Ed Wulfe could not remember a worse time in real estate than 2008 - 2010. All the negative factors lined up for that perfect storm. But today the corner has turned and positive signs are showing up with population growth being the key factor.
Other key factors are an occupancy rate of 86% and stable rental rates. New retail being built and opened in 2011 will hit around 1 M Sq Ft. a huge drop from 6M in 2008 and 3M in 2009. Less space being built should push up rental and occupancy rates. Anchor tenants will play a major role with HEB, Walmart, Phoenicia and Whole Foods leading the way.
Another standout has been Restaurants. Everyone thinks they are a chef. Some well funded ones are even anchor tennants.
Wednesday, March 23, 2011
Tuesday, March 08, 2011
Shadow Inventory Keeping Transactions Down
According to Dr Mark Dotsour, Chief Economist, Real Estate Center at Texas A&M University; commercial real estate transactions are down 80% over the last three years and no relief in sight till banks get rid of their "Shadow Inventory". Dr. Dotsour spoke to this at both the CCIM CRE Forecast in February and First American Title Multi Family Forecast March 4th both in Houston. This "Shadow Inventory", with no known value, is being held by banks with the OK of the Federal Government. It seems that there could be 700 to 1,000 bank failures if this inventory was marked to market. But until that happens transactions will remain low.
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