Analysts Say Commercial Real Estate Is Bouncing Back
May 9th, 2011
Rusty Tamlyn, senior managing director at a commercial mortgage banker and property broker in Houston, is tired “of watching paint dry.” And it’s a good thing, because according to many analysts commercial real estate is in the early stages of a real recovery and commercial activity is on the rise[1]. Although employment numbers released last week seemed to indicate otherwise, the economy does appear – at least to a significant portion of real estate investors and developers – to be stabilizing again in some parts of the country. As a result, developers are making plans to build in 2011 and 20112 and Tamlyn is “busy again.”
In Houston, commercial transactions rose by 44 percent in 2010 with industrial, mall properties and promisingly situated office buildings leading the pack. Tamlyn reports that real estate investment trusts (REITs) and pension fund advisers are active in Houston looking for “core properties” that they believe will hold value and appreciate in the new market. These properties tend to be new office towers, grocery-anchored shopping centers and multitenant warehouses, he explained.
When investors are looking for areas with commercial potential, they are looking for areas like Houston. Job postings are up 37 percent in that city and some companies are hiring recruiters[2]. Sales tax receipts are on the rise, and construction is once again moving forward in the area.
Do you agree that this is the right time to get involved in commercial real estate investing again? What signs do you see to support your view?
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[1] http://www.chron.com/disp/story.mpl/business/7556230.html
[2] http://www.chron.com/disp/story.mpl/business/7556240.html
May 9th, 2011 at 11:55 AM
It is if you have the cash to buy and hold. You look at who are looking at commercial real estate right now, and it is the deep pocket groups. they can buy now and ride this market for another 5-7 years without having to go belly up because the buildings they are buying are only 50% occupied. this is a long term bet, and if you don’t have long term money, you might want to stay away from the commercial real estate market.
May 10th, 2011 at 6:20 PM
It does not take 5 years to lease most commercial properties even if they are 50% leased.Eighteen months is the norm. Commercial real estate is a much better bet than stocks and metals which are over priced.