DEVELOPING SITUATION.

• Author: Speizer, Irwin
• Position: Statistical Data Included

Top developers say things are looking up even though the economy is slowing down.

Business has been good for North Carolina developers. Just ask them. We did, picking a major player from each of the state's three biggest metro areas: Charlotte, the Triad and the Triangle. All say they have seen only a modest pullback of commercial development despite signs of a slowing economy. They are generally bullish.

All speak somewhat approvingly of Smart Growth, the latest trend in municipal planning. It tries to corral development into more easily serviced areas and slow sprawl. That kind of planning is a good idea, they say, because it makes better use of resources and infrastructure. But all note that there is confusion over what the term means.

The developers are:

Smoky Bissell, 64, chairman and CEO of The Bissell Companies Inc. of Charlotte. Bissell develops commercial and residential real estate, mainly in Charlotte. Over the last five years, he has built 1 million square feet of office space in Ballantyne in Charlotte.

Craig Davis, 44, chairman of Craig Davis Properties Inc. of Raleigh. The company does business primarily in the Triangle and the Hampton Roads region of Virginia. Among its active projects are 500,000 square feet of office space in Venture Center at N.C. State University's Centennial Campus in Raleigh.

Coolidge Porterfield, 59, president of Starmount Co. of Greensboro. The company operates in Greensboro and in the Triangle. Among its recent Greensboro projects are a 100,000-square-foot office building in Green Valley Office Park and a 75,000-square-foot headquarters for Cone Mills Corp. Porterfield also is chairman of Forward Guilford, the development arm of the Greater Greensboro Chamber of Commerce.

BNC: How strong have development and construction been in your markets?

Bissell: I have been in business since 1964 in Charlotte. Last year was probably the strongest we have ever seen. We had more office space absorbed in the Charlotte market in the year 2000 than ever. But the fourth quarter was weak. We probably had the least fourth-quarter absorption since 1996. There is definitely a trend there.

Davis: We continue to see strong growth in all sectors, with highlights on office, industrial and residential.

Porterfield: It has been very good. We are fortunate in that we have what we think will be the premier office park in Greensboro. There is also a lot of competition. The airport sector has been relatively slow in the last year in terms of construction. But it is probably also a healthy area.

What do you foresee for the coming year?

Bissell: It will be a good year, but it won't be as good a year as last year. My outlook is still very bullish. We saw twice the number of prospects in January and February this year from last year. I haven't signed up any of them yet, but we are seeing a good flow. Office will have a so-so year. I'd say it would be down maybe 20%. In industrial, you won't see as many starts. There are a lot of things that affect that. Just-in-time deliveries really require less inventory. People are trying to cut inventory. If they do that, there is less need for space. Retail is generally fairly healthy. You have a lot of these big-box stores that go out. When they do, it is hard to fill that space. But retail is really fairly healthy. Multifamily -- that is where you will see the softness. You can drive around now and see the two-months-free-rent signs. Residential will probably be flat with last year.

Davis: We foresee continued growth in the Raleigh-Durham market, which we really think is somewhat recession-proof, although people are starting to think more about their decisions. From our standpoint, we almost have to be a year to a year-and-a-half ahead of the market. We are seeing no real lack of demand relative to industrial and office. We are seeing some soft spots in apartment segments. But in some of the hot segments, it is still on fire. There is more research and development, more education, more government services. The office sector, on a scale of 1 to 10, is about a 7. Industrial, which is really light-assembly here, is a solid 7. Retail is an 8. Apartments, a solid 6. Residential has been off the charts at a 10, but I think you will see that come back to about a 7. We see a good, solid growth line for the next 10 years.

Porterfield: Retail is probably overbuilt in Greensboro. I look for very few additions. The office market will be a little soft. I don't think you will see many starts. Most of the growth in Greensboro is coming from within rather than from without.

What impact do you see from the Smart Growth movement?

Bissell: There is a push toward Smart Growth. But when you ask for a definition, some say it is new urbanism, others say it is clustering...