second and third quarter of 1992 as compared to the full year of 1991 in Northern New Jersey The activity of 1992 was better than the past recent years However, I see a strengthening of prices in 1993 with a slight increase towards the mid to late part of the year There are many excellent opportunities for buyers looking for buildings in this market This tremendous window of opportunity will eventually close up, probably in the next six to nine months, so get out there and make some deals.
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Title Annotation:Review & Forecast, Section IV; New York, New York real estate sales increase in 1992-93 as prices perceived at lowest point
Author:Mahr, Ronald
Publication:Real Estate Weekly
Date:Jan 27, 1993
Previous Article:Let's increase the value of New York City.
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