Victor’s Insider Scoop on Why The Sky Isn’t Falling on the Phoenix Commercial Real Estate Market … revisited
May 10th, 2008 | top of page
In this month’s edition of Phoenix Commercial Real Estate News & More I postulated on why The Sky Is Not Falling on the Phoenix commercial real estate market. Although I still believe that premise is true a closer examination is in order. For those of my readers who have been receiving Deals This Month (the previous incarnation of Phoenix Commercial Real Estate Deals & More) since its inception in August 2007 I have reported on an average of 26 sales transactions per month from August 2007 through March 2008. The April and May editions contained 14 and 16 transactions respectively—a 42% decrease from the average number of historical transactions.
So what’s going on? First and foremost none of my investor clients have told me they are pulling the plug on Phoenix. To the contrary, most are saying they view Phoenix as one of the areas of the country they expect to recover the fastest. Texas is the only state I am aware of that has hardly felt a ripple in the past 12 months (something to do with oil maybe??). My clients who are sitting on piles of cash are of the opinion that the best deals in Phoenix will be had no later than Q4 this year. With my assistance they are studying the market and getting ready to pounce. Given the number of deals out there right now—especially subdivision tracts—my prudent investors are doing their homework now and deciding which submarkets are primed to recover first. Ditto for commercial development corners. Call me if you would like to benefit from this research.
For my income producing property investor clients who finance their acquisitions, the slowdown comes not from a lack of interest but as a result of sellers who have yet to admit to themselves that cap rates have shifted half a point up to accommodate the more stringent lending guidelines imposed by newly prudent lenders as a result of the multitude of bad loans still on their books.
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PS – If you are ready to begin to thrive again by getting off the sidelines and putting your money to work give me a call at 602-320-6200. I see lots of deals and may have just what you are looking for.