Come to Us for Central Massachusetts Commercial Real Estate
In our blog article last week (Are We Talking Ourselves Down the Slide?) we talked about the value of an upbeat attitude in today's "interesting" economy. In that spirit it was refreshing to view Chairman Ben Bernanke's interview on 60 Minutes on Sunday. He seemed to be cautiously continuing this theme. I wish we could take credit for his interview - we can't. Yet it seemed apparent from his comments that the current recession may have an end in view. He fell short of predicting an absolute turnaround in 2009, but he held out an expectation that it can with recovery projected in 2010. There were still a lot of "ifs" expressed, but the general tone was more positive than the evening news.
And president Obama is speaking in somewhat more positive tones than he did for a short time. To the degree that bad news begets bad news, so does good news stimulate positive thinking.
Since our theme is commercial real estate, do we see a benefit to our market from an upbeat tone? Yes, we do.
What's happening? There are definitely some negative aspects in our market focused on two main areas. One is the lack of liquidity in the banking system and the other is the loss of formerly sound tenants in the office and retail sectors, in particular. This loss of tenants devalues the property due to the loss in cash flow.
Some areas of the country have already seen severe pain and won't view a recovery quickly. We deal primarily in the central Massachusetts commercial real estate market where the market letdown has been less severe and will likely continue at this pace. We don't generally see the peaks and valleys so common in more volatile markets. What this also suggests is that there are good investments to be made in the secondary and tertiary markets.
Investors will be well advised to look at this market for long term investment rather than the deep discounts being sought today by distressed sale buyers. Financing is available through community banks. The economy, while not robust, is better than many areas of the country, and we have a diversified mix of manufacturing, electronics, medical and medical device manufacturing, retail and beyond.
Take a look at how we can provide solutions for central Massachusetts commercial real estate. And thanks to Ben Bernanke for giving us a hand.
This article contributed by Robert Yale, CCIM email bobyale@svn.com
Central Massachusetts Commercial Real Estate
Come to Us for Central Massachusetts Commercial Real Estate
Do you spend a lot of time lately talking with friends, peers, even strangers about how bad the economy has become and how much further it has to go? Do you hear the "talking heads" on TV echoing these same thoughts? Do you talk with anyone who sounds up beat about the economy these days and suggests that the recession will be brief and not hurt anyone? OK, maybe that goes a little too far. But my real point is to ask if we're talking ourselves downward in a constant spiral.
This is not to be a Pollyanna, but neither should we be a "chicken little" constantly crying that the sky is falling. Let's face it, we're in a recession, it has a while longer to run and more people truly will be hurt. What I believe is that there will be an end to this cycle, business will settle for a short time and then begin to improve. If you accept that, is it time to begin preparing now for the next stage in the business cycle?
I can recall Jimmy Carter's speech when inflation was beginning to increase. He said, "Folks, we've got to stop using our credit cards". And we did. And we went into recession.
The last two recessions lasted about eight months each. They ended when consumers began to spend again. Right now, consumers are sitting on their pocket books and waiting for someone else to begin the new cycle.
Wouldn't it be beneficial if our leadership used some positive rhetoric to enthuse us rather than a constant stream of downbeat news? And wouldn't it also be helpful if consumers used the reverse Jimmy Carter logic and began to bring out their credit cards and bought cars, household appliances, homes and other durable goods?
What are your ideas on how to turn the talk, to bring out the credit cards and get people to feel more comfortable about investing in things they really want to buy now?
This article contributed by Robert Yale, CCIM
Central Massachusetts Commercial Real Estate