Showing posts with label Random Thoughts. Show all posts
Showing posts with label Random Thoughts. Show all posts

Friday, July 12, 2024

Random Thoughts


Occasionally, it’s a great idea to clear your mind, empty the inbox, and allow your thoughts to be random. Today, dear readers is such a moment. 
 
It's fascinating how the mind can wander through a labyrinth of thoughts, each one seemingly unrelated yet all part of the same intricate web of our daily lives. 
 
Today, I'm embracing the randomness and sharing a glimpse into the eclectic musings of a commercial real estate broker's mind. 
 
Someone famous once opined, they’re only opinions, however, they’re all mine.
 
Here goes. 
 
Presidential Election
The political climate is heating up as we approach the next presidential election. The decisions made at the polls will ripple through various sectors, including real estate. Policies on taxes, environmental regulations, and economic incentives could dramatically shape the landscape of commercial real estate. It’s a waiting game now, as we brace for the changes that a new administration might bring.
 
Interest Rates
Interest rates are the heartbeat of real estate investment. Recently, there’s been a lot of speculation about whether the Federal Reserve will adjust rates again. Lower rates have made borrowing cheaper, fueling investment and development. However, the potential for rising rates could cool the market, making it more challenging for buyers to secure favorable financing terms.
 
Owner Occupant Activity
There’s a noticeable trend of increased owner-occupant activity. More businesses are opting to purchase their spaces rather than lease. This shift is driven by the desire for long-term stability and control over their work environments. It also reflects confidence in their growth prospects and a strategic move to build equity in their properties.
 
Vacation Schedule
Even commercial real estate brokers need to unwind. Planning a vacation amidst a busy schedule can be a challenge, but it’s essential for maintaining balance. Whether it’s a beach getaway, a mountain retreat, or exploring a new city, taking time off to recharge is crucial. This summer, I’m hoping to strike that perfect balance between work and relaxation.
 
What to Expect This Summer
Summer often brings a mix of excitement and uncertainty. The market tends to slow down slightly as people take vacations, but it also presents opportunities. This year, I’m anticipating a few surprises – perhaps an unexpected deal or a new trend emerging. Staying adaptable and ready to seize opportunities is key.
 
Embracing the randomness allows for a broader perspective. It’s a reminder that in the midst of our busy lives, taking a moment to reflect on the myriad thoughts and events can be incredibly grounding. Here’s to the journey and all the unpredictability it brings!
 
 
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.
 

Friday, April 12, 2024

Random Thoughts


Ahh, springtime. Longer days, warmer temps, flowers abloom, the crack of the bat on opening day of MLB, NCAA final four, and the Masters golf tournament. You may be wondering how I have time to make any deals with all the sports happening this time of year. It’s tough. But in light of the screen time I’m spending, my thoughts these days are random. 

 
Please stay tuned as I run through a few thoughts I have clouding my consciousness. Someone famous once said - they’re only opinions, but they’re all mine”. 
 
Seller/buyer disconnect. I wrote an entire column on this topic last week. If you missed it, you can catch it online.
 
Not terribly long ago, we were immersed in a seller’s market. Occupant demand outstripped supply and sellers were bullish. Multiple offers were the norm. Asking prices were abandoned for the dreaded TBD in case pricing was pegged too low and money was left on the table. The amount of buyer activity determined the ultimate strike price. In order to compete in this frenzy, occupants were forced to shorten due diligence periods, jettison financing contingencies, and seemingly overpay. A listing translated into a guaranteed paycheck. 
 
My how the world has changed in two short years. The only thing keeping sales prices relatively stable is a lack of availabilities. 
 
Impact of our Presidential election. I get asked quite often what to expect if Mr. Trump is elected vs Mr. Biden. Generally, a republican administration can portend tax cuts, an increase in defense spending, loosening of government regulations, and the appurtenant boom in the economy. To the extent this boom causes prices to rise - interest rates must be hiked in order to cool the fever. 
 
