As the editorial director of France Media's regional commercial real estate magazines and a journalist who has been covering the industry for nearly 20 years, Matt Valley possesses keen insight into today's marketplace. We recently got a chance to talk with him about his duties with some of the industry's most prominent publications and get his take on how the commercial real estate market will perform in the coming months – as well as his prediction for what 2012 holds for his beloved Atlanta Braves. Many thanks to Matt for his time and analysis.

Valley_MattHS: Give us a quick overview of the scope of your duties at France and the publications that you work on.

Valley: As the editorial director of the regional publications at France Media, I oversee the content of five print magazines: Heartland Real Estate Business, Northeast Real Estate Business, Southeast Real Estate Business, Texas Real Estate Business and Western Real Estate Business. I also serve as the day-to-day editor of Heartland Real Estate Business. All but one of our regional magazines is published monthly.

France Media also produces a twice-weekly newsletter for each of the print magazines. I work with the reporters and editors daily to develop story ideas, and I also regularly contribute stories for our online and print products. In many ways, our regional magazines are similar to community newspapers in that we have a weekly and monthly dialogue with a select group of readers who want to know what’s happening in their particular market. We cover the big transactions and the smaller deals. If we do our job well, the national publications simply can’t compete with our depth of coverage. At its core, commercial real estate is really a local business. I love what we bring to the table through our regional coverage.

HS: How do you see the commercial real estate market performing throughout the rest of 2012 and into 2013? What sectors are poised to perform well and which ones are likely to struggle?

Valley: I’ve been covering commercial real estate since 1995, and so I’ve seen the highs and lows of the real estate cycles. The Great Recession was deeper than any I’ve experienced, and the recovery has taken longer than most industry professionals could have imagined. Job growth can heal a lot of problems in commercial real estate, but we just aren’t seeing the level of robust job gains that would lead to a rising economic tide lifting all boats.

That said, what I’ve come to realize over the years as a journalist is that the market data we publish on occupancies, rents and other key metrics is useful, but investment is part art and part science.

For example, while the Detroit market is still plagued by high unemployment, there are some submarkets where it’s a smart play to own retail or apartments. Local investors who really understand their markets have a great opportunity today because the larger, institutional investors seem to be focusing almost exclusively on gateway cities. There is a lemming-like quality to investing that I don’t always understand from where I sit.

In terms of property types, the national office vacancy rate is 17.2 percent, according to Reis. That is a very unhealthy number. Companies will first have to fill up their existing overhang of space before they will expand to new space, and the latter will only occur when hiring begins to really ramp up. Companies also have become quite adept at controlling their occupancy costs, which translates into less space needed per worker.

A greater number of employees today are working productively from home, which also helps keep a lid on the demand for office space. Brokers tell me that I’m overstating that trend, but I don’t think so. As employers grow more comfortable with the idea that workers can be productive offsite, I believe this trend will only grow. Naturally, there will always be the need for the collaborative office environment. The nature of the job plays a big factor.

How bullish are investors on apartments? Well, 56 percent of respondents to a survey of real estate professionals conducted by Georgia State University in April indicated the multifamily sector held the best investment potential in the Atlanta market. The next highest rated property sectors were industrial and health care (tied for 19 percent). Only 6 percent of respondents cited the office market and 0 percent of respondents cited retail.


HS: As a journalist, what makes commercial real estate so interesting to cover?

Valley: I admire developers because they are risk takers, and they are passionate about what they do. Once you understand the real estate business, you quickly come to realize how many obstacles there are to obtaining site plan approvals from the local municipality, securing financing and actually getting projects built. There are a lot of days when developers must feel as if they are running in place. The great developers are true visionaries, and they defy the odds. If you think about it, they are responsible for building our communities in more ways than just through bricks and mortar.

HS: Friends of yours know that you are a devoted Braves fan. Peer into your crystal ball and tell us what this season has in store for the hometown nine.

Valley: The debacle of last September (the team lost 20 of its final 30 games) still stings for most Braves fans. The way the Braves came out of the gate this season — losing their first four games — left most fans with a bad case of déjà vu. But the 2012 Atlanta Braves have proven to be quite resilient and fun to watch, even when they lose. Chipper Jones, at 40 years old, is still our best hitter and getting all the accolades he richly deserves for being so loyal to one team. I’m not sure all fans appreciate just how good he really is. Young Jason Heyward has redeemed himself.

Barring injury, the Braves will be the second wild card team to emerge from the National League this year. I would love to see a World Series matchup between the Detroit Tigers and the Atlanta Braves. I grew up in metro Detroit. That would be a series for the ages for me personally.