NAI Global Affiliation Helps Keep Perspective

Will this economy turn around? One can certainly get caught up in all the negative local and national press on the US economy, and frankly, it can be discouraging. But we at NAI Carolantic choose to take another view and gain perspective by our worldwide affiliation with NAI Global. As an international network of brokerage firms with over 5,000 professionals in 55 countries, we keep a very close watch on the global economy and are not as negative as others. According to our NAI Global economist, Dr. Peter Linneman, we have a very faulty memory of previous economic situations. He states, "Every bad winter storm seems like "the worst ever" while you are fighting to get home through the blinding snow. But when the storm ends, it turns out to be "just" another bad storm." Linneman goes on to indicate the prolonged stagflation of 1973-1981 was much worse, as was the collapse of the S&L industry from 1989-1993. This was followed by a combination of the dot-com bubble and 9/11 which destroyed far more wealth relative to GDP, as did the October 1987 stock market crash. Linneman says, "Today's rhetoric is a combination of poor memory and politically-motivated, media-fueled rhetoric."

That's not to say there are not risks given the political, economic and capital markets. However, Dr. Linneman states the commercial real estate markets are clearly in better shape today than in the early 1990s, with lower vacancy rates, higher real rents, and much smaller construction pipelines.

Fortunately for us living and working in the Triangle area, we continue to receive national attention through top rankings in various publications for top business climate, quality of life, etc. This press, along with the hard work of our economic development allies, help keep the Triangle at the top of the list for firms considering relocating or expanding.

National Market Update:

Recently, I heard several economists discuss the US economy indicating they believed we are suffering more of a crisis of confidence, than recession. Numbers indicate a mild downturn, but not a recession. Key points made by the top economist from Ernst & Young, The Federal Reserve Bank of San Francisco, etc. indicate:

1. The economy has been steadily contracting since December 2007, with housing and the financial sector the leading indicators.
2. Though we haven't yet met the definition for a recession (two consecutive quarters of negative GDP), the overall impression is that of a slowdown, impacting nearly all sectors
3. The downturn is in line with expectations and less severe than previous recessions. Most agree that the last two quarters of 2008 will see a slowdown or drop in economic productivity, and that recovery will pick up steam in 2009.

Studies indicate the commercial real estate market will see an increase in vacancies of 1 to 1.5 percentage points, but that increase is on a fairly healthy supply base. As reflected in national numbers, it is also true locally that the industrial market is strongest overall, followed by office. Most investors are sitting on the sidelines waiting to see where the markets will go, and job losses will be way below trend.

Finally, the belief is an economic recovery will come from a stabilization in energy and food prices, and establishing a new balance for the economy. The "dull" downturn will have a "dull" recovery, and will take another year to play out.

Whether a crisis of confidence or not, we at NAI Carolantic Realty are poised to continue to assist our clients... just as we have through previous downturns in the economy over the last 36 years. Whether the Triangle area, or other parts of the world, we hope you will give us call and let us know how we can be of assistance.

John Webster
jwebster@naicarolantic.com

Mr. Webster has a concentration in office and flex space sales and leasing as well as land sales. He is experienced in exclusive tenant/buyer representation for individuals and companies looking to lease space or invest in properties. He has sold over 700 acres throughout North Carolina and represents over 1.3 million square feet for various landlords and tenants.

Mr. Webster serves on the Triangle Commercial Association of Realtors Board of Directors, is a member of the Urban Land Institute Triangle District, TRAOBA, Rotary Club and Ducks Unlimited.

He is a graduate of NC State University.

NAI Global:

With over 5,000 real estate professionals in over 325 offices in 55 countries worldwide, NAI Global serves corporate, institutional and government clients through its strategically located offices in major, secondary and tertiary markets.

Learn more about NAI Global

Company Profile:

NAI Carolantic is the Raleigh/Research Triangle area's leading commercial real estate firm.

• Eighteen Brokers with an average of ten year's experience
• Full-service Property Management Division
• Experienced Marketing & Research Division

Established in 1972, NAI Carolantic is a member firm of NAI Global, the leading international provider of commercial real estate services and solutions.

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Featured Property: 5401 North

Commercial Properties Development Corporation, McCaffery Interests, and NAI Carolantic Realty announce an environment unlike any in the marketplace. Sustainable, 24-hour pedestrian friendly community... new hometown.

Located at the intersection of I-540 and Highway 401 North, the 5401 North project will feature a full range of retail, office, homes and recreation spanning more than 400 acres.

