Newspaper article St Louis Post-Dispatch (MO)

Rosier Outlook for Real Estate Here; St. Louis Lags Many Cities in Recovery but Has Some Pluses for the Future

Newspaper article St Louis Post-Dispatch (MO)

Rosier Outlook for Real Estate Here; St. Louis Lags Many Cities in Recovery but Has Some Pluses for the Future

Article excerpt

A photo of a tortoise flashed on a large screen and drew knowing chuckles from the full-house crowd of developers, bankers, consultants and government officials.

The slow-moving reptile and the pace of economic recovery was an easy comparison for more than 200 people gathered Thursday to hear experts give next year's outlook for real estate.

"The recovery has been much more like the tortoise than the hare," said Stephen Blank, a senior resident fellow of the Washington-based Urban Land Institute. "We've become used to slow relief. But we have finally turned the corner, and I think we'll be headed in the right direction in 2013."

Real estate markets in busy coastal cities New York, San Francisco, Los Angeles and Boston, for example emerged first from recession and will pick up their pace of recovery in 2013, said Blank, a principal researcher for Emerging Trends, an annual report by ULI and PricewaterhouseCoopers. He was the main speaker at the annual outlook presented by ULI's St. Louis chapter.

Big investors scared away by the high prices in coastal cities will look more closely at properties in secondary markets, including St. Louis, experts predict.

Key to investor success in those smaller cities will be partnerships with local players who know their markets, Blank said.

"They need a local sharpshooter who understands the market," he said.

Pitfalls remain. Developers must cater to companies' desire for more-compact offices and retailers' growing embrace of e-commerce over physical stores. Rapid construction of multifamily housing, strong over the last two years, could produce an overbuilt market by 2015.

In most of the 51 cities Emerging Trends evaluated, recent job creation should push down office and factory vacancy rates, said the report, which is based on interviews or survey responses of more than 900 real estate experts. Lowering vacancies further is the absence of construction during the recession.

As it has in previous reports, St. …

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