We have now eaten the six months of 2021.
At Costco, Christmas decorations are adorned with red, white and blue leaf cakes! But I deviate.
Anyway, I thought it would be fun to take a look back at what this year has brought and what we’ve seen in the 2021 review. It’s a good idea to get rid of the cluttered conscience on a regular basis, so thanks.
A year ago, we received great news regarding the transactions we were processing. At the end of the due diligence period, the buyers abandoned the contingency and closed the escrow on July 17, 2020. boom! Why am I mentioning this? As you can see, this offer originally started in February 2020. It’s a good time.
We immediately received an acceptable offer and contracted the property just in time for the country to hit the pause button. As you can imagine, trading surged and resumed in June 2020, pending commercialization.
Our new timeline proved to be far-sighted as the buying activity returned with vengeance. Frankly, the rise in industrial demand has not stopped. If anything, it’s more bubbling than a year ago. but why? Manufacturing and logistical issues were seen as critical. Spare parts were needed for things related to houses and cars.
And because people were stuck at home, they would look at their computer screens and spend hours ordering products. All of these factors have led to explosive growth in trade for companies that manufacture and ship goods.
What is taking so long? I had a pleasant conversation yesterday with the moving and warehousing company I network with. He had just visited an Inland Empire tech company that was in the midst of transition. Apparently, the decision was made to work mostly remotely, so there is no need for a bank of old huge office suites. They are trying to find a surrogate to replace their lease. This is a classic example of decisions made by office residents throughout 2021.
With a clearer path (until the next speed bump), people start to return to the office – or not. Get a more accurate picture of the exact amount you need to mine a square foot. However, the upheaval of the markets induced by the blockade introduced some uncertainties. A decision block has occurred. Long-term contracts such as multi-year lease renewals will be postponed.
Wayne Gretzky said, âI skate in one place, not where the puck was. It’s a popular quote because everyone vividly describes what they want to do, but they don’t know what to do. You might be wondering what does this have to do with commercial real estate? That’s it: it’s almost impossible to predict where the rents and selling prices will be in the next few months! Especially if the inventory is planned or under construction.
Of course, the price will be higher, but how much will it be? The heavy burden falls on commercial real estate practitioners who must provide appropriate advice to their clients. After all, I don’t want to leave the shekel on the sideboard. However, vacancies are expensive.
So if pushing it can cause an occupancy delay, is it worth the cost? During this time, I generally recommend that the prices be decided, but unfortunately, it’s a bit of a crackdown. Residents like to negotiate established issues and “tell me what it’s worth”.
Let’s do this again in January of next year – predictive rather than pandemic – and see how precise we were.
Allen C. Buchanan of SIOR is Director of Orange Lee & Associates Commercial Real Estate Services. He can be contacted at [email protected] or 714.564.7104.
With the crazy real estate year 2020 in mind, what does the rest of 2021 have in store? – Presse Lien Enterprise Source With the crazy real estate year 2020 in mind, what does the rest of 2021 have in store for us? – Company press