Everyone has heard the adage"buy low, sell high"
usually only as it pertains to stocks. The principle is true in every industry especially when it comes to commercial investment. I also heard another adage the had to do with the easiest time to sell something. It was called the 4 D's.
"DEATH, DIVORCE, DISASTER, and DISTRESS"
That principle is true in our industry as well.
In "National Real Estate Investor Magazine" this month there was an article called "Staying One Step Ahead of Distress". The author, Joe Gose, talked about how many investors and REIT's are waiting for the right time to strike.
“Everybody is waiting for the distressed and value-added plays,” says Arthur Milston, a managing director with Savills LLC, the U.S. arm of global real estate services firm Savills. “You haven't seen a big wave of distress hit the market, but investors intuitively know it's going to come.”
So what does this mean for the commercial broker? I think it means two things. One that until landlords and owners finally realize that we are in one of the ugliest economic downturns in decades there will not be a lot of deals to be done. So as a broker we need to "Get ugly early!" This was said by Mike Falk the President of NAI Utah Commercial Real Estate. He went on to say that we need to have the courage to look our tennants, owners, and investors in the eyes and tell them the truth. "Don't watch the market go down...lead it down."
Commercial real estate is a market that can thrive in an economy that is going up or down. It is when the market is stagnent that deals become scarce. So the secret to success is to not be stagnent. Lead the market, be the first to drop the price or lower the lease rate. Show your clients that now is the time to act. Hesitating now could cost them a lot more in the long run!
