Commercial Broker Quarterly: Fall 2003 - GWCAR, Greater Washington Commercial Association of REALTORS(R)

CBQ >> Fall 2003 Issue

Market Matriarch Moves On

Last month, after 15 years at Cassidy & Pinkard, Mary Petersen stepped aside from her lead role as Senior Vice President to become Senior Advisor for Market Research. The role gives Petersen more time to spend with her family, but still keeps her guiding the department she helped make an institution. CBQ asked her to share her perspectives on where she's been -- and where the market is going.

What is your forecast for the upcoming year in the DC area?

Normally, I never like to look too far out. We can never anticipate an event like 9/11 in advance, and it is public events such as that tragedy that have major ramifications for our market. We are, of course, in much better shape here in the DC area than almost all other markets. There is activity and some amount of positive absorption in most submarkets.

For 2003, there should be positive absorption on the low end of the historical range (2-4 msf) in Northern Virginia, along with a drop of one or two points in the vacancy rate.

In Washington, DC, we can expect 1 million square feet or more in positive absorption but an increase in the vacancy rate because of the delivery of unleased new space.

In Maryland, there will be negative absorption-largely because of reduced growth in funding for NIH-and a vacancy rate increase of one or two points, the reverse of the Virginia experience.

For 2004, we should begin to see reductions in vacancy rates and positive absorption as federal agency and contracting dollars, already authorized, have more of an impact on our market. The move toward balance will vary among the three jurisdictions and is expected to be gradual -- absent a major change in federal policy and spending. Many tenants are still leasing a lot of excess space and will be careful about taking on new lease commitments until it is absolutely necessary.

What is your new schedule?

That is evolving. I plan to be in one of our offices one day a week, though not on a regular basis, and to be in touch via e-mail and voicemail.

Describe the method of market information gathering in 1988 as opposed to now.

When I began working on real estate with Buvermo in the mid-1970s, information on investment properties was available from individual brokers or firms who were selling the properties.

There was a lot of "puff" about the parks and the symphony but not much hard data on lease terms and tenant demand. In summary, there has been a real professionalization and standardization of the real estate research function.

Are there any drawbacks to the modern protocol?

Information overload can be a problem! I am always downloading things I think I should read and find later in a big stack on my desk.

What was your first job out of school?

I worked in the information department of a federal agency, the Small Business Administration.

In the Washington Business Journal, it said you were writing your job description. What is the final job description you came up with?

It simply describes the major tasks of the research director as I saw them: Hiring and training good people, writing and producing our market publications, supplying high-quality information for internal use, interacting with clients and the real estate & business community, helping firm owners and managers strategize about the market and overseeing departmental administration.

How long did it take you to complete your job description/manual? How big is it?

It's not that complicated, only five pages. Everyone will do things differently, depending on their experience and their strengths. Cassidy & Pinkard is a privately-owned regional company, so there is no national "template" that dictates what we do. We can adjust for market conditions.

How did you get into real estate?

It was totally serendipitous. When my children were small, I was doing freelance writing and editing for a friend, an economist who consulted for international agencies. Through a former colleague in the IMF who had returned to Holland, he got involved in a portfolio of workout properties, and somehow that effort evolved into Buvermo, a Dutch-owned real estate investment group.

Any market trends you spotted first and people thought you were crazy for pointing out?

It is always dangerous to go back and look at what I wrote at a particular time! In 2000, there was a foreshadowing of a market downturn in Virginia, though nothing like what we experienced from the telecom meltdown. Real estate is a cyclical business and we are always waiting for the other shoe to drop.

You have been a GWCAR member from almost the beginning. Why do you think GWCAR membership is important?

I have participated in a number of their programs. From my standpoint, their sponsorship years ago of the original Commercial Market Research Council (CMRC) was an extremely valuable contribution to the research business. From a small group that compiled annual market statistics, it has become a major networking and education group for commercial real estate researchers and others, including representatives from local economic development authorities.

Do you see the market research profession changing over the next several years? If so, how?

That's hard to say because you don't usually see these things ahead of time. In the past, market research has been an entry level position, and analysts move fairly quickly into brokerage or other positions in the field. You may see more people who make their careers in market research as there is a continuing need for their information and analysis.

I read that you went to Northwestern in Chicago for college. Why did you return to DC?

I grew up in Alexandria, but my father was from the Midwest and his sisters went to Northwestern. That was one of the few co-ed alternatives when I looked at colleges in 1958! I married a classmate, we lived in Philadelphia while he was at Wharton and he came to the Federal Reserve Board to work on his dissertation in 1966. That was home for me, and soon for him, and we have never moved on.

Do you think there is enough "giving back" to the industry?

I think most firms understand their responsibility both to the real estate profession and to the larger Washington DC community.

Industry organizations like GWCAR and DCBIA take the lead on this. Our firm makes a point of being involved in industry organizations. Dave Bevirt is this year's president of GWCAR, Dale Powell and I are on the board of NAIOP, Jayne Shister is on the board of DC CREW.

It's good business and it raises the level of professionalism in the industry. We also directly support East of the River Community Development Corporation with assistance in accounting, information technology and pro bono real estate services, as well as Thanksgiving and holiday programs to benefit families in Ward 8.

Any advice to market researchers who are following in your footsteps?

Have fun!