2019 marks the 10 year anniversary of the US’s economic expansion. If it were to continue through July, it would be noted as the longest expansion in US history. This has investors wary about their money wondering when the expansion will end. Historically, recessions tend be cyclical, happening every 8-10 years. Of course, if you were investing in real estate in 2008 you have a reason to be worried. However, 2008 was not a typical recession. It was a complete collapse in the global financial system. GDP may slow down for three quarters and unemployment may rise. However, the economy is still sound, and we have reason to believe that it will continue to be.
At the start of 2019, some investors were worried because they know nothing good lasts forever. They see potential disruption in the economy – perhaps caused by political turmoil around the world, the potential for continued rising interest rates, or uncertainty caused by global trade discussions. In 2018, the stock market rode a roller coaster and ended down for the year. So we enter 2019 asking the question: What will the year bring for the US, global economies, and the commercial real estate (CRE) market?
• With the US economy on the brink of its longest expansion in history, the CRE market should perform reasonably well in 2019.
• Favorable economic conditions including historic employment gains should allow room for rent growth in many property sectors.
• Prices are inflated in many markets, including CRE markets, but the underlying confidence on value of CRE generally supports the prices being paid today.
• The industrial sector will likely have the most favorable near-term fundamentals with the boom in e-commerce fueling demand.
When you’re ready to take advantage of the expansions in commercial real estate, we’re here to help. We’ll find you the best property to fit your needs for the best price or sell your property to get the greatest returns.