VOORHEES, NJ-The economic recession continues to linger, and jobrecovery is moving at a slower pace than expected, so real estatefirms are coming to realize they need to shift strategies and workharder to generate the same revenues. Many builders have mixed-useand multifamily projects lined up, but are waiting for strongeractivity before they can move ahead.

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To get a clearer picture of how current economic conditions areimpacting builders, the Strategic Alliance, a group of realestate-related companies, conducted a business survey that coveredmore than 1,000 builders and developers and other industryprofessionals in the Tri-State and Mid-Atlantic regions, as well asPennsylvania and Florida. The survey, which was the secondsponsored by the Alliance during 2010, polled real estate expertsinvolved in the commercial, single-family, multifamily, and 50-plusactive adult markets.

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“While most builders hoped that conditions would trend upquicker this year, there are some fundamental problems that stillneed to be resolved before projects can move forward,” says BillFeinberg, president of Feinberg & Associates, PC and founder ofthe alliance.

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Not surprisingly, 66.6% of respondents indicate that the economyhas not pulled out of its slump. Although 47.3% note that thebusiness cycle for the real estate market remains in a recessionphase, 36.8% say that the market is in a recovery stage, and only12.2% see the cycle as severely down.

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A look at the current lending landscape reveals lending termsand conditions that remain tight, report 43.8% of respondents. In abreakdown, 26.3% describe lenders as too cautious when it came tocredit risk and 17.5% claim smaller banks are more willing to makeloans than larger institutions.

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The findings also reveal that 57.8% of builders see no “positiveindicators” that the commercial market is beginning to correctitself. Further, when asked to identify the most pressingchallenges in developing residential real estate today, 45.6% ofrespondents say that demand was the greatest factor, followed by33.3% who point to financing issues. In descending order,approvals/permitting, availability of land parcels and the cost ofmaterials were ranked less significantly.

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With an eye toward the future, builders are exploring newstrategies to meet buyer demands. Sixty percent say that to staycompetitive, they are shifting away from bigger traditional homedesigns to conservative pedestrian-oriented mixed-useneighborhoods. Another question showed more than 63.1% arere-evaluating their projects, planned pre-recession, from aproduct/layout/density standpoint.

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The multifamily residential market came out on top as the sectorholding the greatest potential for growth over the next year with61.4% of respondents’ votes, followed by 19.2% for single-familyand 8.7% for active adult.

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In the active adult marketplace, only 17.5% see strongpotential. Market activity hinges on improved economic and jobmarket condition, according to William Becker, president of theWilliam E. Becker Organization. “We need a large decrease in there-sale inventory to get these buyers back into the market,” headds.

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Finally, the region’s economic future hinges on its ability toredevelop older cities and suburbs. Unfortunately, large hurdlesstill exist for private-sector reuse of brownfield sites. Whenasked to identify the largest barriers, one-third pointed tocomplicated regulatory requirements. Secondly, the availability offunding was identified by 21%, followed by the legal liability forcontamination with 19.2%.

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