This last week of
October was highlighted by two key events - an inaugural episode of a new
webinar series and participation as a commercial real estate panelist at the
Cal State Fullerton Economic Forecast conference.
The webinar series is
entitled Trendsday Wendnesday and features interviews with service providers
that advise small businesses. My idea in hosting these was to give a spotlight
to my network while providing actionable ideas for business owners. The first episode
featured my friend and colleague, Allan Siposs of Keystone Capital Markets.
Formatted to highlight three trends currently experienced in the merger and
acquisition world along with a bit of Nostradamus mixed in with a prediction of
what’s to come in the next six months - my goal is to produce a number of these
throughout the year. Our maiden voyage was epic as Allan didn’t disappoint. You
may be wondering what mergers and acquisitions have to do with commercial real
estate? Just this. Anytime a company is sold or a competitor acquired a real
estate requirement occurs. You see, if an enterprise is bought - two families
of facilities, culture, employees and customers must be merged into one.
Frequently, a duplication of buildings causes one or more to be jettisoned.
Consider the bank consolidation during the financial meltdown of 2008. World
Savings was acquired by Wachovia which in turn was swallowed by Wells Fargo.
Imagine a neighborhood center where all three former groups had a branch
location. Yeah. You get the idea. Allan’s three trends were - recessionary
fears, interest rates, and because of the first two - folks with urgency. Allan
does believe we’ll head into recession sometime in mid 2023.
Cal-State Fullerton’s
annual Economic forecast, hosted by the Orange County Business Council, was
held at the Disneyland Hotel. It was nice to return to the “happiest place on
Earth” albeit for some not so happy predictions. Dr. Anil Puri along with Dr.
Mira Farka narrated the journey through the European energy crisis,
recessionary definition, consumer confidence, banking, corporate growth,
inflation, fiscal spending, outlook for a soft landing, hard landing, or
something else. There were some bright spots - our economy grew in the third
quarter of 2022 and the pinched supply chain seems to have eased. I must admit,
my eyes were bleeding after the fantasia - sorry - of charts and graphs. Rest
assured, dear readers, I’ve kept you quite informed about the economy of
things.
Jeff Ball, the new CEO
of the Orange County Business Council, spun a new twist to this year’s forecast
by moderating a panel of commercial real estate experts - Jeff Manley of
Savills, Michael Nguyen of Banc of California and me. Discussed were our
perceptions of the CRE environment, lending world, and our predictions for the
future. We all agreed. Industrial has been the darling, rising rates will nudge
cap rates higher and limit buying power and offices are tough assets to own
these days.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
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