Doing deals again.

• Author: Kaelble, Steve
• Position: Indiana's commercial real estate activity - Includes related article - Commercial Real Estate - Industry Overview

Commercial real-estate activity is picking up. Property owners become more realistic.

The commercial real-estate downturn--which wasn't all that severe in Indiana to begin with--seems to be fading into history.

That's the conclusion of an assortment of Hoosiers in the real-estate business. The outlook varies somewhat in different Indiana markets, but brokers in general seem upbeat about the present and hopeful about the future.

"Our market is very active," says Steve Miller, president of Citizens Realty & Insurance in Evansville. "The confidence is high, and people are looking to make reasonable transactions."

"We're looking for a good year," agrees Jim Lohman, a partner at Harding, Dahm & Co. in Fort Wayne. "There are certain segments that are stronger than others, but when 12/31 rolls around, we believe it will be a better year than 1991. We've got a lot of things on the books and there are people looking. The market seems to be optimistic."

Christopher Davey, president of Cressy & Everett Commercial Co. in Mishawaka, also gives his area's real-estate scene high marks, adding that he never felt too bad about it. "We never really experienced a downturn. We're still really healthy up here."

The climate also seems especially favorable in Indianapolis, where a 1991 marked by a lot of "tire kicking" has turned into a 1992 full of deal making. That's an assessment shared by David Goodrich, president of the F.C. Tucker Co.'s Commercial Real Estate Services division, and Michael McKenna, vice president in charge of the local office of CB Commercial.

"We are having an exceptional year," says Goodrich. "Our commercial brokers' volume in the first six months exceeded all prior first-six-month periods. We could top 1991, which was the best year we've ever had."

What's made the difference for 1992? If more deals are being done, to what can the improvement be attributed? One factor may be improved confidence in the economy. The statisticians have declared the recession over, and that change in mood may have been enough to get some of the real-estate procrastinators into gear. "We're starting to see some of the tire kickers actually commit," Goodrich notes.

"Some people who were holding off making decisions in the last 12 to 18 months are finally making decisions," agrees McKenna.

In addition, Goodrich says, the notion of real estate as an investment--which had gotten a black eye during the free-fall of property values in some other regions--is getting some attention again. That's yielding some deals. "We're beginning to see properties attracting interest on the part of both local and national investors. We will see a pickup in the investment end of the business."

But there's also a sense that some sluggishness in the real-estate business was the fault of sellers who were hoping to get more out of their property than was reasonable. Goodrich thinks some of these sellers are coming around. "We're seeing some of the owners of troubled properties getting more realistic about the values of their properties."

That realism hasn't yet settled in everywhere, says John...