February 2009

I wanted to share a few thoughts of mine regarding the global commercial/investment market.


I am hopeful that lenders start lending and investors start buying again soon.  Very soon.  Many of you know that I am a large man in stature.  That is a nice way of saying I am big boned and have been overweight for some time since my days in athletics in high school and college.  I have been doomed to shopping in Big and Tall stores the last 35 years or so.  When I see a sale at these establishments, albeit rare, I go to look at the items available for less than retail.  When I only need one shirt, I usually end up buying five or six.  The same thing is going on in the stock market.  It is called dollar cost averaging.  Good stocks are selling for sale prices. Savvy investors are buying them at bargain prices just like when I buy my shirts at the Big and Tall.  I sense that we will see many invetors do the same thing on the sale prices available now in the global commercial real estate market.

Financing is a major problem and next to impossible to place under good property now.  I hope that lenders will become resonable again in their underwriting criteria and start to make loans again.  There are good people and good property that need this to occur before tranacations can be completed now and in the future.  Yes, there is an influx of some bad loans coming back and refinancing opportunites piling up at the usual suspects in the lending spectrum.  However, the mentality of the lending community to say "no" to valid new loans to save their own jobs and using the excuse of being overwhelmed by the bad paper/refinancing deluge is becoming stale.  The lending institutions that will be pro-active in breaking this log-jam/stalemate will boom.  There are many of us in the industry with long memories and will reward the first lenders with courage to move forward out of this malaise with solid opportunites for profits.

A final thought for this installment to my Blog.  A good friend and CCIM colleague shared this with me yesterday.  An investor we have worked with together before had an interesting bit of insight that he shared with my fellow CCIM.  The investor indicated that he will become active in securing more property for his group's portfolio as soon as the investor regrets not purchasing a property that they passed on during the last 18 months.  This particular investor and his group very actively track their acquisitions as well as those that were not acquired but were in the final cut.  I think this time is on the near horizon for some regrets.  How do you know when a market is at the absolute top or bottom?  Anyone that claims to know this absolutely is very lucky or lying.  The time that savvy investors begin to wish they had purchased particular properties will be soon.  Just like me wishing I had bought a few more shirts in the after Christmas Sale at the Big and Tall.   

Regards,  Bob Behrens, CCIM, TRC