Locals expect few bright spots in 2010

Senior real estate executives remain pessimistic about the prospects for the Indiana market in 2010, although they see signs of improvement in the investment and residential sectors.

That’s according to a survey of leaders of the local real estate community by the local chapter of the Urban Land Institute. The group plans to unveil and discuss the results, along with national predictions for 2010, at an event at the Westin Indianapolis on Thursday.

Among the revelations in the 32-page report: Developers are most concerned these days about job growth. Last year, the group gave energy and materials costs as their top concern.

The consensus is that the retail, office, industrial and hospitality real estate sectors still are in decline, while residential has either bottomed or is showing signs of improvement.

The industry insiders ranked various parts of the business from “abysmal” to “excellent”. No area achieved more than 25 percent “excellent” ratings. Land development fared worst: About 95 percent of those surveyed rated the outlook for land development at “fair” or worse.

“It’s a fairly sober view of how long until there’s a full recovery in the real estate industry,” said Jim Thomas, a partner in Hearthview Residential and program chair for ULI. “Respondents seem to be fully aware of how difficult things are and how long it will remain so.

“We all know it’s not going to stay challenging forever,” he added.

While new developments likely will remain scarce in 2010, particularly in retail and office, the survey shows optimism for investment sales. Most expect good values on income-producing properties.
 
The Thursday event will be moderated by Duke Realty Corp. CEO Dennis Oklak and will feature a discussion about the state of the Indiana market as compared to the rest of the country.

It also will feature a presentation of a national report from ULI, Emerging Trends 2010.

Last year’s report predicted weakness in every area except for the apartment market. The local portion gave Indianapolis a “modestly poor” outlook for 2009, with some strength in the areas of mixed-use, urban-infill development, rental housing and industrial. It said downtown Indianapolis and Carmel would be top submarkets.

Other presenters include Mike Horst, senior resident fellow of leadership for ULI; Jennifer Milliken, principal of Milliken Consulting; Bradley Fuson, a partner at Krieg DeVault LLP; Jon Owens, a principal with Colliers Turley Martin Tucker; and Thomas Stapleton, a senior vice president with Eagle Realty Group.

Registration is still open on the group’s Web site at Indiana.uli.org.