6 Commercial Real Estate Investing Predictions for 2013

[Jeremy Cyrier]

I just posted a new pdf report entitled "6 Commercial Real Estate Investing Predictions for 2013 and Beyond" and thought you'd like a quick summary of what's inside.

1. Tax Changes Gives Investors Pause, Causing More Conservative Underwriting
2. Apartment Investing Remains Hot
3. Retail Recovers and Resizes
4. The Land Market Heats Up for Home Building
5. Office Demand Realigns with New ?Work Trends
6. Industrial Holds Steady with Modest Gains

What do you see happening this year?

[Paul Falbo]

If you look at the last major down cycle in commercial real estate, the RTC days, that down cycle lasted 7 years. Arguably, it was caused by loose lending practices, and over-development.

Fast forward 16 years to late 2006. Add seven years for history's sake, and one might erroneously assume we are coming out of the "down cycle. "

Then, lets add for a few additional culprits: easy money (our old pal), over development (another old pal), consumer confidence, global markets, technology, emerging markets, government regulation, consumer paradigm shifts, unemployment, aging infrastructures, and political paralysis, to name a few; and we can easily argue for 8, 9, 10 years of down cycle.

We are in our 7th year of down. Most markets are seeing flat growth, big boxes are becoming smaller, office building demand is weak, mom and pops are going away, or gone....and only the strong are surviving.

Sure, one can point to Texas and other select states and tout their employment and growth records; but, they've got shale.

4 more years of government growth? Higher taxes? Higher capital gains? Internet sales vs. sticks and bricks? Virtual offices? Regional warehousing for distribution? Higher fuel costs?

My humble prediction is 2015 will mark the start of a commercial upturn for the small and medium small investors. That's not too far away. There's a bunch of money already in play. Patient money.

We've been down so long, everything is starting to look like up.