What does 2013 hold for Commercial Real Estate? My expectation is it will look very similar to 2012. Slow employment growth here in Southwest Washington will keep activity at modestly active levels. Scott Bailey has sung this refrain for the past four years, and nothing on the horizon suggests that will change.
However 2012 held several good things for the local market. With many Leases on five year cycles, there we a number of tenants who rolled out of very high rental rate contracts they signed in 2007, surveyed the landscape and made moves into larger higher quality spaces – or purchased their own building.
This will continue in 2013! There seems to be a consensus that we’ll see GDP growth in the low to mid 2 per cent range which will reinforce the above scenarios.
Check out Bill Connerly’s article in Forbes. I think he hits the nail on the head, and if you read his blog, Businomics you’ll see he has been pretty much spot on over the past 4 years, and I’ve fond him to be a great resource for understanding what is coming next.
Some reinforcing data comes from the December issue of Kipplinger. A Thank you to Will Sappenfield of Edward Jones who shared this with me. They expect slow, but steady increases in both lease rates and occupancy over the course of the year, which should lead to modest increases in prices. Here are some additional resources that share the same viewpoint. Both Deloitte and Price Waterhouse have produced reports on the outlook in 2013
You know our view. Clark County, while it has faced a tough four years, has a great economic infrastructure. Four Ports, WSU Vancouver, Clark College, PDX International Airport, Legacy Health Care and Peace -Southwest Health care are tremendous economic drivers. We took our “Own” advice and bought a building for our CBC headquarters in 2012, and expect to see a continued thriving community on the north shore of the Columbia river over the next ten to twenty years. Investing there will produce good returns on your capital.