Commercial R.E. issues addressed both locally and on Capitol Hill

The NAIOP Upstate New York Chapter kicked off the 2010 year with our "Commercial Real Estate Market 2010 Outlook" "program presented by VP, Joe Rowley of CB Richard Ellis. In front of a sold-out audience, Joe told us that the greater Rochester area (which consists of Monroe, Ontario, Wayne, Livingston Genesee and Orleans Counties with a population of 1,091,918 people) consists of 21.7 million s/f of retail market space, and has only increased by 75,000 s/f in 2009. The vacancy rate, however, increased upward, ending the year at 12%. The Rochester office market space is comprised of approximately 15.5 million s/f of competitive class A and B office space with 6.7 million s/f located in the Central Business District and 8.8 million s/f in the suburban markets. The vacancy rate for class A space in the Central Business District decreased 2.5% to 12.9% with the class B space showing a higher rate of 22.4%. Overall class A inventory increased 4.2% to 13.8% in the suburban market with class B space at a 21.9% rate. The greater Rochester industrial market consists of approximately 82.3 million s/f with a vacancy rate that increased by about one-half of a percentage point to 12.7%. The Suburban market makes up 46.9 million s/f and saw their vacancy rate increase to 15.8% at year end with the city industrial market which makes up 35.4 million s/f showing a decrease in vacancy from the previous years 10.2% to 2009 rate of 8.7%. This is a very positive trend in a down market. Rowley concluded by saying that due to a soft market in 2008 and the truly declining market in 2009, vacancy rates increased across all property types and sublease opportunities also increased causing lease rates to come down from previous highs. He added that many analysts are saying that the economy has found the bottom, but the recovery will be slow rather than robust and will put downward pressure on commercial real estate demand well into 2010. This event was sponsored by Real Estate Recovery Solutions which is comprised of CB Richard Ellis, Chamberlain D'Amanda, Integrated Facility Solutions, The Bonadio Group and LaBella Associates. In February of each year, NAIOP brings the leadership of its chapters together in Washington, D.C., for an education and training symposium that includes programs on legislative affairs. NAIOP is very active in tax issues, the environment, and transportation and infrastructure. John D'Amanda of Chamberlain D'Amanda, Stuart Baker of S.E. Baker Co., John Nitsche of WebTitle Agency, myself, and our executive director Karen McCready, joined other NAIOP members from around the U.S. and Canada. The symposium was made up of meetings to help chapters evolve and grow in 2010 and also to become better informed on federal issues and proposed bills that could impact commercial development in our local markets. On our last day in D.C., we met with our area congressmen, congresswoman, and senators to let them know our concerns on legislation that could affect commercial development. We met directly with congressman Christopher Lee, and with top aides from senator Schumer, Gillibrand, congresswomen Slaughter, congressmen Maffei and Massa's offices. The issues we addressed were our opposition to Carried Interest Tax Increase, reaching 30% by 2010 and 50% by 2015; Energy Building Codes; our support for extending the TALF program through 2010 for the CMBS market and encouraging the federal government to help banks and lending institutions to clear their balance sheets of toxic assets allowing them to increase their commercial lending, along with extending existing legislation on Leasehold Improvement Depreciation and Brownfield Remediation Expensing. Tom Thaney is president of the NAIOP Upstate New York Chapter, Pittsford, N.Y.