2012 Commercial Real Estate Outlook: Conclusion
After this broad analysis of commercial real estate as an investment opportunity, do you understand why you must look at every aspect of the global economy when making a decision to purchase any asset? This same analysis must be applied when making an investment decision on stocks, bonds, oil, gold, real estate, or cash.
You must think about where prices are today, how the world economy and capital flows will be moving in the years ahead, and who will be willing and able (able is very important when an investment must be financed) when it comes time to sell.
I believe investors purchasing commercial real estate today are not taking all these factors into consideration and they are overpaying for property. This is currently masked by the extend and pretend program holding properties off the market, the shadow inventory of single family homes, artificially low interest rates, and the stock market’s recent rise - taking consumer and business sentiment higher with it.
As Warren Buffett once said, “it is only when the tide goes out that you see who was swimming naked.”
I believe there is a storm coming for the commercial real estate sector between 2013 and 2016 that will provide the greatest buying opportunity in American history. When the real inventory begins to hit the market and investor sentiment begins to plunge, along with an economy that is not recovering, there will be a brief window that will open for patient and courageous buyers.
Over the past 5 years, I have spent a considerable amount of time working to prepare for this coming storm. I will continue to monitor and update you with events occurring in the commercial markets on a daily and weekly basis. For those that are psychologically strong enough to protect their capital today while surrounded by euphoric market sentiment and put their capital to work when everyone is afraid, I look forward to an exciting journey with you ahead.
For a complete outlook on the residential housing market, please see:
For a complete outlook on the global economy and markets, please see: