By Thomas Olson, PITTSBURGH TRIBUNE-REVIEW
The economy will not encounter a double-dip recession but will continue along a "half-speed" recovery in 2010, PNC Financial Services Group's chief economist said Thursday.
The same should be true for Western Pennsylvania, where unemployment will probably peak at nearly 9 percent before edging back to about 8 percent by the end of the year, said Stuart Hoffman.
"I see no reason why Pittsburgh should not recover, along with the U.S.," he told about 250 people at the Economic Club of Pittsburgh's annual forecast luncheon at the Omni William Penn Hotel, Downtown.
Unemployment in the seven-county Pittsburgh region was 7.9 percent in November, according to the most recent figures from the state Department of Labor & Industry.
Hoffman noted unemployment traditionally lags other economic indicators by a year or so. For instance, gross domestic product -- the total value of goods and services sold -- rose 2.2 percent in the third quarter, signaling a recovery.
He expects the United States will create about 2 million jobs this year, which would begin to recoup the 7.75 million lost since the recession began in December 2007.
Hoffman did not project how many jobs the Pittsburgh region might gain this year, but he expects new jobs will come in the education and medical fields, and possibly among "green" and energy-related jobs and maybe retail.
"Consumers are beginning to spend a little more freely because they have a little more confidence," he said. He also expects modest growth in this region for home sales, starts and remodeling.
Richard Hoey, chief economist for BNY Mellon Corp., provided a global forecast. He projects the world economy will grow at a rate of about 4 percent this year, including a 3 percent to 4 percent rate in the United States.
"We're going to have a world and U.S. economic recovery that's sustainable," said Hoey. "We're not going to have a double-dip recession."
Hoey said the recovery in the stock market that began in spring is "fully justified," based on the direction of and outlook for corporate profits.
He is pessimistic, however, about the federal government reversing growth in budget deficits. He envisions a "fiscal train wreck" in five to seven years, in which public borrowing to service that debt will crowd out the private sector's demand for capital.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
Monday, January 25, 2010
Friday, January 22, 2010
NAI Pittsburgh Commercial Represents Eye Candy Optical in new Lease, Peters Township, PA
Pittsburgh, PA - (January 20, 2010) -
NAI Pittsburgh Commercial is pleased to announce the 2,211 square foot lease signing of Eye Candy Optical Center at Donaldson’s Crossroads in Peters Township. Formerly Giant Eagle Optical, Eye Candy Optical Center has moved to a new suite at Donaldson’s Crossroads and will be celebrating a grand opening on January 30, 2010.
Eye Candy Optical Center is a full-service vision center offering eye exams, selection of over 2000 frame styles and contacts, as well as eyeglass accessories.
Patrick J Sentner, SIOR, Principal and Edward R. Lawrence, MBA, Associate, of NAI Pittsburgh Commercial represented Eye Candy Optical Center in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI Pittsburgh Commercial is pleased to announce the 2,211 square foot lease signing of Eye Candy Optical Center at Donaldson’s Crossroads in Peters Township. Formerly Giant Eagle Optical, Eye Candy Optical Center has moved to a new suite at Donaldson’s Crossroads and will be celebrating a grand opening on January 30, 2010.
Eye Candy Optical Center is a full-service vision center offering eye exams, selection of over 2000 frame styles and contacts, as well as eyeglass accessories.
Patrick J Sentner, SIOR, Principal and Edward R. Lawrence, MBA, Associate, of NAI Pittsburgh Commercial represented Eye Candy Optical Center in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI Pittsburgh Commercial represents Service Express at BURSCA Industrial Park
Pittsburgh, PA - (January 20, 2010) -
NAI Pittsburgh Commercial is pleased to announce the 3,000 square foot lease signing of Service Express, Inc at 500 BURSCA Drive at the BURSCA Industrial Park in South Fayette Township. Headquartered in Grand Rapids, Michigan, Service Express, Inc provides on-site computer hardware maintenance services for mid to high end servers. Service Express, Inc has averaged 20% annual growth over the past ten years and was named to the Inc. 5,000 List of America’s Fastest Growing Privately Held Companies in 2007, 2008, and 2009.
