For many would-be investors, the commercial real estate industry offers some painfully ironic obstacles. The market has become a repository for high-quality properties for investors. Unfortunately, these potential buyers are stymied by some banks that are still unwilling to finance acquisitions. (However, the CMBS market is alive and well and getting very active again.)
Great properties at fair prices are readily available – but the availability of financing hasn’t kept up. It’s like that classic episode of the “Twilight Zone” where the extremely nearsighted bank clerk trips over some rubble and breaks his glasses just after being blessed with all of the time in the world to read – “That’s not fair. That’s not fair at all.”
However, it is only a matter of time before the economy reaches a high enough degree of stability that lenders re-enter the real estate arena. And it seems as though the economy is on the right track.
March saw the first meaningful job additions to the economy in more than three years as a net 162,000 new workers (payrolls) were added to the economy. Furthermore, the unemployment rate has remained fixed at 9.7.
Are things perfect? Not by a longshot. But even if you can’t capitalize on commercial real estate investments right now, that doesn’t mean that those deals are just going to disappear. It just means that for those who need financing (by and far the vast majority of real estate investors) now really isn’t the best time to buy. But if you have the cash to do it, now is the best time to buy!
