LOS ANGELES -- The prolonged slump in commercial real estate has not been a disaster for everyone.
Among turnaround experts, property managers and leasing specialists, it's a golden opportunity.
The 1980s commercial construction boom, fueled in part by unmet expectations of the incomes that new buildings could produce, has created a large supply of troubled real estate loans and buildings.
Turnaround specialists and other consultants who restructure those financially shaky deals say they're finding increased demand for their services.
"Business has been very good," said Bruce Ballenger, a turnaround consultant who recently set up shop after working as a partner at the accounting firm of Coopers & Lybrand. "There's been a lot of calls and inquiries."
Real estate consulting groups at major accounting firms also report strong demand. At Arthur Andersen & Co. in Los Angeles, the 150-person real estate group has seen its business climb 200 percent during the last two years.
"We're running full out on these opportunities," said Squire Junger, deputy director at Arthur Andersen's Los Angeles office. "We're doing a lot of work for both financial institutions and developers."
For lenders and developers, Arthur Andersen provides property evaluation, plus income and property tax planning.
They also give advice on the best way to recoup the investment in a troubled property.
In Los Angeles, office vacancy rates are estimated at about 19 percent, and many building owners have reduced rents and offered hefty remodeling and free rent packages to lure new tenants.
As a result, experienced property managers, who basically run the day-to-day operations, are in high demand as owners try to maintain quality -- and tenants -- while reducing costs, analysts say.
"What we're finding is that a lot of developers are doing (property management) in house," said Charles Miller, senior vice president and regional manager of the property management group of Grubb & Ellis in Phoenix. "It's an additional profit center."