Edward R. Lawrence, MBA Associate, of NAI Pittsburgh Commercial represented Service Express, Inc in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI Pittsburgh Commercial is pleased to announce the 3,000 square foot lease signing of Service Express, Inc at 500 BURSCA Drive at the BURSCA Industrial Park in South Fayette Township. Headquartered in Grand Rapids, Michigan, Service Express, Inc provides on-site computer hardware maintenance services for mid to high end servers. Service Express, Inc has averaged 20% annual growth over the past ten years and was named to the Inc. 5,000 List of America’s Fastest Growing Privately Held Companies in 2007, 2008, and 2009.
Edward R. Lawrence, MBA Associate, of NAI Pittsburgh Commercial represented Service Express, Inc in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI PITTSBURGH COMMERCIAL REPRESENTS DICLAUDIO & KRAMER AT ABELE BUSINESS PARK
Pittsburgh, PA - (January 20, 2010) -
NAI Pittsburgh Commercial is pleased to announce the 2,078 square foot lease signing of DiClaudio & Kramer, LLC Inc at Abele Road, Suite 1001 in the Abele Business Park in South Fayette Township. DiClaudio & Kramer, LLC is a CPA firm that offers a full range of auditing, accounting, and tax services.
Edward R. Lawrence, MBA, Associate, of NAI Pittsburgh Commercial represented DiClaudio & Kramer in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI Pittsburgh Commercial is pleased to announce the 2,078 square foot lease signing of DiClaudio & Kramer, LLC Inc at Abele Road, Suite 1001 in the Abele Business Park in South Fayette Township. DiClaudio & Kramer, LLC is a CPA firm that offers a full range of auditing, accounting, and tax services.
Edward R. Lawrence, MBA, Associate, of NAI Pittsburgh Commercial represented DiClaudio & Kramer in the transaction.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI PITTSBURGH COMMERCIAL LEASES 3,364 SF AT 859 MISSIONARY DRIVE LOCATED IN THE SOUTH HILLS
Pittsburgh, PA - (January 20, 2010) -
NAI Pittsburgh Commercial is pleased to announce the 3,364 SF lease signing of Life Cycle Engineering located at 859 Missionary Drive, Pittsburgh PA 15236.
Edward R. Lawrence of NAI Pittsburgh Commercial represented the building owner in the transaction. Tom Denk and Rich Beynon of Beynon & Company, represented Life Cycle Engineering.
The flex building is comprised of 29,256 SF and is listed for sale at $1,295,000 through NAI Pittsburgh Commercial.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
NAI Pittsburgh Commercial is pleased to announce the 3,364 SF lease signing of Life Cycle Engineering located at 859 Missionary Drive, Pittsburgh PA 15236.
Edward R. Lawrence of NAI Pittsburgh Commercial represented the building owner in the transaction. Tom Denk and Rich Beynon of Beynon & Company, represented Life Cycle Engineering.
The flex building is comprised of 29,256 SF and is listed for sale at $1,295,000 through NAI Pittsburgh Commercial.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
Tuesday, January 12, 2010
5 Markets Expected to Fare Best in 2010
After a dour year where housing prices fell more than 12% nationwide, will 2010 bring sunnier tidings?
The short answer: only a tad in a select few places but overall not really.
The five areas that Moody's foresees home prices performing best in 2010 are: Tacoma, Wash., (an increase of 2.44%); Memphis, Tenn., (up 0.99%); Pittsburgh (up 0.89%); Charleston, S.C. (up 0.18%); and Seattle (decline of 0.50%). (These five markets are culled from data on Moody's Economy.com and based on the largest 100 metro areas.)
Yes, there have been pieces of good news over the past few months that have indicated a quiet, slow bottoming of real estate prices. For instance, sales of existing homes rose 7.4% in November from the previous month, the highest rate since February 2007, according to data from the National Association of Realtors released last week. The tax incentives for home buyers passed earlier this year along with historically low interest rates have no doubt nudged many buyers into the market.
