Landscape Management, October 2010

construction offerings Thats an area where people are practically giving away work says the president of Chicagos Christy Webber Landscapes I dont want to deal with that Recovery of nonresidential construction activity typically lags a wider economic revival especially an improvement in employment which drives demand for offi ce and retail space Development acquisitions are beginning to grow in many areas in what AIA describes as a buyers market The organization forecasts single digit gains in most commercial categories in 2011 with an overall 31 increase in nonresidential construction spending Some segments of the commercial market are faring better than others Contractors report college campuses eager to attract and retain students as a growth area They recognize the importance of image even in tough times says Andy Felix president of Foxboro MA based Tree Tech These customers are starting to realize they have vacant buildings that are going to stay vacant if I dont make them look nice adds Todd Dilley general manager of Minneapolis MNs The Lawn Ranger And sometimes a negative is a positive in disguise Developers cut services on their commercial properties back to the point where the banks took over in Tempe AZ But the banks have the money so theyve actually been hiring us back Golembiewski says If you stick around until the bank takes over it can be a good account We are back to the full level of service on some of those properties Obviously this isnt good for building owners who FOUR SQUARE New York Boston Washington San Francisco Demand for commercial properties is the strongest in these four markets SOURCE REAL CAPITAL ANALYTICS OCTOBER 2010 LANDSCAPEMANAGEMENT NET S19 NOT FOR SALE OFFICE SPACE 14 million sq ft The national occupied commercial offi ce space decline SOURCE NATIONAL REAL ESTATE INVESTOR FACE VALUE 41 commercial property values are down from their 2007 peak levels SOURCE MOODYS REAL COMMERCIAL PROPERTY PRICE INDEX 26 U S commercial real estate sales in the fi rst half of 2010 totaled only a quarter of the average of the previous six years as owners kept properties off of the market SOURCE REAL CAPITAL ANALYTICS have lost their properties to the bank but its actually worked out for us While many contractors are fi ghting low bids on commercial projects Joanne Kostecky reports fi nding a few project managers seeking more imaginative landscape solutions They didnt want the typical just put it out to bid and have the lowest bidder do the installation of a poor design says the president of Joanne Kostecky Garden Design Allentown PA They wanted something more creative Shying away from commercial maintenance Webber sees opportunity in municipal work where 65 to 85 of her business is now based Even some of our good municipal contracts are cutting back she admits But a good thing about a lot of municipalities is they wont just take the low bid They are fed up with contractors who dont know how to do their paperwork and dont send a good crew out they know it costs them more in the long run They have dealt with that before and dont want to put up with it So they go for the middle bid which is where we try to sit While the national offi ce vacancy rate rose to 174 a level unseen since 1993 the underlying numbers that make up national fi gures are shifting toward a more positive outlook With favorable supply conditions entering the downturn offi ce properties are poised to rebound much faster once aggregate demand ramps up according to a report by Reis Inc As the country emerges from the downturn economists say there will undoubtedly be some surprises in commercial real estate Though patterns of fl uctuating rents and vacancies may seem counterintuitive Reis says its quite common to see such results at the infl ection point of an economic recovery LM