Pulling the Trigger

There's a lot of commercial activity out there, but much less in the way of signed contracts.  It's no longer that people don't think they need more or different space, but rather a tentativeness about committing to any expense that might not be necessary.  So they make appointments, they look, they ponder, and then they dither.  And dither. And dither.

An old real estate adage says that "Time defeats you".  When you wait long enough, you can always find a reason not to do something.  When you jump on an opportunity right away,  you may make a mistake, but you can often find a way to make it work for you.  Now, while the economy seems to have avoided the dreaded "double dip", and while interest rates and prices are so low, is the perfect time to make a leap of faith.  When you look back years from now, you'll be happy that you did.

Heading into the Election

Some things change from election to election, but some things don't seem to vary.  One constant is that the sitting President, and his party, try to make the economy look as good as possible, for obvious reasons.  My friend Ray Fair, in his economic research, has a regression model showing that the incumbent is heavily favored, and statistically almost certain to win, if the economy is good or improving.  By those odds, Obama would seem to have the advantage, at least if you are talking to real estate professionals (although they are much more likely to be Republicans in general!).

And how does a President, or the legislative branch, go about making the economy look better?  One way is to make sure that interest rates don't go up.  As we have seen, they have just gone down again, and are now at their lowest rate in 60 years.

For commercial real estate, that means that both investors and users should be looking for product now.  They cannot count on getting the kind of financial help that low interest rates provide for much beyond the election.  Given the length of time that it's been taking to close a commercial transaction, time is of the essence.  Act now!