“For every thing there is a season” – Ecclesiastes or Pete Seger, take your pick.\u00a0 The saying is true as all things go in cycles, especially business.\u00a0 Investments such as the stock market and real estate are constantly changing. Just when you get to thinking that you are an investment wizard, the cycle cranks around again and you find that you aren’t so smart after all.<\/p>\n
This lesson has once again been vividly spot lighted since the last half of 2007 and so far\u00a0in August 2008. When this slow down portion of the cycle will start to\u00a0turn towards the upward swing is still not very clear.<\/p>\n
Mortgage brokers and agents are dropping out of the field like flies.\u00a0 Companies are closing up\u00a0right and left leaving vast empty office suites in their wake.\u00a0 Some entire buildings in Orange County\u00a0have become see through buildings just like we used to have in the 1970s and in portions of the 1980s.\u00a0 Cars, steaks, trips and cash are being offered as inducements to lease an office space.\u00a0<\/p>\n
One would think that Orange\u00a0County\u00a0commercial real estate is dead, dead, dead.\u00a0 Interestingly enough, it isn’t.\u00a0 Just try really low-balling a price on some investment property and you will be shocked to find that the seller may not even take the time to respond to you.<\/p>\n
Sure prices have come down from\u00a0those\u00a012 or 18 months ago.\u00a0 However, they haven’t plunged and the properties have not wound up in banks REO inventory.\u00a0 Sellers are hanging tough, at least so far.\u00a0 They aren’t panicing and they aren’t selling or leasing at just any price.<\/p>\n
One could say that commercial real estate in Orange County is selling like hot cakes.\u00a0 Sure, maybe like hot cakes at a Weight Watcher convention, but still selling.\u00a0 Sellers will\u00a0cut a deal that gives the buyer a small cash flow but that is\u00a0really\u00a0all that has happened.\u00a0 Owners are convinced that Orange County\u00a0real estate has tremendous intrinsic value and they aren’t giving it away.\u00a0 After almost a year of soft\u00a0sales and tough financing issues, prices are still hanging in there.\u00a0 At this point I don’t think things are going to change very much\u00a0in the future either.<\/p>\n
I haven’t seen any indications that sizzling deals are soon to follow.\u00a0 Commercial properties have been sold with fairly large\u00a0down-payments\u00a0in order to get the property financed, unlike single family homes.\u00a0 This gives owners a solid cushion of safety before their properties start running negative.\u00a0 Right now it looks like it is more likely that the properties will become hot again rather than the deals will become sizzling.<\/p>\n
The question to ask oneself is where else other than real estate would you rather invest your money for the long run?\u00a0 Where else would you rather have your money invested if inflation really kicks up again?\u00a0 From the looks of the commercial marketplace in Orange County, the answer is clearly real estate.<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
“For every thing there is a season” – Ecclesiastes or Pete Seger, take your pick.\u00a0 The saying is true as all things go in cycles, especially business.\u00a0 Investments such as the stock market and real estate are constantly changing. Just when you get to thinking that you are an investment wizard, the cycle cranks around […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[45,80,82,90,105,126,139,146,155,164,172],"class_list":["post-29","post","type-post","status-publish","format-standard","hentry","category-commercial-property-prices","tag-commercial-marketplace","tag-inducements-to-lease","tag-inflation","tag-investments","tag-low-balling-a-price","tag-orange-county-real-estate","tag-real-estate-cycle","tag-real-estate-commercial-real-estate","tag-reo-inventory","tag-running-negative","tag-sizzling-deals"],"_links":{"self":[{"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/posts\/29","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/comments?post=29"}],"version-history":[{"count":0,"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/posts\/29\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/media?parent=29"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/categories?post=29"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swartzcre.com\/observations\/wp-json\/wp\/v2\/tags?post=29"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}