Demand for U.S. and Canadian office space is starting to perk up and "the phone is starting to ring again" as confidence in the economy builds, the head of Brookfield Properties Corp. said Wednesday.
For the past year, there has been very little activity in the property market, particularly on the leasing side, but things seem to be changing, chief executive officer Ric Clark told Reuters.
"We're starting to build confidence that the market has in fact bottomed out. There was a big bid-ask spread between what tenants were willing to pay and landlords were willing to contract for and that seems to have settled out and reached a point," Mr. Clark said in an interview.
"From there, I think it's only up."
During the last quarter, the company saw some softness in demand for office space in New York, its biggest portfolio at 19.5 million square feet. Most of its core U.S. markets had experienced a rise in vacancies.
"The phone is starting to ring again. We're seeing people get a little more confidence that the Armageddon scenario that we were staring at is not going to come, and that things will start to get better," he said.
Financial institutions, which are among Brookfield's key tenant base, have also begun to hire again, which has added to the company's confidence that the market has bottomed.
In the summer, Brookfield Properties and its parent, Brookfield Asset Management Inc. , jointly announced they would launch a $4-billion (U.S.) investment consortium aimed at taking advantage of real estate prices knocked lower by the "current distressed economic environment."
"We think over the next couple of years, and it's only just beginning, we're going to see lots of opportunities," Mr. Clark said, noting that most may come from the United States.
Brookfield Properties opened its new 51-storey, 1.2- million-square-foot tower in Toronto Wednesday, adding to a portfolio that includes the World Financial Center in Manhattan, Brookfield Place in Toronto and Bankers Hall in Calgary.