Yet a recovery depends on several factors. At the top of the list is a turnaround in the labor market. More people going back to work will have a beneficial effect on household income and consumer confidence and would stabilize the housing market, says Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. As of November, one of out every 10 American workers is unemployed, according to the Bureau of Labor Statistics. And while that's down slightly from October, Moody's expects the jobless rate to peak in the third quarter next year at 10.6%.
Another factor is the backlog in foreclosures, which are dragging down values and adding to the housing supply. "By all accounts, that backlog is at a historic high," says Gabriel. "It suggests that many more homes will be sold on a distressed basis either via foreclosure or short sale."
RealtyTrac, an online marketplace of foreclosure listings, estimates 3.2 million households will have received a foreclosure notice in 2009, up from 2.3 million in 2008. The firm projects that number could approach four million in 2010. "We do think 2010 will probably represent the peak, and in 2011 [foreclosures] will start to go down at least marginally," says Rick Sharga, senior vice president at RealtyTrac. Why the acceleration next year? First, says Sharga, there have been enormous delays in processing this year. Many homes that would have gone into foreclosure in 2009 won't actually enter and complete the process until 2010.
Second, a big wave of option adjustable-rate mortgages (ARMs) will reset next year. (These are a somewhat obscure category of ARMs that were popular during the real estate boom, which allowed borrowers to make a range of monthly payments. The options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many of the loans, balances have risen while values of the underlying properties have plummeted.) "The number of loans that will adjust starts to go up significantly in the middle of next year. A lot of those loans are underwater...and owners will be really hard-pressed to avoid going into foreclosure," Sharga says.
Home prices, of course, are variable and depend on many factors, each of which are difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody's Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. "These areas will essentially be flat next year," says Steve Cochrane, managing director at Moody's Economy.com.
These pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in synch with household income, says Cochrane.
There are other factors, too. Pittsburgh, for example, along with western Pennsylvania, is late in the traditional business cycle, and "our variations tend to be smaller," says Robert Strauss, a professor of economics and public policy at Carnegie Mellon University in Pittsburgh. The economy has managed to stay fairly stable mostly because over the past several decades it transformed from a center of manufacturing to one of education and health care with a bit of financial services and technology.
Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. "They didn't have such a big run-up, and they have a diverse economic base that enabled them to stay stable," she says. Home prices in Charleston didn't get out of line with household incomes; also, Boeing (BA: 61.60, -0.60, -0.96%) is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.
As for Memphis, the city's largest employer is FedEx (FDX: 84.99, +2.06, +2.48%). Transportation services is one of the early industries to turn around as the economy recovers, says Cochrane, and that should support the area's housing market.
The economies of Tacoma and Seattle - which are neighboring cities - were "much stronger for much longer than much of the rest of the country," says Cochrane. Software giant Microsoft, based in Redmond, Wash., a Seattle suburb, was one reason the area remained stable. Another was Boeing, which builds its commercial airplanes in Seattle.
Going forward, Seattle's position as a key hub of trans-Pacific trade should be a plus for the economy. Orders are increasing for commercial aircraft and it should see some rising demand for tech products, Cochrane says. The outlook for 2010 for the two Washington cities "is for fairly stable, moderate economic growth," he says.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
The short answer: only a tad in a select few places but overall not really.
The five areas that Moody's foresees home prices performing best in 2010 are: Tacoma, Wash., (an increase of 2.44%); Memphis, Tenn., (up 0.99%); Pittsburgh (up 0.89%); Charleston, S.C. (up 0.18%); and Seattle (decline of 0.50%). (These five markets are culled from data on Moody's Economy.com and based on the largest 100 metro areas.)
Yes, there have been pieces of good news over the past few months that have indicated a quiet, slow bottoming of real estate prices. For instance, sales of existing homes rose 7.4% in November from the previous month, the highest rate since February 2007, according to data from the National Association of Realtors released last week. The tax incentives for home buyers passed earlier this year along with historically low interest rates have no doubt nudged many buyers into the market.
Yet a recovery depends on several factors. At the top of the list is a turnaround in the labor market. More people going back to work will have a beneficial effect on household income and consumer confidence and would stabilize the housing market, says Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. As of November, one of out every 10 American workers is unemployed, according to the Bureau of Labor Statistics. And while that's down slightly from October, Moody's expects the jobless rate to peak in the third quarter next year at 10.6%.
