Did real estate predictions prevail? – Whittier Daily News

Happy New Year! If you’re reading this, 2021 is now a footnote, those Amazon boxes are disassembled and awaiting a delayed pickup, and many of your resolutions have already been broken. Wow, that didn’t take long!

I looked back at my predictions for 2021. My column was published after Thanksgiving and before Christmas 2020. About 13 months ago. So how have i been Spoiler alert. I was a bloody nostradamus!

From December 2020: What can we expect from the commercial real estate landscape in the next year? Someone who was famous once said, “Well, these are only predictions, but they are all mine.” Please be patient with me as I put my nostradamus on.

Bullish industrial owners

We represent an importer. Goods that they distribute are stored. He has a lack of space – hence our commitment to find more. Recently, our full price offer met with reluctance on the part of the owner to grant a financing commitment. I’ve seen this with investment properties, but never with owner-occupied properties.

You see, a lender takes time to nod or nod. Very few residents have unused cash in an account waiting to be purchased. Today we did it! The same resident is still on the market. Prices rose 50% in 2021!

Shorter leases. By the time the scent of economic uncertainty wears off, expect residents to make commitments of fewer years than before. Ten-year leases become five, and so on. Today. This is certainly the case with offers for office suites. Expect more of this in 2022.

Clarity in the office market

I suspect the runway will be clear around this time for the next year and office dwellers will have one direction – up or down. As mentioned earlier, uncertainty is a killer for any business trying to gauge space requirements. But as we see in retail stores with their downtrend, we can at least plan.

This year the office landscape has had beginnings and beginnings. In the middle of the year, when the state was fully reopened, it was derailed from the Delta variant. And now that omicron is taking on the fall load, it is uncertain when companies will fully return to the office.

Low interest rates

The Biden government is most likely blocked by a Republican Senate. With a near-balanced House of Representatives, a White House Democrat, and a Red Senate, expect the Federal Reserve to keep rates low. Our 10-year Treasuries – a pioneer in commercial real estate lending – are also expected to indulge in historic lows.

So how about today? To the point! Though, are these thunderclouds massaging? Yes sir. That’s higher interest rates on the horizon.

Burgeoning e-commerce

With a clue from the Buchanan household, internet orders and just-in-time deliveries to your door will continue with a vengeance. We recently bought a new mattress online. The next day two brawny men took him to our master suite on the upper floor.

Will someone kindly develop a box compactor for home use? Something between the kitchen trash can and the ones in Albertson’s storage room would be great. There is your multi-million dollar business idea for 2021! You’re welcome.

Today? Boom times!

Ongoing security logs

As the pandemic blossomed in March, temperature checkpoints, masks, hand-washing stations, and distancing were all predicted. Actually, it wasn’t very futuristic. What other countries were concerned with was observed. However, I am surprised at how quickly we have adapted. Similar to the airline changes after September 11th, we can’t just go to a concert, eat in a restaurant, or shop without our face covering. Shocking. Expect more in 2021.

Today: A new mask mandate, Vaxxing proof, 2020 Redux? Could be.

An innovative technological offer?

Commercial real estate is rarely disrupted by something shiny and new. CoStar in the mid-1990s was arguably the last big thing. With CoStar’s acquisition of Ten-X earlier this year, we could see a more robust platform for transactions. The site now has available inventory, what was recently sold, and an auction template. Hmmm, where do brokers fit in?

Look no further than our living room counterparts to get a glimpse. Matterport tours, consumer-focused available inventory, and accurate internet loan processing reduce the need for buy-side agents.

Today: Well, I missed that. Unless it comes out in 2022. Tick Tack?

Hardly any vacancies in industry

I don’t see anything in our immediate horizon that would lead to an increase in industrial availability.

The growth in area could be driven by new buildings. Nope! On the one hand, there is not enough free space in the OK to meet demand. In addition, it takes ages before a new development is justified. Business failures? Probably not. We just got through the biggest health crisis in 100 years and many industries were thriving.

Exodus from the state? Could be. We definitely saw some movement. However, our local businesses are largely private. They are your neighbors with a rich history and ingrained residency in SoCal.

Financial collapse? Yes. That could do it. 2009 again. I hope not, of course.

Today? Nailed Again! In all fairness, it will take something disastrous to get us back to a normal 5% vacancy rate. Between you and me – I would prefer the tight spot!

Allen C. Buchanan, SIOR, is a Principal at Lee & Associates Commercial Real Estate Services, Orange. He can be reached at [email protected] or 714.564.7104.