BOMA Testifies on Credit Crunch Ramifications

Aug. 25, 2008
The Washington, D.C.-based Building Owners and Managers Association (BOMA) Intl. testified before a U.S. House of Representatives hearing of the Committee on Transportation and Infrastructure's Subcommittee on Economic Development, Public Buildings, and Emergency Management on the effects of the credit crunch on federal leasing and construction.

Due to the rise in delinquencies and defaults on subprime mortgages in the residential sector over the past couple years, the uncertainty of financing is negatively impacting the commercial real estate market, making it difficult to acquire capital for new projects and renovations in both the public and private sector. According to Richard D. Purtell, BOMA Intl. chair and portfolio manager at Cincinnati-based Grubb & Ellis Management Co., "Lenders are making it more and more expensive for even the most economically sound companies to borrow money."

During the hearing, Purtell explained how building owners wishing to refinance, sell existing buildings, or plan for future renovations are being negatively affected, as well as how tenant retention is becoming a concern as future tenant improvement packages are becoming more limited and tenants are struggling to survive.

Purtell also described how a lack of access to capital is affecting public buildings in cities like San Diego, where buildings are being advertised at "bargain-basement prices," and in Philadelphia, where planned renovations are being stripped from 2009 budgets.

Purtell briefed subcommittee members on a number of other concerns, including the negative impact on build-to-suit leases, which have been significantly reduced due to the inability to secure capital and skyrocketing construction costs, and the ability of building owners to attract and retain tenants, and to stabilize rent and occupancy rates.

The full testimony can be read at  

Voice your opinion!

To join the conversation, and become an exclusive member of Buildings, create an account today!

Sponsored Recommendations

Building Better Schools

Download this digital resource to better understand the challenges and opportunities in designing and operating educational facilities for safety, sustainability, and performance...

Tips to Keep Facility Management on Track

How do you plan to fill the knowledge gap as seasoned facility managers retire or leave for new opportunities? Learn about the latest strategies including FM tech innovations ...

The Beauty & Benefits of Biophilic Design in the Built Environment

Biophilic design is a hot trend in design, but what is it and how can building professionals incorporate these strategies for the benefits of occupants? This eHandbook offers ...

The Benefits of Migrating from Analog to DMR Two-Way Radios

Are you still using analog two-way radios? Download this white paper and discover the simple and cost-effective migration path to digital DMR radios that deliver improved audio...