Another factor is the backlog in foreclosures, which are dragging down values and adding to the housing supply. "By all accounts, that backlog is at a historic high," says Gabriel. "It suggests that many more homes will be sold on a distressed basis either via foreclosure or short sale."
RealtyTrac, an online marketplace of foreclosure listings, estimates 3.2 million households will have received a foreclosure notice in 2009, up from 2.3 million in 2008. The firm projects that number could approach four million in 2010. "We do think 2010 will probably represent the peak, and in 2011 [foreclosures] will start to go down at least marginally," says Rick Sharga, senior vice president at RealtyTrac. Why the acceleration next year? First, says Sharga, there have been enormous delays in processing this year. Many homes that would have gone into foreclosure in 2009 won't actually enter and complete the process until 2010.
Second, a big wave of option adjustable-rate mortgages (ARMs) will reset next year. (These are a somewhat obscure category of ARMs that were popular during the real estate boom, which allowed borrowers to make a range of monthly payments. The options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many of the loans, balances have risen while values of the underlying properties have plummeted.) "The number of loans that will adjust starts to go up significantly in the middle of next year. A lot of those loans are underwater...and owners will be really hard-pressed to avoid going into foreclosure," Sharga says.
Home prices, of course, are variable and depend on many factors, each of which are difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody's Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. "These areas will essentially be flat next year," says Steve Cochrane, managing director at Moody's Economy.com.
These pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in synch with household income, says Cochrane.
There are other factors, too. Pittsburgh, for example, along with western Pennsylvania, is late in the traditional business cycle, and "our variations tend to be smaller," says Robert Strauss, a professor of economics and public policy at Carnegie Mellon University in Pittsburgh. The economy has managed to stay fairly stable mostly because over the past several decades it transformed from a center of manufacturing to one of education and health care with a bit of financial services and technology.
Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. "They didn't have such a big run-up, and they have a diverse economic base that enabled them to stay stable," she says. Home prices in Charleston didn't get out of line with household incomes; also, Boeing (BA: 61.60, -0.60, -0.96%) is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.
As for Memphis, the city's largest employer is FedEx (FDX: 84.99, +2.06, +2.48%). Transportation services is one of the early industries to turn around as the economy recovers, says Cochrane, and that should support the area's housing market.
The economies of Tacoma and Seattle - which are neighboring cities - were "much stronger for much longer than much of the rest of the country," says Cochrane. Software giant Microsoft, based in Redmond, Wash., a Seattle suburb, was one reason the area remained stable. Another was Boeing, which builds its commercial airplanes in Seattle.
Going forward, Seattle's position as a key hub of trans-Pacific trade should be a plus for the economy. Orders are increasing for commercial aircraft and it should see some rising demand for tech products, Cochrane says. The outlook for 2010 for the two Washington cities "is for fairly stable, moderate economic growth," he says.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
2010 Global Market Report
Commercial real estate markets around the world experienced the full impact of the global economic recession in 2009, according to the 24th annual Global Market Report released today by NAI Global. Rising vacancy rates and declining rental rates were evident in virtually every market sector and geography, with weak demand and a growing supply of sublease space further eroding market fundamentals.
After a turbulent 18-24 months since the market peaked, 2009 marked a year where transaction volume nearly came to a standstill as corporate tenants waited for clear signs of recovery and investors remained on the sidelines waiting for signs the bottom has been reached. As the year progressed, government intervention in the form of stimulus packages in the U.S., Europe and parts of Asia took hold and by year’s end many markets had begun to stabilize. However, with U.S. unemployment topping 10%, consumer demand and spending power at their lowest levels in decades and international manufacturing and trade proceeding at a crawl, the global recovery will take some time to truly stimulate economic growth.
“The past year was extremely challenging for commercial real estate, and we don’t anticipate much new demand in 2010,” said Jeffrey M. Finn, President & CEO of NAI Global. “We’re working with our corporate clients to help them take advantage of the current tenants’ market to reduce their long-term occupancy costs. Many tenants are able to negotiate more favorable lease terms today in exchange for a longer commitment. This ‘extend and blend’ practice is a trend we see continuing well into the next 18-24 months.”
