Greg Morris Fuller Commercial - Denver To Rebound In 2008.
BrokerIPTV : We are talking today with Greg Morris, President and CEO of Fuller Commercial Real Estatee. Greg thanks for being with us.
Greg Morris: Sure.
BrokerIPTV : I heard you speak about a couple of weeks ago, in the question out of the audience was, tell us what’s the status of commercial real estate? You are very candid, very frank, can you recap that?
Greg Morris: Sure, I guess I defined as it changing and it is changing really in three ways.
- The Credit Crisis of course hurt a lot of people, certainly in the residential, but it made, it spooked lot of lenders.
- Construction cost has gone up considerably.
- Finally, there is new wave of green or lean buildings. In the green buildings are going to cost property owners a lot to retro fit in order to be able to ad vide by the terms of the lean buildings are establishing.
BrokerIPTV : Why is the market so tough right now?
Greg Morris: Well, its tough because its very very competitive, but I would say it is not tough, its just intensely competitive. There is a lot of money out there, the buyers are institutional in nature, they are smart, they are sophisticated and there is lot of buyers for fewer properties.
BrokerIPTV : Agents want to know where the buyers are and why are they not out looking or dipping into their pocket for another home?
Greg Morris: Well they can get the loans like they use to. There was lot of the thing called bridge or this interim, short term financing, that’s pretty much gone away. The lending criteria today are much different than it was just 60 days ago. So, these buyers are out there, but there are not as many as they were.
BrokerIPTV : I heard to you talk a lot about the uncertainty. I mean we got oil prices up, we've got interest rates being cut, we got an election coming up, does this just make people nervous?
Greg Morris: Exactly, I don’t think there is any concrete reason why the market is fickle right now, but it is uncertain, that we don’t know who the next president of United States, is going to be a specially as democrat versus republican and that uncertainty is really frightened a lot of investors and so everybody is in a “wait and see” mode.
BrokerIPTV : What’s your biggest challenge you are facing in 2008?
Greg Morris: Well, I think continue more the uncertainty. I happen to be an optimist and I really think that in the first quarter we are going to see a market rebound. The commercial market is relatively solid across the board. The economy is relatively good right now and the only thing scaring everybody is the unknown, which is hard to put your finger on.
BrokerIPTV : Finally, we see developers still building prices, despite the scenario that you just laid out and so some of us in real-estate say “man, they are putting up another 500 units hi rise .” What do they know that we don’t know?
Greg Morris: Well, I think it depends on a product type and the commercial that is office, industrial or retail or an apartment buildings and the retail market, you don’t see a lot of retail going up right now, but you are doing the office market, because the office market is relatively tight. You have a vacancy downtown of under 10%, I think its around 8% right now. Most of the vacancy is in the C-class buildings, most demand, has been in the A-class building. If you are 15,000 to 20,000 square foot class-A tenant right now. You just can’t find this space and so that’s the reason that Heinz and Opus is currently building too about 250,000 square foot office building. So, the demand is there and they will get the rents they need. Industry was been steady in high-queue distribution warehouse space is very much in demand and that’s mostly in northeast, inadequate curses because of the transportation hub with the I-70, afraid EIA as well as rail that runs though here. So, the commercial market is not in bad shape right now.
BrokerIPTV : Greg, thanks for being with us, it was so interesting talking with you.
Greg Morris: All right.