Market Updates

Several recent articles explain our current and projected state of the industry. At this time reports are in conflict, some feel that the economy is on the upswing while some feel that we have not hit bottom. The view can be argued either way depending upon local economy and activity. Reports from Fox News and CNBC reveal that the upswing or continued down turn are becoming more centered in a micro economic standpoint and can be traced to individual markets at this point.

The Kiplingler report recently discussed current trends. The sales for commercial have continued to slide for 6 straight quarters. Estimated vacancy being 17.5% for office and 15% for industrial at this time. Forclosures are expected to climb for commercial by and estimated 25-50% due to maturing loans that were put in place during 2005-2007 in an inflated market. Since 2008 there have been 190 banks that have failed due to these loans for the most part and Kiplinger projects that that number will increase by 350 through 2014. Interest rates continue to remain at all time lows which is leaving a strong upside in deals for investors, especially those with large cash downpayments or no need for financing.

Good News Friday reports that the coomercial sector still remains troubled, 8.4 million jobs that were lost in the downturn will not return and commercial real estate must recapitalize as it did in the early 1090's. We are getting close to recovery, but a slow recovery is projected and prluections still show continued vacancy and closing for the next 18 months.

My thoughts are that we will see trouble as well as upswings in different markets. I have personally noticed the strong need for leases as opposed to sales from recent years. There is a movement and the local economy is trending up, but very slowly. There are some troubled properties and loans but this is leaving room for private investors to make a move. We are seeing several distressed sales and although the properties themselves are in management distress, the future upside is growing.

There are a lot of deals coming on line and a patient investor is now able to thrive in the current environment. I still think there is a rough road ahead but positioning investments now will create a very bright future in the coming years.