Investors who have been sidelined by economic uncertainty will see tremendous acquisition opportunities in the coming year as banks and financial institutions clean up their balance sheets and move more aggressively to dispose of commercial real estate loans and financially distressed real estate assets, said Finn.
“The recession has been over for six months and job growth is just months away, but the fact remains it will be impossible to predict what will happen next,” added Dr. Peter Linneman, NAI Global Chief Economist and Principal at Linneman Associates. “With significant tax, healthcare and regulatory proposals still in the offing, there is little clarity as to the ultimate outcomes or costs. We’re concerned with commercial mortgage delinquency rates as they have been on the rise and could keep the commercial real estate industry in neutral for several more months.”
While the United States, parts of Europe, the Middle East, Asia and Latin America experienced a deep recession, some economies survived 2009 nearly intact. Brazil, India and China all experienced a slowdown in economic growth, international trade and manufacturing demand, yet continued to post positive GDP growth for the year, far outpacing their neighbors and global trends. Brazil is looking for increased activity in the commercial real estate sector, specifically in big cities like Rio de Janeiro, which will soon host the World Cup and Olympic Games. At the end of 2009, China began to see a sharp rise in foreign direct investment in its manufacturing sector, and is expected to post 9% GDP growth in the coming year. India is positioning itself as a leader in logistics and manufacturing, and though commercial property markets will remain soft in the short term, significant growth is expected over the longer term.
The 2010 Global Market Report includes market data for more than 200 markets worldwide. For more information, contact us at 412.321.4200.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
After a turbulent 18-24 months since the market peaked, 2009 marked a year where transaction volume nearly came to a standstill as corporate tenants waited for clear signs of recovery and investors remained on the sidelines waiting for signs the bottom has been reached. As the year progressed, government intervention in the form of stimulus packages in the U.S., Europe and parts of Asia took hold and by year’s end many markets had begun to stabilize. However, with U.S. unemployment topping 10%, consumer demand and spending power at their lowest levels in decades and international manufacturing and trade proceeding at a crawl, the global recovery will take some time to truly stimulate economic growth.
“The past year was extremely challenging for commercial real estate, and we don’t anticipate much new demand in 2010,” said Jeffrey M. Finn, President & CEO of NAI Global. “We’re working with our corporate clients to help them take advantage of the current tenants’ market to reduce their long-term occupancy costs. Many tenants are able to negotiate more favorable lease terms today in exchange for a longer commitment. This ‘extend and blend’ practice is a trend we see continuing well into the next 18-24 months.”
Investors who have been sidelined by economic uncertainty will see tremendous acquisition opportunities in the coming year as banks and financial institutions clean up their balance sheets and move more aggressively to dispose of commercial real estate loans and financially distressed real estate assets, said Finn.
“The recession has been over for six months and job growth is just months away, but the fact remains it will be impossible to predict what will happen next,” added Dr. Peter Linneman, NAI Global Chief Economist and Principal at Linneman Associates. “With significant tax, healthcare and regulatory proposals still in the offing, there is little clarity as to the ultimate outcomes or costs. We’re concerned with commercial mortgage delinquency rates as they have been on the rise and could keep the commercial real estate industry in neutral for several more months.”
While the United States, parts of Europe, the Middle East, Asia and Latin America experienced a deep recession, some economies survived 2009 nearly intact. Brazil, India and China all experienced a slowdown in economic growth, international trade and manufacturing demand, yet continued to post positive GDP growth for the year, far outpacing their neighbors and global trends. Brazil is looking for increased activity in the commercial real estate sector, specifically in big cities like Rio de Janeiro, which will soon host the World Cup and Olympic Games. At the end of 2009, China began to see a sharp rise in foreign direct investment in its manufacturing sector, and is expected to post 9% GDP growth in the coming year. India is positioning itself as a leader in logistics and manufacturing, and though commercial property markets will remain soft in the short term, significant growth is expected over the longer term.
The 2010 Global Market Report includes market data for more than 200 markets worldwide. For more information, contact us at 412.321.4200.
NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE
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