Published November 1, 2008 | November 2008 issue
Deal volume for the year is down by as much as 90 percent from a year ago. There are still buyers in the marketplace, but very few of them are all-cash buyers. Smaller deals (less than $5 million) that can be financed by community banks can still be done. All property types have been affected by the tighter market, although multifamily housing doesn't seem to have suffered as much as office, industrial and retail.
Jim Mayland, Manager of Research Services
Colliers Turley Martin Tucker—Minneapolis, Minn.
Well, I certainly see it from a personal level on the real estate sales; they've slowed to a crawl in recent times. … [F]inancing has really tightened up the scrutiny on the developers-on how they're going to pay back-in the last several weeks, and I think it's going to tighten up even more so in the next several weeks. I think the bailout may be a good thing, but there's going to be some long-term effects
from the bailout and hesitancy from developers to
continue forward with projects.
Tony Retaskie, Executive Director
Upper Peninsula Construction Council—Escanaba, Mich.
If our particular clients have been nervous and holding back, we haven't seen any evidence of it yet. Now, who knows what tomorrow might bring? ...
I keep wondering if it's going to affect something directly, but so far we haven't seen any signs of it. … [O]ur banks and credit unions just did not play that game, and so they're fundamentally doing pretty well. Now, naturally there's a ripple effect because they sell paper to some of those outfits. … With the exception of a couple of the resort areas, we did not have the big real estate run-ups that some of the rest of the country had.
Keith Rupert, Chairman of the Board
CTA Architects and Engineers—Billings, Mont.
It hasn't slowed down. … [But] I think that it's coming down the pike. Normally when the housing drops off, it's followed by commercial down the road. That seems to be what's going to be happening. As money gets tighter, it's going to be harder for some of these businesses to expand.
Ken Miehl, Manager
Mike's Building Supply—Onalaska, Wis.
We're a little bit behind out here. It's too early to tell. … We haven't seen any financing trouble here, not yet, no. Commercial building is still pretty strong out here. It's probably a little bit weaker than last year, but not much.
Don McGuire, Manager
Professional Contractors Inc.—Bismarck, N.D.
Our market here has actually been quite good this year. Š Overall, I think there's obvious concern that the credit is getting tighter. The people who are able to finance projects are of a higher quality than two, three years ago, and money's tighter and controls are tightening up. … If you're trying to do it based on future dollar possibilities, it's not happening. Seems to be that they're requiring that you have that 35 percent in cash in the bank, and it's going to be documented.
Jim Scull, Owner
Scull Construction—Rapid City, S.D.
Interviews were conducted in late September.