Optimism is all around when it comes to real estate and development in Greater Des Moines. There’s no doubt that the local economy is humming and new opportunities are sprouting up all over the Metro. Take a look at our panelists’ outlooks, and you’ll see why they are so optimistic. Then, we hope you join us and our panelists at our annual Commercial Real Estate Trends and Issues Forum on April 24.

– Chris Conetzkey



Jake Christensen
President, Christensen Development
Very positive

I am very pleased with how the Des Moines real estate market weathered the economic challenges of the recession, but I am really impressed with the speed at which the market sectors have moved into growth mode. The fundamentals for each of the sectors continue to show measurable improvement, from single-family home lots, significant reductions in office vacancy rates, and demand for industrial space. The growth in downtown is the most exciting for my work, because Des Moines has made significant progress in being an attractive environment for expanding the talented workforce. The metro area is increasingly able to keep pace with the international trend toward urban living, and that is an important factor to our ability to compete in a global economy.

Rick Tollakson
President & CEO, Hubbell Realty Co.
Very positive

Although the harsh winter put a damper on home sales earlier this year, the current spring weather has shown us that demand for homes continues. Hubbell has strong traffic in all of our residential communities and strong demand for lots from our builder clients. Our apartment division continues to maintain high occupancies in all of our rental communities, and we have many more apartments under construction. Additionally, our commercial occupancies are improving, most notably in the industrial sector. Commercial brokerage remains strong, with a lot of leasing activity as well as continued interest in investment properties. Hubbell’s commercial construction division has the largest project pipeline in our company’s history. I am confident that as the Iowa economy continues to grow, so will real estate development throughout the metro area.

Gerry Neugent
President & COO, Knapp Properties Inc.
Very positive

The low interest rates available to developers and consumers continue to make real estate developments attractive. The economy has been improving steadily, with no foreseeable roadblocks.  Iowa, particularly Central Iowa, has a low unemployment rate. There is still a pent-up demand for investment properties and for expanding the new home and apartment market. Iowa leadership has been extremely pro-business. There appears to be a dramatic increase in money available from mortgage lenders. All these positives have a direct impact on an improving real estate development industry. There is some concern of interest rates increasing over the next few years. However, slow and modest increases in interest rates could be a positive in the market. It would put some upward pressure to raise rents in the office market. Although occupancy rates are increasing, the rental rates for office spaces will need to increase substantially before landlords can justify new construction. Retail and warehousing segments are strong.

Chris Murray
President & CEO, Denny Elwell Co.
Neutral

The outlook is relative. Is the glass half full or half empty? I believe the Des Moines area is poised for positive development trends and plenty of growth in most commercial and residential sectors for the remainder of 2014. In the commercial sector, lenders’ underwriting standards are reasonable and interest rates are still relatively low while demand remains constant. Consumer confidence seems to be trending upward in the retail sector, leading to expansion in the Des Moines metro and surrounding suburbs. Warehouse, industrially and flex space is also highly sought after (both new and existing) as long as it’s in the right location. The increase in new construction costs is definitely a concern that needs to be considered, as rental rates will continue to be pushed up. There will be a point where development activity holds a bit more steady as a result of this trend. This will eventually lead to a reduced amount of inventory, pushing both rental rates and sale prices up - I don’t believe this will pinnacle in 2014.