Saturday, April 17, 2010

Sounds like it is now time to buy.......

The Global Real Estate Monitor reports:

"U.S. Industrial Property Review: Sector outperforms
other property types.

It may not be considered the sexiest or most exciting
property type, but industrial real estate’s stability and
growth opportunities in 2010 put the sector head and
shoulders above other types of commercial property."

Faithful readers will recognize that I believe insanity
ruled the investment real estate market from about
2003 to 2007. For various reasons, intelligent buyers
paid way, way too much for investment property.
Likewise, intelligent lenders lent way, way too much
on those same investment properties. Our current
economic situation is in large measure due to the
exessess in the real estate world.

I am hopeful that sanity has returned to the market
place and real estate will once again become the dull,
but steadily profitable, investment it once was.

You can read a longish article about smart people
predicting a rebound in investment in industrial
real estate here. All markets are local. I know there
are some very attractive opportunities available in
ours. Historic opportunities. It is hard to predict bottoms
and tops of markets. Even if we are not at the bottom, I
will be very surprised if we don't look back on this month
a year from now and say, 'sure wish we had bought that'.
The trick is being able to carry the investment until a
tenant comes along to rent it. Timing may not be
everything, but it is pretty important.

The article in Global Real Estate Monitior says:

“In my opinion, the biggest story for industrial is the
supply side – we’ve never seen so little industrial
construction,” Moore says, pointing out that occupier
design-build business has halted. “When demand
returns, the vacancy rate will come down very quickly.”

and this as well:

"Moore forecasts a further increase in vacancy early
this year, although at a much reduced rate, with
vacancies reaching a plateau as early as the second
quarter. With almost no construction coming onto the
market and forecasts for continued economic growth
over the next few quarters, occupancies should begin
to rise by midyear and show firmer fundamentals by
year-end, he says. Rental growth, however, is not
likely during 2010, and many markets may have to
wait until 2012 before rents start to rise."

It is my firm belief that investors make their money
when they buy. I think a whole bunch of money is
going to be made this year.

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