"Prevailing uncertainty will mean a conservative tone for the
real estate markets during 1988. Risk aversion will mean an even
harder look at the details of proposed deals, a consequently slower
response time to offerings and a lower ratio of closings to
Sound familiar? It should, as much as it reflects Oklahoma and
the energy belt states. But the authors of this statement, Landauer
Associates Inc., were referring to the entire country.
Landauer, the Madison Ave.-based international real estate
consulting firm, has published its sixth annual Real Estate Market
Forecast, a 40-page summary of prevailing economic conditions that
influence the investment and development markets throughout the
"Corporations," it says, "hold a strong hand when compared with
other property market participants. Real estate assets should be
scrutinized for their potential contribution to both the balance
sheet and the earnings statement.
"The corporate (financial officer) will...be interested in the
company's owned or leased property. The corporate real estate audit
is, if anything, more vital than ever.
"The opportunity to structure an equity lease should not be
overlooked," the report says. "Sale-leasebacks, consolidations,
relocations, financings and numerous other options can be employed
from a position of strength as corporations confront 1988."
As the prevailing theory holds, real estate prices in the energy
producing states are tied to the price of oil. Thus, that bit of
advice from Landauer pertains more to inflated markets on the East
and West Coast than it does to the local real estate market. But
tax revisions pertain to one and all.
And because of this state's depressed market, it might be a good
idea from the investment standpoint for companies to consider
purchasing, instead of leasing, a building, said Mike Sanders, tax
principal with the Oklahoma City office of Arthur Young & Co., an
international accounting firm.
"If it is true that the real estate market has bottomed out, it
can't go anywhere but up," he said, "and the potential is that (a
company) could get a great return on their assets, not so much from
the tax advantage, since depreciation lives have been lengthened, but
from the potential of an increase in the value (of property)."
Jim Austin, manager of the Oklahoma City office of Coldwell
Banker Commercial Real Estate Services, placed a caveat on the
assumption that the potential of real estate values make purchasing
a commercial building a good investment for a business that wants to
Advantages must be weighed against the lease rates which, like
property itself is now inexpensive compared to earlier times. …