This week’s perspective is provided by Jim O’Connell:
HERE’S WHAT I THINK
This morning the WSJ’s main headline was “Wary Fed is Poised to Act” and went on to describe how the general economic outlook was dimming and the Federal Reserve was ready to react to bad news. Later in the day the Real Estate Investment SmartBrief reported “Fed says economy is stumbling but maintains policy” which in short means that the Federal Reserve decided against using any additional measures to stimulate economic growth despite the faltering U.S. economy. So how does that reaction match-up with the prediction of concern? It doesn’t really matter which side of the political aisle you’re on, it’s hard to argue that the overall general economy isn’t getting better at a pace that anyone feels good about. Slow job creation and low consumer spending measures do not predict things getting better any time soon.
As for our commercial real estate industry, I think that from an overall perspective, things are still in decent shape as we continue to see transaction activity take place. Sales of stable assets, value add assets and everything in between would seem to point to a relatively healthy 2012, or at least as compared to the last three or four years. With interest rates still as low as we’ve seen in this latest cycle and no sign of increasing any time soon, I still look for investment capital to make its way into the commercial real estate markets and take advantage of good returns as we continue through 2012.
Don’t let the negativity of the mainstream put a damper on our sector’s progress. Continue to seek out offerings that satisfy your criteria and make the acquisition. At the numbers we’re seeing for prices and borrowing rates this continues to be a time of great opportunity.