Office activity today can be boiled down to seven drivers, according to Hall Group Chairman and founder Craig Hall. During his keynote speech at Bisnow’s Big South Office event, Hall listed changes in financing, technology and information availability, office space density, parking demand, co-working and flexible leasing, amenities and wellness and sustainability as the major forces shaping today’s office market.
1. Financing “I put on my hat of 49 years here [in the real estate business], and I have never seen a cycle where the lenders have had the regulators keep such a long-term stranglehold on them,” Hall said.
According to him, if lenders were free to lend as they pleased, they would be making more loans than they are. Hall said this tightening of the purse strings is making it hard for newcomers to the market to get the funding they need for their projects.
“In 2007, I could build a building at Hall Park with an 80% construction loan, and I would have lots of banks that would want to give me 80%. Today, I have to kind of scrape around to find anyone willing to do 60% and [Hall Group is] successful in that market … [for] the poor person who is new in the industry and does not have a track record of 49 years, that is tough,” Hall said.