If you answer is something along the lines of “good fundamentals,” then you’re probably chasing deals in the same 20 markets as everyone and their cat. This herd mentality is fine and there are certainly risk-related analyses to justify the approach, but the ability to deploy capital in those markets is becoming increasingly about how low you are willing to accept yields. The approach may also not be doing justice to the question as to why fundamentals are good in the first place. It’s not because of a bourgeoning US economy.
As appeared in…Colorado Real Estate Journal
A few months ago, the manager of a major brokerage firm asked me whether we were interested in buying any retail projects right now. It was a reasonable question, because he knows we’ve been opportunistic investors and developers in all of the major commercial property types over our 15-year history. But, for once, my answer was uncharacteristically short: “No,” I said, “the truth is that the more we study retail, the more we want to buy industrial.”
The fact is that both retail and industrial real estate are undergoing a historic, fundamental shift in their utility. And as a firm that puts rigorous economic, demographic and political analysis at the forefront of its business decisions, that fact has us rather interested.