Marie Zere and panel-Commercial Real Estate Perspective
May 2, 2008 @ 12:00 am EDT
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This morning we had a panel discussion on real estate led by Marie Zere of Zere Real Estate. The other participants were Ted Sasso president of Renaissance Real Estate Service and Don Gallagher president of Gallagher Associates
Sasso began by telling us there is more office & commercial space on Long Island than in all of Boston, making Long Island larger entity than most cities. With all that large space is in limited supply. A bright spot according to Sasso is that downtowns are flourishing. They are doing well for various reasons, among them is the choice of lifestyle, and energy conservation. From an owners perspective rents are slowly climbing, but the net profits are being squeezed by costs. Financing is available, but not at the asking prices of many properties.
Marie Zere’s take on the real estate scene is that it is still a sellers market, but the commercial will eventually suffer some of the problems being experienced in the residential sector. She went on to state that the higher end residential market in the Hampton’s experienced a 7% drop in prices recently, while at the same time the luxury part of the spectrum, $3million plus is still on the rise. She told us that small companies are reducing their need for space because some, or all, of their staff people can work electronically. With transportation fuels being what they are, there is even more pressure on companies and individuals to work from their computers at home. Zere spoke about the concept of cond-ing a residence, essentially making it a two family house. And she advocated for a more robust program of accessory apartments.
We learned that there is a lot of activity in small retail space, medical buildings, and restaurant settings. On the other hand deals are more tenuous and can easily fall apart in the 11th hour. We also learned today that real estate comprises 40% of the Long Island economy.
Gallagher, who has enormous experience in IDA bonds, said that the use of IDA Bonds are happening less and less. There are several factors for this, among them is these are more complex dealings, and since all financing is cheaper the IDA’s are less attractive.