2011 Forecast — Think 1991

Since the fall of Lehman in September of 2008, there has been much financial and economic turmoil. However, very recently we have seen signs that a recovery may be upon us.

True, the unemployment rate remains at levels not seen since the early 1980s. However, the shift of power in Washington should result in a modest improvement leading to a stabilization of both rental and occupancy rates.

Yes, huge debt maturities are in the offing. However, CMBS quietly returned in 2010 and liquidity in the debt markets should continue to improve. The years of ‘extend and pretend’ (or ‘amend and pretend’ If you prefer), appear to be over as the banking community is increasingly taking action on maturing real estate loans through sale or foreclosure. There will be greater opportunities to acquire real estate at distressed prices than in 2010 as bid-ask spreads narrow and transaction velocity increases.

Several opportunities are on the front-burner for CenterMark in 2011. Our time will be spent on 1) ‘acquisitions and redevelopment’ of shopping centers in Greater Cleveland, 2) ‘build-to-suit’ projects, primarily in Ohio, 3) growing third-party property management, and 4) expanding joint-venture partnerships.

Happy New Year!