For more information, contact:
Robin Roseberry Anders, SIOR
919.832.0594 or email: randers@naicarolantic.com

 NAI Carolantic's Winning Team

Steve Stroud, Chairman of NAI Carolantic, was a recent panelist at the ULI Triangle Infrastructure 2008 breakfast meeting. Tom Murphy, ULI Senior Resident Fellow and former Mayor of Pittsburgh gave the keynote address followed by a panel discussion of professionals representing both the public and private sectors. Joining Mr. Stroud were: Speaker of the House, Joe Hackney; Representative Deborah Ross; Tom Lee, member of Womble Carlyle Sandridge & Rice; John Hodges-Copple, Planning Director for the Triangle J Council of Governments; and Don Chandler, Chair of the American Consulting Engineers Council and VP of Mactec Engineering. Over 100 people attended the breakfast.

NAI Carolantic was recently named one of the Raleigh/Durham 2007 CoStar Power Brokers for leasing activity based on overall lease transaction volume for 2007 as reported to CoStar. Approximately 50 other NAI member firms were also named Power Brokers. "This exceptional showing reflects NAI's commitment to provide clients with market-leading service," said Jeff Finn, NAI Global President & CEO. "Whether they are major corporations, financial institutions or entrepreneurs, NAI professionals have the experience, knowledge and skill to add value in any situation. We are proud of this strong performance and appreciate the third-party recognition of such prominent, independent authorities like CoStar and Real Estate Forum magazine."

NAI Carolantic was recently named a 2008 BRAVO Award Winner by Metro magazine as one of the Best Commercial Real Estate Companies in the Triangle.

Andrea, Fulcher, CSM, Senior Property Manager, was recently elected 2008-2009 President of BOMA.

Kerry Saunders, Director of Marketing, was recently appointed to the North State Bank Board.

Appreciation!

NAI Carolantic is pleased to have recently assisted the following companies in their commercial real estate needs:

Steve Stroud, SIOR represented the Procter Heirs in the sale of 562 acres of land located on Doc Proctor Road in Wendell, NC to the Trust for Public Land.

Kyle Greer represented Wake Technical Community College in the purchase of 75.36 acres of land on Watkins Road in Morrisville for its western Wake County campus. Approximately 10,000 students are expected to attend when completed.

Ed Brown, SIOR, CCIM represented Deere & Co. in the purchase of a 78,856sf building at 225 International Drive in Morrisville.

Lease Transactions Recently Handled by NAI Carolantic brokers:

Cheminova, Inc./Robin Anders, SIOR
Express Food Group/Ed Brown, SIOR, CCIM, Steve Stroud, SIOR & David Stroud
Mecha, Inc./Joaquin Canals
Paul P. Creech Law Firm & Zaytoun & Miller Law Firm/Gray Creech
Semtech Corporation/Dee Creech Osborne, SIOR
Mutual Distributing Company/David Stroud
Anuva Services, Inc./John Webster
The Teach Me Store/Robin Anders, SIOR
Clinipace, Inc./Robin Anders, SIOR
Golden China/Joaquin Canals
Marina Beauty Supply/Joaquin Canals
Southern Spirit United/Joaquin Canals
Subway Sandwich Shops/Joaquin Canals
Altruent Systems, Inc./Mark Everett
VWR/Dee Creech Osborne, SIOR & John Webster
Central States Industrial Equipment & Service/Dee Creech Osborne, SIOR & John Webster
Dtc Health/Dee Creech Osborne, SIOR
Liberty Property Trust for Eisai Pharmaceuticals and Creative Recycling Systems//Ed Brown, SIOR, CCIM
Tiger Direct/Ed Brown, Joaquin Canals and David Stroud
Mann Asal/Jake Plotkin
Eaton Corporation/Ed Brown, SIOR, CCIM
Afterglow Cosmetics/John Webster
TrustAtlantic, Inc./Robin Anders, SIOR
Eisai, Inc./Ed Brown, SIOR, CCIM
AVN, Inc./Ed Brown, SIOR, CCIM
Taury Lee, Inc./Joaquin Canals
Ryan V. Chance Landscape Services/Gray Creech
Aedi Technology, LLC/Dee Creech Osborne, SIOR
GE Energy & Industrial Services/Dee Creech Osborne, SIOR
Wake County Court of Appeals/Jake Plotkin
American Pool Service, Inc./Jake Plotkin
Bay Six USA/John Webster
Otis Spunkmeyer/Dee Creech Osborne, SIOR & John Webster
John William Pope Civitas Institute/Jimmy Barnes, SIOR
Variety Wholesalers/Jimmy Barnes, SIOR
John William Pope Center for Higher Education Policy/Jimmy Barnes, SIOR