Commercial real estate rebounds
TEXT OF INTERVIEW
JEREMY HOBSON: In about an hour we’re going to find out how many people filed new mortgage applications last week. The last few surveys have not given economists much hope for the housing market. But one part of the real estate world that was thought to be in big trouble isn’t looking so bad these days. Commercial real estate — malls, office buildings, and apartment complexes.
Let’s turn to Faith Hope Consolo of Prudential Douglas Elliman Real Estate. She joins us now. Good morning.
FAITH HOPE CONSOLO: Good morning to you.
HOBSON: What happened? Because people were talking about the commercial real estate market as the next shoe to drop in the economy.
CONSOLO: The way the market goes, real estate goes. And once the confidence came back in the stock market, people said, you know what, it’s not that bad.
HOBSON: Are there places that are not seeing it come back?
CONSOLO: A lot of the resort areas have struggled. Although, Las Vegas and Florida lead in the resort areas, but only in the main and main — only Disneyland and the heart of Las Vegas. Other very chi-chi, very high-end resorts are just now seeing interest again.
HOBSON: One of the big parts of the commercial real estate market is obviously office buildings and they have been hit very hard as people have been laid off and offices have been emptied out. What’s going on in that front?
CONSOLO: A lot of the law firms and accounting firms expanded during this time because everybody needs that help to crunch the numbers. They filled a lot of those gaps. For the first time, and I’ve done this over 20 years, I’ve seen the landlords and the tenants work together as a team. I’ve seen deals be more creative, more concessions. The landlord’s crown got tipped, he wasn’t king anymore; he decided he had to reach and make compromises, and they did.
HOBSON: And lower rents?
CONSOLO: Lower rents, longer rent-free time, great concessions. And we saw short-term commercial leases, which you’ve never seen before for offices.
HOBSON: Faith Hope Consolo of Prudential Douglas Elliman Real Estate, thanks so much for your time.
CONSOLO: And thank you.
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