Chase the market or make the market?

Jag Grewal

There’s a new shift in pricing.

There are many commercial property owners who have got their head in the sand and are still hoping that this economy will change drastically.  Tantamount to getting an oil tanker heading to the South Pole to turn on a dime.  It’s going to take a while to do it.

The point is, the sooner property and land owners recognize and embrace the facts of the market, the better.  Here are the facts:  you are competing against owners who bought buildings at deep discounts and are out marketing the properties at significantly lower lease rates and/or you are competing against owners who have realized that a dollar coming in the door is one less dollar they must find to go out the door and making deals to generate any income at all.  This is the free market and this is the reality.

Consider this chart and decide whom you wish to be, Property Owner A or Property Owner B.  At any fixed point in time, Property Owner A is always pricing just above the market and Property Owner B is just below the market.  Property Owner B will get the tenant, almost guaranteed and as we move forward in time during a down market, he will continue to get the tenants while Property Owner A continues to chase the market.

Can you tell me, what other options than pricing in front of a down market is there.  The idea here, is to beat the market, you cannot pick the market.

Polical changes in the United Kingdom – is the world-moving center left?

Ian Black

Are we to take any lessons from the current political changes occurring in the United Kingdom, where the voters appear to be tired of the right side and the left side of the equation and have stumbled into a political arrangement that may help to avert a crisis.

The leader of the Conservative Party has cut a deal with the Liberal Democrats to build a center right coalition. Both Parties have had to sacrifice their different ideologies for a pragmatic platform that can trim the welfare state and raise taxes while still funding the things that lead to long term growth.
When pragmatism replaces ideology things might change.

Commercial Short Sale Seminar Review

I never thought I could sit and listen to two attorneys, a commercial real estate broker, and a mortgage broker for over two hours without fidgeting.  However, last night I and about 30 other interested parties did,  intrigued by the comments of our own Jag Grewal, Jo Ann  Koontz and Chris Boss with Yesner and Boss, and Brad Cox  with Thomas D. Wood & Company, bringing us up to speed with what is, in fact, becoming the raison d’etre of the commercial real estate industry.

As I continually remind those out there who still listen to me, in all my 46 years in the commercial real estate business I have never encountered market conditions such as those that exist today.  Our panelists treated us to the intricacies of closing real estate transactions when the mortgages exceeds the proposed contract price.  In other words, selling a property that is “underwater”.

I am sure that I speak for most of the audience, which interestingly enough comprised a good cross section of real estate investors, owners, attorneys, brokers, and hotel owners, that we all came away with a better understanding of what is fast becoming the norm in trying to close commercial real estate transactions.

We are planning on holding more of these seminars and if commercial real estate is your shtick, you owe it to yourself to come to our next event.