How about a little good news from the real estate front: Princeton’s office market is healthier than almost every other commercial real estate market in the state.

OK, granted, there are a lot of low cards to compare to, but #b#Micky Landis#/b#, senior vice president and regional manager at Boston Properties, 302 Carnegie Center, isn’t saying things are great. They’re not. Things merely are better here than in much of the state — and way better than they were in Princeton at the beginning of the 1990s. Back in the day when investors (not real estate professionals, and that distinction is important) believed commercial real estate was a perpetual cash cow, buildings went up in and around Princeton with total faith in the “if you build it they will come” creed.

The resulting glut of unused office buildings at the beginning of the ’90s created a mess that took years (not to mention federal help) to escape. But that won’t happen now, Landis says. Office vacancies are higher than normal (the Princeton office submarket at the end of the third quarter of 2009 was about 22 percent, on average, and that’s still better than some places). But office vacancy is not the same as unused offices. Buildings are occupied now, if not full.

Until recently, a notable exception was University Square at Alexander Road and Route 1, which has just announced its second tenant, AXIS Reinsurance. AXIS and Otsuka Pharmaceuticals are expected to move into the unoccupied building, owned by RXR of Short Hills, in late spring. But the building has been unoccupied since it was built nearly five years ago (see story, page 39).

Also, Landis says, today’s office property owners, like Boston, which owns Carnegie Center, are large companies. More importantly, there hasn’t been any new building in recent years to create a glut.

Landis will share his thoughts at ACG Princeton’s monthly breakfast panel on Tuesday, January 19, at 7:15 a.m. at the Woodbridge Hilton. The panel, “Commercial Real Estate, the Other Shoe About to Drop?,” also features #b#Gualberto Medina#/b#, of Cushman & Wakefield; #b#Glen Fishman#/b# of P&F Management; #b#Robert Lieb#/b# of Mountain Development Corp.; #b#Sandy Monaghan#/b# of SJP Properties; and #b#Jeffrey Milanaik#/b# of Heller Industrial Parks. Cost: $65. Visit https://chapters.acg.org/newjersey/events for information.

The event’s subtitle might make you wonder what the other (or for that matter, the first) shoe is. Landis certainly does. He surmises that it refers to a perceived, impending collapse in commercial real estate to rival what happened in the residential market in 2008 and 2009. But there are many reasons Landis doesn’t see it happening here.

#b#All real estate is not created equal#/b#. After giddy real estate investors lost their shirts in the early-’90s bust, professional companies took over the properties. Most of the office buildings you see along Route 1 are owned by about six companies, each of which knows how to manage commercial real estate, Landis says.

Conversely, residential real estate deals are often undertaken by people with no real knowledge of how real estate works. Variable rate loans, first proffered in the early 1980s, and ridiculously liberal lending policies caught up to non-savvy buyers and triggered a major problem in the residential market. Mortgages, says Landis, eventually became worth more than the properties, and even though most of the trouble was in second and third homes rather than primary residences, the spate of abandoned properties left the banks to absorb properties, and subsequently devastating losses.

Commercial realty companies like Boston Properties don’t play in such dangerous woods, Landis says. And they are able to withstand downswings without panicking. There is simply less demand for space right now. Landis is confident that equation will change.

#b#A slipper, then more pain#/b#. Landis says that for the Princeton office market at least, there was no first shoe to drop. “It was more like a slipper.” But despite its relative health the area is smarting from corporate downsizing and consolidation policies that became the norm in 2009. Companies occupy less physical space and pay less rent overall.

Though not an expert in warehouse/industrial real estate, Landis is concerned about the state of that submarket in Cranbury. Industrial vacancy rates there are past 30 percent. What concerns Landis is that while New Jersey is doing little to court new tenants, Pennsylvania is making itself alluring to industrial tenants.

“They’re embracing development in Pennsylvania,” Landis says. “Towns here used to embrace development.” But no more. Or, if they do, they embrace it the wrong way. Landis offers Carnegie Center as an ideal. Carnegie Center is West Windsor Township’s largest taxpayer. It pays $10 million a year, which is nearly five times the bill of the runner up. And yet Carnegie Center is almost entirely self-sufficient. It collects its own garbage, plows its own snow, and provides its own maintenance. All it takes from the outside are utilities, which it pays for itself. Such development, he says, is what New Jersey needs.

Landis, who holds a bachelor’s in economics from NYU, grew up the youngest of six children in Highland Park with a combination of business savvy and social responsibility. His father, an accountant, taught him business smarts with compassion. “He spent his life helping other people build their businesses,” Landis says. “He encouraged each of us to go into business for ourselves.

Landis’ mother was a volunteer for various groups and helped found the Cerebral Palsy Association’s Middlesex chapter, based in Woodbridge. As a result, he grew up in a house routinely visited by kids with disabilities, and as a result of that, he serves on the boards of six charitable organizations.

He also teaches sports to disabled children through the national Buddy Ball program. And yes, his own kids help him coach other teens who have special needs.

In business, Landis’ help often comes via a rarely heeded cautionary message. His first career was in the food business, where he was a franchisor and restaurant developer. “I’ve tried to talk many people out of it,” he says of the food industry. “But nobody ever listens.”

Landis spent 19 years figuring out that the food business is not a good life. “I had about 20 restaurants at one time,” he says. “And I’d get a call at 3 a.m. That’s never a good call.” Especially with a family.

Landis eventually went to work for his brother Alan’s real estate company, where he served as COO. Alan Landis opened the Landis Group in the 1960s and made it a main player in the development of the Route 1 corridor. He sold the company to Boston Properties in 1998 and is still involved in real estate in the Northeast.

If the other shoe does drop, Landis doesn’t expect it to make much noise: “There will be more pain. But only for a little while.”

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