The following is an excerpt of a story from CoStar, written by Mark Heschmeyer, published June 6, 2012. The original article is available here:

This week’s disappointing job growth numbers make it abundantly clear that it’s still a tenants’ market out there and no amount of aspiring to the contrary will make it easier for landlords fighting to attract and retain them.

The job news “is an obstacle and a cautionary line creating uncertainty in the short-term outlook,” said Carl Conceller, principal of NAI Desco in St. Louis, MO. “Landlords are keenly aware of the limited tenants in the market place and the need to maintain occupancy in a highly competitive market. Landlords will continue to be aggressive in structuring leases to capture tenants as early as possible, while blocking them from the competition.”

For the record, here’s a summary of monthly jobs number released this past week by the U.S. Department of Labor: Total nonfarm payroll employment grew by just 69,000 jobs; following 77,000 new jobs in April. By comparison, the average monthly employment gain in the first quarter of the year was 226,000.

In May, employment rose in health care, transportation and warehousing, and wholesale trade -basically the industrial sector. While construction, accounting and bookkeeping services, in services to buildings and dwellings and professional and business services lost jobs – basically the office sector.

“The report was disappointing, but not unexpected considering the negative economic news of late regarding the European debt and its potential impact on the U.S. economy,” Conceller said. “The report, in conjunction with the European debt crisis, has obviously disrupted markets and caused uncertainty among U.S. businesses.”

Larry Hausman, senior associate of Marcus & Millichap in Louisville, KY, said that if landlords were smart they would make whatever deals they can get done and still make a profit.

The job numbers don’t make prospects for the investment market very attractive either, Hausman said.

“Investors are going to shove their hands even deeper into their pockets, choosing to take their licks against inflation while staying in cash a while longer,” he said. “There will be fewer buyers until Europe stabilizes and more than 125,000 new jobs are created each month (what is needed to break even after population growth).”

NAI Desco’s Conceller had a different take on impact of the disappointing job numbers on investing.

“Investors recognize that the markets are at historic lows. The current environment provides unique opportunities to acquire investment properties well below replacement value with significant upside growth and returns far greater than can be achieved in alternate investments,” Conceller said.

“A major contributing factor to the investment market is the unusually low interest rates available to qualified investors,” he added. “Additionally, foreign investors are reallocating capital into the US real estate market because of the relative stability of the U.S. economy when compared to many foreign markets, the aforementioned report notwithstanding.”

Still, the latest job growth numbers proved to be a double whammy with little new hiring and more announced reductions. In May, the nation’s employers announced plans to cut 61,887 workers from their payrolls, the most since last September 2011, according to the latest job-cut report also released this past week by global outplacement firm Challenger, Gray & Christmas Inc. The May job-cut total was up 53% from April and 67% over May a year ago.

May job cuts were dominated by the computer industry, propelled by Hewlett-Packards announced layoffs of 27,000 workers.

“We may see more job cuts from the computer sector in the months ahead. While consumers and businesses are spending more on technology, the spending appears to favor a handful of companies. Those that are struggling to keep up with the rapidly changing trends and consumer tastes are shuffling workers to new projects or laying them off altogether,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

Mark H. Fowler, senior vice president of Weichert Commercial Brokerage Inc. in Edison, NJ, said: “The market has definitely slowed down again. Smaller tenants were showing signs of entering the market, which we had not seen for a long time. However, that began to dry up well before last Friday’s numbers.”

“We are still seeing activity from medium to large tenant requirements but the bread-and-butter transactions are lacking,” Fowler said. “I am not sure that demand will worsen as a result of the numbers but we probably face a long, slow summer.”

“As for landlords, they have been itching to raise rents but this will only delay that process a while longer, as the advantage remains in the tenant’s hands,” Fowler said.