Ben Johnson, research manager, Grubb & Ellis/Wilson Kibler The U.S. economy expanded 5.7 percent in the fourth quarter of 2009, which means the recession is over, but recovery will be slow. Three gatherings on the economy, both national and in South Carolina, and coverage of the near future in local real estate were held last week in Greenville, Charleston, and Columbia.

On Tuesday, February 2, Brian Reed, research manager at Greenville–based CBRE/ The Furman Co., said to an Upstate audience of more than 400 he expects five years of jobless recovery, compared to the four years after the recession of 2001.

A few days later on Friday, February 5, a crowd of more than 200 assembled in Charleston for the state’s Urban Land Institute conference heard from local real estate experts Diana Permar and Jim Chaffin, who agreed on the future directed by younger generations looking for smaller homes, urban lifestyles, and sustainable communities. The baby boomer generation numbers 78 million Americans, and their children (the “echo boomers”) total 76 million, but add immigrants to the children’s population, and the echo boomers count for more people overall. “They are our housing market,” as Chaffin was quoted in the

Marshall Kibler, president, Grubb & Ellis/Wilson Kibler Charleston Regional Business

Journal.

On Wednesday morning of the same week, Columbia’s Grubb & Ellis Wilson Kibler held court in the Columbia Museum of Art, both for breakfast in the main hall and for an economics forum in the auditorium. The auditorium seats 168, and it looked full.

Robert Bach, the chief economist for the Grubb & Ellis national office, and Ben Johnson from the Columbia office began the presentation with a series of questions for the audience, all answered by the audience with remote push–button hand held devices about the size of a mobile telephone.

Robert Bach, chief economist, Grubb & Ellis Q Should 2010 be a better year in the real estate business? A69 percent said yes.

Q Do you plan near–term employee cuts? A No, 65 percent said their work force should stabilize.

Q Should the availability of credit improve in 2010? A Yes, significantly, said 65 percent.

Q How about inflation? Heading up in the next 12 months? A Only slightly, said 59 percent. Q Can we expect recovery in 2010? A No, 2011, according to 63 percent.

Q Are rents and property values still headed down? AYes, but only slightly, said 75 percent.

Q What is the largest obstacle to successful real estate dealings in the coming year? AFinancing, 49 percent; economy, 41 percent; job losses, 9 percent; and health care, 2 percent.

All the questions referred to the coming year, but the economists on stage reflected on the past year, 2009: “Flat on its back,” said the two. From a December 2008 unemployment rate in South Carolina of 5.9 percent to this past December’s 12.6 percent, flat on its back might be a euphemism.

The fear among downtown Columbia real estate interests is carried by the loss of 900 SCANA people and the evacuation of their building, more than 450,000 square feet in the Palmetto Center. For the next two years, Columbia commercial office rental rates should continue to be held down. The Columbia commercial office vacancy rate is 23 percent, but the industrial rate is only 15 percent, and the retail vacancy rate is 10.3 percent.

Once Holder Properties’ new Main & Gervais Tower and its 205,000 square feet are filled with the McNair Law Firm, Edens & Avant and the National Bank of South Carolina, all downtown tenants, there will be another empty 205,000, roughly, left behind downtown. All told, downtown Columbia has about 1 million empty square feet of Class A and high Class B office space, almost half of it in the Palmetto Center next door to the Marriott Hotel.

And USC’s law school is still planning to move, but the school has not broken ground.