Counter to this would be a democratic administration with higher taxes, cuts in defense, more regulation, and a weakening economy.   
 
Yes. I’m oversimplifying. I can hear the detractors screaming - we have a democrat in office and the economy is just fine. In our most recent republican tenure, government debt increased dramatically. So the above are only generalities. 
 
Bottom line. Who knows? 
 
What’s happening with our economy? Speaking of said economy, what’s up? Consumer confidence is high, over 300,000 jobs were added in March, labor participation rate is now close to two thirds. If the economy is in the doldrums - why are employers adding so many jobs? Granted a big portion of the new employment is in the service industry where folks are spending money to dine out, take trips and buy experiences. Meanwhile, we expected a declining interest rate market this year as we anticipated the Federal Reserve would start the march down with inflation coming to heel. As of this writing, our benchmark ten year treasuries are topping 4.4% - bad for borrowers, good for savers. Retailers in the beauty trade are taking their lumps as well. 
 
Bottom line. Who knows. 
 
Springtime spells new beginnings. Another year and another batch of things to ponder. Should be an eventful balance of 2024. 
 
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.
 

Friday, October 6, 2023

Random Thoughts

Occasionally it’s good to empty your inbox of meandering messages. Today, I purge my consciousness of random thoughts that take up too much bandwidth. So here goes. As someone famous once opined - they’re just opinions - but they’re all mine. 
 
Generational wealth. Lately I’ve encountered several instances of generational wealth created through commercial real estate ownership. A common thread runs throughout these families, and that is investment in commercial real estate decades ago when it was much cheaper than today. Generally, there was a workhorse such as a manufacturing company that created excess dollars that was poured into commercial real estate ownership. In some cases, this was raw land held for development in the future. But, it’s astounding how deep generational wealth runs.
 
The start of school. Every September, when the school buses crank up and young people leave for college, my thoughts drift toward the trades, and how important they are to our economy. In my generation, we were taught a college education was the ticket. Nowadays, carpenters, electricians, plumbers, and handyman who can repair air conditioners start at much higher salary levels than those with college educations. Pair the two - college and a skill - and you’re golden! Additionally, these trades provide a platform for young folks to start their own businesses. Please understand I’m not dissuading anyone from getting college educations - just that there are many other ways to make a great living in today’s economy.
 
A shopping experience like no other. Recently, I decided to replace my iPad. You see since the days of the pandemic lockdown my entire workload has been carried by two Apple devices - my iPad in my iPhone. That’s right! No PC in this man’s world. I recall the last time I purchased an iPad. It was a bit painful, as passwords had to be recollected, data had to be transferred, and inevitably it just didn’t work like the old machine. To combat this, I kept my old one around for a while. Now my work space looks a bit like a scene from Wall-E, where pieces of old devices are strewn about. However this shopping experience was different - as I simply placed my old iPad next to the new one and voila - data was transferred. The new machine was operational and looked identical to the old one. What an incredible shopping experience. On my way back to meet my wife, I encountered Warby Parker. For those unfamiliar with Warby Parker, it’s a bit like a chipotle only for eye glasses. You simply walk in with your prescription, check out the samples of your glasses, and they magically appear at your house six business days later. It’s difficult for me to imagine how old line optometrists and computer stores will have a future.
 
The details matter. Recently, I negotiated a lease on behalf of our client. This is commonplace, however, this lease negotiation took on a whole life of its own. In addition to making sure the lease reflected the business points, we were asked to opine on certain areas of the lease and their impact on future events. As I reminded our client many times, we are not attorneys and do not dispense legal advice. But, our client felt comfortable with our laymen’s interpretation of certain clauses in the lease. In situations like this, I feel particularly valuable, but at the same time vulnerable. I can’t recall being so invested. The deal is now done and our client has a shiny new home. Best of luck!
 
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.