A new report published by a combination of the National Association of Realtors (NAR), Deloitte and the Real Estate Research Corporation (RERC) outlines the frustration felt by investors in commercial real estate since the 2008 market crash hit hard. These investors are waiting, hoping and believing that things will soon return to the way they were but what constitutes ‘normal’ in the modern day real estate market? According to Genesis Capital, an important player in the market, the existing environment is the ‘new normal’ and if investors don’t make the necessary adjustments, they will be left behind.
The report is entitled ‘Expectations & Market Realities in Real Estate 2013 – Turn the Page’ and data gleaned from it suggests that some investors understand the realities of the market and are attempting to use the existing environment to make a substantial profit. President and chairman of the RERC, Kenneth Riggs Jr., said that investors could no longer afford to wait for the market to pick up and must change their attitude if they are to be successful in the new era. He continued by saying that commercial real estate is still a fantastic investment opportunity for a great number of reasons.
The President of Genesis, Terry Robinson, is in full agreement. He said that after the massive changes of 2008, many investors assumed that things would return to ‘normal’ within a couple of years. However, things have not changed and Robinson said that Genesis had implemented an off-market approach to adapt to the new age of commercial real estate investment.
The study is comprised of the research carried out by the three participating organizations as they used their strengths and weaknesses to find out more about commercial real estate investment by analyzing trends, the economy and the availability of capital. The aim of the report was to provide an outlook for the future of the real estate market. The data contained within suggests that 2013 will see some economic improvements but highlights the uncertainty that takes the form of spending cuts and raised taxes. There is capital available but the sources of this money are becoming more selective. The report also looks at sectors such as industrial, hotel, apartment and office real estate.
Terry Robinson said that those who can adapt to the new methodology will be able to make a healthy profit. He also pointed out that new financing options were becoming available online and would be given to those with the ability to work within the framework of the ‘new normal’. Robinson believes that keeping an open mind is essential in order to become a success.
The report concluded that the commercial real estate recovery will continue during 2013 as the pent up frustration felt by 5 years of restrictions will result in new demand. When this is added to the paucity of new construction, we can expect lower vacancy rates and higher rent this year.
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