October 3, 2011
Wishful optimism persists among leaders of Colorado's built environment according to results of a first-ever statewide survey released by the Everitt Real Estate Center at Colorado State University.
The survey provides a first-of-its kind view from the three major sectors involved in the built environment in Colorado, including architectural, construction and commercial real estate professionals. The findings highlight the greatest pessimism among the commercial real estate sector related to challenging national issues, such as the impact of national debt ratings on financing, regulatory guidelines and employment growth. Leaders among architectural and construction sectors expressed more optimism, but retained serious concerns about the future as well.
The statewide survey involved 402 respondents and was coordinated by the Everitt Real Estate Center in CSU’s College of Business and CSU’s Department of Construction Management in conjunction with the Colorado industry associations of the American Institute of Architects, Associated Builders and Contractors Inc. and the Associated General Contractors.
• Architects have a less optimistic 2012 outlook for contractors and commercial real estate sectors alike; yet commercial real estate respondents are fairly optimistic for the construction industry in 2012.
• Prospects of private funding for new development projects in 2012 were predicted to be dismal by all three sectors represented in the survey.
• Increase in competition remains a major trend and concern, although contractors appear to be responding to the challenge by increasing their services, while the commercial real estate sector appears more focused on their core services.
• Less reliance on new development as a business catalyst over the next five years is predicted by architects, while contractors expect new construction to dominate future billings.
• Contractors expressed more optimism than architects regarding employment growth in their firms in the new year, although backlog expectations in 2012 are expected to remain stable.
• Architects believe demand for residential-oriented projects are most likely to increase in 2012, and commercial real estate respondents believe such property types will most likely see a modest appreciation in value in 2012.
• Compared to 2011 results, the commercial real estate sector continues optimism for leasing and sale transactions in 2012, indicate higher reliance on private equity in 2012, have dropped opportunities requiring land development financings and are more skeptical about future job growth and increased regulations.
During the Northern Colorado Real Estate Conference, commentary and insights on the survey were provided by Scott Glick, a CSU professor of construction management; Michael Gifford, executive director of the Associated General Contractors of Colorado; Mark Latimer, executive director of the Associated Builders and Contractors Inc. for the Rocky Mountain Region; and Sonia Riggs, executive director of the American Institute of Architects Colorado. Survey results were presented by Steven Laposa, a professor in the CSU College of Business and Loveland Commercial Endowed Chair in Real Estate.
During separate breakout sessions, Mike Rinner of The Genesis Group and Julie Piepho of Cornerstone Mortgage discussed vital residential and mortgage market trends, while Paul Brinkman of Brinkman Construction, Allen Ginsberg of Newmark Merrill, Randy Shortridge of RB+B Architects responded to a new research report on the five-year office and retail forecast for Fort-Collins-Loveland and Greeley released by the Everitt Real Estate Center.
“We recognize the perils of forecasting especially during challenging economic times when news on the economy and real estate markets can quickly change overnight,” said Laposa, co-author of the report. “ Yet we believe our five-year office and retail forecasts for Fort Collins-Loveland and Greeley provides a possible roadmap for public and private sectors to dampen future real estate cyclical risks as Northern Colorado continues to develop and mature as a market.”
Bob White, president of Real Capital Analytics of New York, a leading expert on global real estate capital markets, was the keynote speaker at the event.
“Colorado State University and the management of our three industry associations are particularly grateful for all of the respondents who made this first-ever statewide survey possible,” Laposa said. “We appreciate their effort and time to respond, allowing us to educate Colorado’s built environment sector on critical concerns and expectations of our important industry. This year’s event truly marks a rendezvous of the critical sectors of Colorado’s built environment industries.”
The Everitt Real Estate Center is based in the College of Business at Colorado State University. EREC serves as a valuable bridge between the university and private business, and is also a catalyst within the university working with students and faculty from various disciplines.