Now is the Right Time for Buyers
Buyer’s market vs seller’s market, credit crunch vs market correction; who should you believe? Here are some specifics:
1. The recent economic problems have staggered Wall Street
2. Main Street is bracing for a “trickle-down effect”
3. The credit crunch is creating panic for those looking to borrow money
4. The flow of money from bank to bank has slowed
5. The Fed is trying to curb fears across the financial spectrum
6. Bailout plans are in the works, but it will take some time for their full effects to be felt
Opinions are running rampant regarding the current state of affairs in all business sectors, including commercial real estate. Is this the beginning of a problem? The middle? The end?
What is certain is that now is as great a buyer’s market as any. Commercial space vacancy is at a three year high, with landlords and builders searching for tenants to occupy open spaces. Unoccupied commercial spaces in the suburbs are up roughly 2% from a year ago. In Chicago, office building vacancies topped 10.7% which is the highest percentage of vacant office space since 2002.
Advantage: buyer.
We have already seen rents in the suburbs come down in price from the second quarter average of $22.54 per square foot, and many real estate experts expect to see the price decreases continue. In the city, property taxes on commercial properties are comparable with those of residential lots. Combine those two seemingly different data points and a trend emerges; everyone with a vested interest in filling commercial spaces, landlords and local governments included, are trying to do everything in their power to entice tenants to buy and rent.
What does this all mean? Now is as good a time as any to search out realty opportunities that satisfy your business needs. The downturn in the economy can be seen as an opportunity for those firms willing to invest in a change of scenery. Whether it is upgrading or downgrading, building new, or retrofitting; today’s marketplace is riddled with commercial real estate opportunities for companies of any size.
Labels: bailout, buyer advantage, buyer's market, Commercial Real Estate, credit crunch, main street, wall street
posted by VJG @ 1:28 PM
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2 Comments:
Thanks for the information. Are there tips you can put out there for people to learn how to invest in real estate better?
Good luck.
Today is a very interesting and opportune time for the user/investor. Most financial experts will concur that in today’s market “cash is king”.
If you have a need and the cash, there is no doubt that opportunities abound. This applies in almost all business related real estate acquisitions and even more so on the residential side of the equation.
From a purely investment point of view things get a little more critical and speculative. The best way to pursue any investment today is on the basis of a long term hold. Meaning, if one buys something for purely investment, not specific use, one must have the where-with-all to financially maintain it for the near and possibly long term. That term is clearly dependent upon ones interpretation of the depth of the economic down turn.
There are no easy answers, but there are some exceptional opportunities. It is incumbent upon the investor to do his research and due diligence prior to any acquisition.
V. Januskis
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