Wall Street on Contrarians & Commercial Real Estate

Wall Street on Contrarians and Commercial Real Estate
By: Nicholas A. Dunlap, CPM

The Real Estate section of yesterday’s Wall Street Journal boasted an interesting headline that fitly described the current real estate investment climate. “Beaten down and bid up” it proclaimed, in reference to the Commercial Real Estate market and specifically the Real Estate Investment Trusts who have been acquiring Commercial assets. Occupancy rates and gross income are down, however, investor demand for these assets typically generates multiple offers and quick sales. As a firm we share this contrarian approach to real estate investment, that is, to buy or invest when no one else is buying.

With interest rates remaining low and capitalization rates on the rise, if you plan to purchase for cash flow and can acquire an asset with cash flow sufficient to your standards, right now is the time to buy. If you are considering an asset that requires a significant increase in gross income to generate your desired cash flow, hold off on the acquisition; true sellers will eventually adjust their expectations.

Read the article in its entirety by clicking here: http://online.wsj.com/article/SB10001424052702304604204575182341492138752.html?mod=WSJ_Commercial_LEFTTopNews