CHICAGO—Several years ago, the landscape was dotted withrecently-completed but empty industrial structures that, due to anunrealistic optimism, developers built just before the bottom ofthe market dropped out. And one of the most-discussed topicsyesterday at BMO Capital Markets' 10th Annual NorthAmerican Real Estate Conference was whether or not themarket had once again become too exuberant. But leaders of some ofthe continent's major REITs generally felt that a return to thosebad old days was not on the horizon.

“Historically, overbuilding is something you need to payattention to,” William Hankowsky, chairman,president and chief executive officer of Liberty PropertyTrust, said at a morning panel on developmentopportunities. But, these days, “lenders are a little morecautious,” and this tends to put the brakes on the type ofexuberance that overtook the industry in 2007. “It doesn't reallyexist the way it used to.”

Furthermore, he added, these days “customers very much wantstate-of-the-art product. They don't want that low ceiling height,”or other obsolete features, and this desire is fueling demand asthe economy continues to recover. “I don't think we run the risk ofoverbuilding.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.