Shopping center owners, law firm landlords are hit hardest by online growth: VIDEO

New York /
Apr.April 05, 2012 09:00 AM

Boston Properties Chairman Mortimer Zuckerman appeared on CNBC’s Fast Money Portfolio yesterday evening to offer his thoughts on how the growth of the Internet is affecting the commercial real estate market (see video above).

Zuckerman said that retail owners will suffer the greatest damage from the shift, as consumers increasingly make purchases online. “A lot of these large stores are going to lose some of their attraction for both their operators and indeed for shopping centers,” he said.

But the billionaire, who earned nearly $10 million last year, was less certain as to how exactly it would affect the market for office space, although he suggested that commodity space, with large floor areas, could go out of fashion.

Among his own tenants, law firms seem to be most affected by the shift towards telecommuting. “Law firms are doing a lot of things in research and everything like that on a distance basis,” he said. “They’re not hiring the same number of people so law firms themselves are consolidating their space and they’re one of the major tenants in downtown areas of cities where we have our buildings.”

However, he was quick to point out that because he owns “‘A’ buildings in ‘A’ locations” the occupancy rate doesn’t falter even as rents might.

Finally, Zuckerman said he thought the worst of the real estate downturn was in the past, but that the market is far from an uptick. “We are being very careful and cautious, but [the downturn] also gives us frankly some buying opportunities.”


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