Another Week in October

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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.