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| 建生邨商場 Kin Sang Estate Commercial Centre (Photo credit: Wikipedia) |
I believe it
will begin to return to the previous higher levels, but it will be a slow climb
back. It won’t be a rocket, more like a floating balloon. What facts do I base
my belief upon? Well…
· * If the Federal Reserve is to be
believed, rates will continue to be held low until at least sometime in 2015.
That is good news for Commercial Real Estate.
· * Commercial Real Estate inventory is
falling is key markets. That means properties are selling, and if selling, they
were priced right. Sellers have realistic expectations.
· *As financial markets rebound, lenders
will want to ramp up their activity. This makes much needed capital available
to developers and investors.
· *Companies who have restructured their
workforce as a result of the general economic downturn will be looking for
space that fits their current needs. While some of this will be downsizing,
there is always those companies who are outgrowing their current space.
· *Vacancies are slowly decreasing in
the Commercial Real Estate Segment. The theory of “supply and demand” makes
this a positive factor. However, again, this is slow moving.
· *One of the positive results of the
recent economic downturn is that regulators, city and county, are relaxing
their building and zoning restrictions just a bit. Their motivation is to stop
loss of tax revenue.
The stock
market is at a five or six year high, corporate earnings are getting stronger,
bonds are holding their own, and interest rates will remain low for at least
the short term. In my opinion, there are clear signals of the Commercial Real
Estate segment beginning a rebound.
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