Basic Training: These tips can help investors and owners shape up to face the unpredictable future
October 31, 2012
Commercial real estate in San Diego has experienced a dynamic market shift during
the past five years that has affected nearly every aspect of the industry.
As the slow economic
recovery remains fragile, many commercial property owners and investors wonder
if they can survive the still-shaky market. The answer is yes, they can.
The solutions for the
future are rooted in back-to-basics fundamentals. The following survival tips
equip commercial property owners and investors with strategies to successfully
navigate the unpredictable market conditions that lie ahead.
Be
Prepared
Preparation is the first
and most important step to surviving a severe financial downturn. This step is
especially critical in commercial real estate, since the industry is affected
by so many variables that are outside of property owners’ and investors’
control.
A key preparation
strategy is to monitor the capital markets and fluctuations in financing
availability and industry trends. Keeping a watchful eye on emerging patterns
can help owners and investors better understand real estate cycles and steer
clear of danger.
In addition to analyzing
industry trends, it is essential to keep track of the U.S. and global
economies. With potential policy changes looming ahead after the upcoming
presidential election, U.S. business owners should evaluate their current
strategies and assess how commercial real estate in San Diego may be impacted by legislative modifications
and the resulting global trends.
Know Your Clients
Clients can be a good
barometer for what is coming next in the industry. An in-depth understanding of
the financial markets and U.S. global economies can help companies better serve
their clients as the industry shifts and changes. By understanding and
monitoring lenders and industry niches, companies will be better prepared to
change gears, secure different types of lending sources, and adapt to lenders
who will provide the best financing programs for their clients’ projects.
For example, after the
savings and loan crisis in the 1990s, savings and loan entities disappeared,
leaving a major shortage in commercial capital availability. At the time,
George Smith Partners recognized that it needed to change its focus from
savings and loans to the emerging Wall Street conduits and commercial
mortgage-backed securities market. As one of the first companies in the industry
to arrange CMBS financing, GSP built strong relationships with these new
capital sources, many of which have become long-standing business
relationships.
Communication Is Key
Technology evolves
almost as quickly as the markets change. Commercial property owners, agents in San Diego commercial real estate leasing, and investors must harness new technologies
and stay connected with clients, lenders, and other allied professionals.
Ongoing communication and use of the latest technology is vital to retaining
growth during a recession, as well as for staying at the forefront of the
changing market.
For instance, in an
effort to better market its services to clients and capital providers, GSP created
a weekly faxed newsletter focused on insights into critical and relevant issues
affecting the commercial real estate and financial industries. Over the years
the subscriber base has grown; the newsletter is no longer faxed but now
emailed to more than 100,000 recipients each week and has become a resourceful,
invaluable tool for clients and industry constituents.
Company leaders must
identify the communication tools that best suit their industry niche and client
base. For some, the ongoing conversation and visibility of social networking
sites such as Facebook, LinkedIn, and Twitter can be far more beneficial to
business development than more-traditional forms of communication. However,
companies must strike a balance between traditional marketing and current
communications techniques to remain successful.
Watch the Road Ahead
Predicting future market
cycles is a difficult task, with unexpected sea changes in the capital markets
as well as the macro and micro economies that affect San Diego commercial real estate leasing. Yet it is imperative to focus on the road
ahead and try to look around corners to anticipate what is next.
In the short term,
November’s U.S. presidential election is likely to have an impact on the
economy, employment, regulation and taxes, and the fiscal markets, all of which
impact commercial real estate. In addition, Europe’s financial crisis will
continue to have domestic economic repercussions.
In the long term, the
future of commercial real estate largely depends upon the economy and job
creation over the next decade. There are some promising indicators that the
economic train is on the right track: Capital markets have become more
aggressive, and lenders and equity sources are actively seeking solid
commercial real estate assets to finance. However, the economic recovery
remains susceptible to many global and domestic factors that are rapidly
changing.
As property owners and
investors look ahead, it’s wise to take lessons learned in the recent past and
use them to strategize for the future. With the right strategies and tools,
property owners can prepare themselves for whatever the market may hold in the
years ahead.
Source: CCIM
DISCLAIMER: This blog has
been curated from an alternate source and is designed for informational
purposes to highlight the commercial real estate market. It solely represents
the opinion of the specific blogger and does not necessarily represent the
opinion of Pacific Coast Commercial.
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