Published Tuesday, January 06, 2009

Commercial prices don't appear to be affected by slowdown

The Newnan Times-Herald

Commercial property sales have definitely slowed down but the "prices haven't really been affected yet," said Jim Mottola, broker for Parks & Mottola, Inc. real estate in Newnan.

"From a land standpoint, for commercial property, there's less activity -- but there's still activity," said Mottola.

A lot of that commercial price stability may be attributable to those sitting on the sidelines waiting for the market prices to improve, he said.

"Eventually, when these sellers don't want to wait any longer for the market to improve, you might see some declines," he said.

Foreclosures are driving real estate prices on the residential front, but "that hasn't happened so much with commercial properties, at this point," he said.

"But eventually, if the sellers don't want to wait it out, then prices will likely fall."

He said that a lot of residential areas have been spared the declines as well -- but other areas have been especially hard-hit.

"On the residential side, some properties haven't gone down in value at all, but other areas are down 30 to 40 percent," Mottola said.

Mottola said that Coweta County "is a good area for steady growth" and he sees some light at the end of the tunnel.

"I'd say we're a lot better off than Henry County or some of the other surrounding counties, at this point," said Mottola of the south metro Atlanta area.

He said new growth in the Newnan Crossing Bypass/ Ashley Park corridor plays a big role in countering some of the downward slide. Belk will be opening a new store at Ashley Park in the spring, and Rooms 2 Go and Men's Wearhouse are also coming to the area soon.

"Ashley Park is really important, and so are our transportation corridors," he said. "With Highway 34 and Interstate 85, you have two big roads crossing near there, and historically, those intersections are where commerce takes place. I think it draws in a lot of people from other areas."

Mottola said he expects to see a lot of growth in the medical field, as well, once the new Piedmont Newnan Hospital facility gets off the ground. The project, which broke ground in late 2008 at Poplar Road and Interstate 85, was delayed due to financing with the ailing financial markets.

"We've been so far behind in serving our population, from a medical standpoint, for so long," he said. "So we're going to see a number of physicians come in here, and I think we have the potential to see a lot of growth in medical offices and buildings. We'll have a lot of activity, from that standpoint."

Mottola said quality health care and a quality school system tend to draw in business and residential growth, and Coweta County should be in good shape on both fronts.

"Any setbacks we're having, hopefully it's just a temporary thing," he said.

"I think the much bigger question is what we're going to see happening all across the country. It's hard to predict what industry is going to be hit next. There are a lot of places that, once that big plant shuts down, there's no engine for growth. There's no way to replace those jobs.

"But I think that when the national turnaround does come, that we're going to be in better shape than a lot of other areas around the country," he said.

"The prices of raw land for residential development have gone down significantly" thanks to the continuing deterioration of the housing market, adds broker Jim Mottola of Parks and Mottola in Newnan.

Frank Barron of Lindsey's Real Estate said that he's stopped trying to guess where and when the turnaround will occur.

"Of course we're always hopeful. We're always optimistic," he said.

"And I do think things will be better this year, and I do feel like our area is going to come back sooner than a lot of others, because of our location, if nothing else."

But Barron added that in his 35 years in the real estate business, "I've never seen the real estate market as bad as it is right now."

Even though he's seen a handful of recessions, Barron said that "this is the least demand I've seen for real estate.

"There's just no confidence in the economy, no confidence in just about anything," he said. "Right now, people are scared. And I can understand that."

He expects that Coweta County and the nation will see a turnaround in the real estate market late in 2009, but probably not much sooner than that.

"We'll just have to see what the government is trying to do, with its stimulus packages, and see what kind of effect that has," he said.

"I do think it's likely that things will pick up in 2009, because we've had so much of a slowdown -- really a shutdown, to be honest -- that there's bound to be a lot of pent-up demand."

But Barron admits that he doesn't have a crystal ball.

"It's all a guess," he said. "Nobody knows."