PHILADELPHIA-Speaking to a crowd of over 400, the panelists at RealShare Philadelphia, held yesterday at the downtown Marriott here, echoed the cautious optimism that has been expressed in industry circles since the start of 2010. Keynote speaker Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services, said that despite a yield curve that could signal an emerging economic expansion, the fundamental pace of recovery has been “very anemic.” He added that, “Temporary job trend data reflects positive momentum, but employment growth is not expected to gain momentum until 2011 or 2012, at which point indicators point to a nice recovery.” According to Nadji, the flight to quality has been playing out in fierce fashion, with multiple offers on B-plus or above assets and almost no interest in lower tier properties.

On the distress front, Nadji said that “sales have been few and far between.” He added that while there are a “tremendous number of maturities coming due, once the workouts are factored in that number won’t be nearly as high.” And on a brighter note, the real estate industry should look to the future, namely the 80 million Baby Boomers and the subsequent 70 million Echo Boomers, who will have an enormous impact on commercial real estate.

Nadji’s presentation was followed by a second keynote in the form of Peter Linneman, managing principal of Linneman Associates. He noted that despite Philadelphia’s tenant trifecta–healthcare, pharmaceutical and education–the city is “still a cesspool of corruption and political ineptitude. He cited the fact Philadelphia has no snow removal plan in its budget as an example of the “good enough is fine” attitude. “How can the city not budge for snow removal? The last I checked we aren’t in Miami,” Linneman said.

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