Have you ever thought of investing in commercial real estate? The business is definitely on the rise and I guess it may be a good time to invest. But have you ever ponder some thoughts what it would be like investing in a real estate? This latest article will give you interesting ideas based from the author’s experience.
Today, I thought it would be fun to dissect my current workload and discuss a few random thoughts on commercial real estate that have dominated my psyche for the past few days.
Maybe, in the process of reading this, you, my faithful readers, may learn something and alter your direction to avoid a costly mistake.
Lease rates continue to astonish
Historically, an increase in lease rates trails the increase in sales prices during a market recovery. Our plunge from the peak of 2007 was swift and deep. We lost 40 percent to 50 percent of our values in a period of six months to a year.
Many of us wondered if the commercial real estate market would EVER recover. We started to see a real pop in selling prices after the tax law changes of 2012. The next three years (2013-2015) were monster years for selling price appreciation. We all knew lease rates would soon follow. But, WOW! If you told me Class A industrial lease rates would approach $1 per square foot by 2017, I would have questioned your sanity.
Surprise. We have not lost our marbles. We are there!