As a commercial real estate agent in Boston’s Metro South area, an integral part of my job is to monitor trends in the market and relate it to the state of the economy. If I have the right facts and statistics, I am able to provide my clients with the best, most knowledgeable information that they can utilize to help make their decision relative to securing a commercial space. One source that I look at frequently is CoStar, one of the best outlets for commercial real estate information out there today. Their recent report on a survey by KPMG, one of the nation’s largest tax firms, sheds some light on why many are still cautious when it comes to investing in commercial real estate.
Here are some of the key findings from the survey:
• Nearly two out of three commercial real estate executives pushed back their expectations for a full economic recovery until 2014 or later. While we are making steps toward recovery, the process is going to be very slow before anything appears to be stabilized. Those who are looking to invest or find commercial space are going to have to be prepared to struggle with finding tenants to occupy that space for a bit longer. If you’re a business looking for commercial space, you may struggle with rising rents for a longer period of time.
• Nearly half of the real estate executives surveyed have adjusted their expectations of a full recovery. There’s not the total tone of pessimism in the industry that was there a year ago; however, the strong sense of optimism has decreased. Real estate professionals are going to be incredibly cautious about how they spend their marketing money over the next year. As a consumer, what this should tell you is that now is not a bad time to find commercial space, but your business should be in the right place before doing so. There are still struggles to be had in obtaining the right office for your business, and in order to do so successfully in this economy, your business needs to have the financial stability to withstand potential complications.
• Some of the biggest barriers to growth in the commercial real estate sector include pricing pressures, lack of customer demand, access to and managing capital and regulatory and legislative pressures. Businesses have experienced similar difficulties when it comes to securing an office space. Without the appropriate financing and budget for commercial space, it’s difficult for many small businesses in the Metro South area to expand. It’s important to remember that if you’re going to go about searching for the right commercial space, you need to weigh your options and determine whether or not right now is the best time for your business to take that step.
My intention with this article isn’t to make it seem like things in the commercial sector aren’t improving. They are. I just think it’s important to have a realistic view about what Metro South area businesses can expect when they consider searching for commercial space. It’s my job, as a commercial real estate broker in the area, to give my clients an idea of what struggles they will face should they choose to enter in to a transaction and guide them in the right direction.
If you have any questions about looking for commercial space in Boston’s Metro South area, don’t hesitate to contact me and ask. I’d be happy to give you guidance and my insights based on 30 years of commercial real estate experience in the area. I hope to hear from you soon!