"Giving
Thanks for a Bountiful Year in Commercial Real Estate"
To
all my readers, Happy Thanksgiving! As we gather to celebrate this cherished holiday,
I can't help but reflect on the many reasons we have in the world of commercial
real estate to be grateful for in 2023. The fall season has always held a
special place in my heart, with its crisp air and vibrant foliage. It's a
season that culminates in Thanksgiving, a day dedicated to indulging in the
company of loved ones, feasting on delicious food, and, of course, watching
some football. Wherever you are, I extend my heartfelt best wishes for a
wonderful Thanksgiving day filled with joy, gratitude, and togetherness.
As
we approach the end of 2023, with only six more weeks until we bid farewell to
the year and sing "Auld Lang Syne," let's take a moment to count our
blessings in the commercial real estate industry.
Booming Market. Demand for
Class-A industrial has been a bit tepid as we’ve delivered a slug of new
inventory and the market adjusts to higher rents. However, within the last two
weeks we’ve seen two large deals transact - one in Fullerton and the other in
Brea. I still believe we have some softening ahead, but the green shoots of
tenant demand appear to be growing.
Technological Advancements. Artificial
intelligence, also known as AI has significantly changed the ways content
creation happens. You know those flowery descriptions of your dream home that
appear on websites or brochures? Chances are - those were written by bots.
Commercial agents generally lag our residential counterparts by years. However,
targeted marketing campaigns, with letters, emails, texts, and collateral will
all go twin some generative content soon. Quick responses on listing inquiries
will follow. Clauses for letters of intent or contracts could be next.
Sustainable Practices.
Sustainability has taken center stage, and it's heartening to see the
industry's commitment to green building practices and environmentally conscious
development. It's not just about reducing carbon footprints; it's about
creating healthier, more sustainable communities.
Adaptability. Commercial
real estate professionals have shown incredible adaptability and resilience in
navigating the last three years. Industrial in hyper mode throughout 2021 and
early 22, the office market cratering and then coming back to life in a
different form as hybrid work became a thing, and finally retail that placed a
premium on experience. The ability to pivot and embrace new ways of doing
business has been instrumental in overcoming challenges.
This
Thanksgiving, while we remember our blessings, we do have some signs of
uncertainty for the year to come - decades high interest rates, global
uncertainty, wars in Ukraine and Israel, an upcoming presidential election, and
a potential recession.
As
you gather around the Thanksgiving table, whether with colleagues, friends, or
family, take a moment to reflect on the collective blessings of the commercial
real estate industry in 2023. Let's express our gratitude for the opportunities
we've had and our determination to overcome challenges in the coming year.
So,
as the aroma of a Thanksgiving feast fills the air and the excitement of a
football game captivates our attention, let's give thanks for the thriving
commercial real estate industry and the promising future it holds.
Happy
Thanksgiving!
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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