Hey...How's the commercial market???

That's what everyone is asking... The short answer: deals are floating around but not many are willing to commit. I've got clients that are worried about the economy and they are in medicine!....a once thought recession-proof industry.

Locally, there are pockets of Savannah (retail on Hwy 17 , office & retail on Chatham & Pooler Parkways), Hinesville & Richmond Hill that, not stellar, are active.  Credit, still tight, is preventing tenants from getting construction loans to build out space & slowing down deals.  Less cargo crossing GPA docks has reduced port related business, contributing to lower small-bay industrial absorption.  Big box absorption, driven by national firms needing a port city distribution center, has slowed as well.

Tenant allowances & incentives are plentiful.  Tenants, especially retailers, have a good argument to request rate reductions or some type of deferral.  We have done this successfully for a couple of clients.  Lease rates are aggressive.  Sale prices have dropped but, not precipitously because Savannah did not over build like other markets.  In full disclosure, the 7000sf former Rite-Aid building above is back on the market.....tight financing strikes again.  

The Macro picture....some CRE national prognosticators are concerned with looming CMBS defaults due to dropping values & an inability to refinancing maturing loans.(read more)   A positive, Cap Rates are rising & we are suppose to see the economy level off 3rd-4th quarter this year. If you dont require an extreme amount of leverage, NOW is the time to buy!

Rex Benton is a Commercial Real Estate Advisor for Mopper-Stapen, Realtors. He can be reached at the downtown office of Mopper-Stapen, Realtors at 912-238-0874 or via email.