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"There's a lot of money sitting on the sidelines," Wells said Thursday during a presentation at the Southern Hills Marriott. "We think 2010 will start to see an uptick, though value won't come back for a year."
Tulsa's commercial real estate may fare better, he said, predicting the area will outperform the rest of the nation.
Wells' remarks came during the 2009 Tulsa Trends conference, the annual commercial real estate event organized by the Tulsa chapter of the National Association of Industrial and Office Properties.
Different types of commercial properties are tied to economic indicators in different ways, Wells said. Industrial properties aren't as dependent on job growth, so that sector hasn't taken a bad hit. Tulsa's industrial properties are especially well positioned in the recession, he said, as supplies are matching demand and vacancies are below the national average.
But office space is especially dependent on jobs, and so vacancies in that sector may remain high through 2012, he said. Tulsa's vacancies match the nation's.
Retail spaces are between office and industrial in terms of dependence on jobs, though Wells said the continued development of new retail buildings in Tulsa may
keep local vacancies high.
Though Wells said he's optimistic for a recovery in 2011, he said the specter of inflation or deflation, a struggling bond market and the durability of the recovery could complicate the economic situation.
Herb Krumsick, senior vice president of J.P. Weigand & Sons Inc. in Wichita, also spoke.
He said the economic problems in real estate began in 2001. Former Federal Reserve Chairman Alan Greenspan encouraged low interest rates, which both
delayed and worsened the current recession, Krumsick said. Krumsick estimated that the economic recovery, as well as the commercial real estate recovery, will be delayed as a rapidly changing economy and fear keep nervous investors out of the market.
"The lenders and the buyers will be very conservative until we've hit the bottom of the market," he said.
Robert Evatt 581-8447 robert.evatt@tulsaworld.com
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