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Too soon to call it a comeback

By Burl Gilyard
Dolan Media Newswires

Minneapolis — There’s an abiding belief that a new year means new hope and better times.

The general hope is that a new calendar translates into a better business climate.

Indeed, there seem to be ripples of optimism out there in local commercial real estate circles.

Sure, brokers will tell you that there’s been an uptick in activity in the market. Of course, brokers almost always will tell you that there’s been a recent uptick of activity in the market. That’s why they’re brokers. When you make your living from commissions, you have to be wired for optimism.

But as far as I can tell, it remains to be seen when the anecdotes of renewed interest will translate into the reality of signed deals.

There’s often a disconnect between the rhetoric and the reality of business.

“This business is in the toilet. There are no deals anywhere. Oh, you want to quote me? In that case, we’re seeing some very encouraging signs out there. I think we’ve turned the corner.”

Everybody’s a spin doctor, particularly when business is bleak.

There’s a general feeling that 2010 will be better than 2009. It almost has to be.

Market reports looking back at 2009 survey one of the worst years in the business that anyone can recall with a dizzying rate of negative absorption and ever-climbing vacancy.

In talking regularly to many commercial real estate professionals, one often gets the feeling that many already have written off 2010 and are looking ahead to 2011.

In the year-end report from Colliers Turley Martin Tucker, one market watcher, surveying the investment climate, offered this forecast: “The economy does not get back to a prosperous level until 2015 and 2016.”

The reality is that many are buckling up for another tough year in the trenches. The reality is that the comeback isn’t back yet.

There are few signs of job growth, which is what drives the need for more space. And commercial real estate remains a lagging indicator, meaning it’s usually last in line to catch up to the eventual recovery.

Renewals and relocations count as deals, but in the grand scheme, many moves don’t add true absorption to the local market.

Amid the tumult, the landscape of the local commercial real estate business is changing.

Many people who once worked for large firms are now out on their own, trying to drum up business for new one-person shops.

An oft-heard refrain today is that many of the best businesses are started in the worst of times. But first you have to survive the bad times.

Happy New Year? Not just yet. How long can you hold your breath?

Oh, this column is being printed?

Well, in that case, I’m sure we’ve turned the corner.

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