Developers, Investors See Continued Downturn

Benjamin M. Reznik, chairman of JMBM's Government, Land Use, Environment and Energy Department, notes that the majority of those who participated in the survey "have strategies for surviving the recession and are positioning their companies for future growth." Reznik's department oversaw the survey, which asked the participants, "Where do you see opportunities in the current downturn?"

Specific projects and responses varied widely, but nearly all respondents "are seeking to maximize the performance of their current portfolios and looking for opportunistic acquisitions that fit their long range plans," according to the law firm's analysis of the survey results. As an example, 65% of respondents indicated that they felt that it was a good time to entitle or re-entitle projects. Reznik explains that the reasons for the responses regarding entitlements "include the belief that municipalities need the additional revenue that development can provide and that zoning authorities are likely to be more accommodating during tough economic times."

The survey asked the participants what role distressed assets play in their strategies for 2009. Some 70% indicated that they were seeking to acquire distressed assets, even though 54% believed that the value of those assets could fall further.

Acquiring debt was at the top of the list of challenges currently facing survey participants, notes Reznik. He says the survey indicates that developers and investors "are preparing to take advantage of opportunities as soon as the pipeline reopens."

The survey included responses from 79 principals, partners and senior executives, with 51% identifying themselves as developers and 32% as investors. Reznik leads a team of 25 lawyers who comprise the Government, Land Use, Environment and Energy Department at JMBM, many of whom are former city planners and administrators of public agencies.