Real estate sector welcomes 2002

By Patrick Healy, Journal Staff Writer

The real estate industry in Rhode Island kept its head above water during the difficult economic times of 2001 and predictions within the industry are that 2002 will be swimming. Daniel Cregan, president of the Providence commercial real estate firm Paramount Properties Group, said an unstable economy is a cloud that can have a silver lining for the real estate industry. "Changing economic conditions help to further define the real estate market," he said. "Rhode Island has never had too much vacant space. Developers in the state have not overbuilt, therefore prices have continued to increase." "We have experienced price increases in office space, land and industrial properties throughout 2001 and expect the same trend this coming year," he said. Providence's NAI MG Commercial Real Estate President Michael Giuttari agreed that this year would be better than the last, but for a slightly different reason. He said, "2001 has forced us to diversify (product type and market location) a little more than we normally would have. This forced diversification has been fruitful in creating deals with many out-of-state brokers and owners. Overall, 2002 looks to be a much better year than 2001." Giuttari emphasized that diversification was the key to his company's success this year. "Certainly our business was down from 2000," he said. "Because of more diversification in the types of deals we were getting into, the drop was not as dramatic as it could have been. If we stayed with just our core office and industrial projects in Rhode Island and Southeastern Massachusetts, the year could have been worse." Neil Amper, vice president of Providence-based Rodman Real Estate, has a different view of the past year and the coming one. "We haven't really changed the way we've done business," he said. "We had an excellent year. Some of the things that were in the works for a long period of time finally came to closing (such as a development at Eagle Square in Providence, and the Kaiser Building in Portsmouth). We didn't feel a slowdown although next year it appears as it's going to be slower than this year." Charles Francis, president and partner of the Providence-based office of CB Richard Ellis, said 2001 was a decent year for his company and that 2002 will "continue to see modest improvement." "We are pleased that at least the market held up," he said "(With companies) beginning to get their confidence back, we think it may be the second half of 2002 before we see growth." The residential market continued to be hot in 2001, with the age-old formula of low supply resulting in high demand, and higher prices. Sharon Steele, president of the Rhode Island Association of Realtors and Providence's The Sharon Steele Group, said any slow down in sales this year is not attributable to a low demand, just a low inventory. Chris Barnett, spokesman for the Rhode Island Housing and Mortgage Finance Corp., said this high demand and high price range has caused an affordability gap that he predicts will only get worse in 2002. "It's becoming more and more difficult for working Rhode Islanders to find housing they can afford," said Barnett. "We've seen rents increase 25 percent over the past three years and the sales prices of single-family homes jump 18 percent in the past year."

Published 01/7/2002

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