And possibly will not happen this year, for a list of possible reasons. Typically in the commercial real estate arena July signals the inevitable slowdown of this field which transitions into the vacation-filled month of August. Many property owners and brokers alike take this time to travel, spend time with families or just take some time off. Now entering the last few days of July the “activity” has not wavered and seems to be actually busier than some of the months leading up to this period. I had one client just tell me “This is the first year I am bringing my cell phone on my summer trip and I plan to be working every day.” I believe there are many factors coming into play to push this steady activity.
One reason, which I have mentioned in my previous articles several times, is the continued overall lack of quality product on the market. So typically these investors and buyers who tend to “put pencils down” during this traditionally slow period and pick up interest again in September are not diverting their focus on finding a potential purchase. Due to this supply constraint buyers are forced to stay on top of the market no matter what time of year or where they may be. On a daily basis I have clients touching base with me to see if there are any new opportunities coming through the pipeline, and these calls are coming in from all over the globe, not just when they have a few minutes when they get back to their offices. Investors need to be tuned in at all times to find that next possible transaction.
Although we have not seen a spike in supply it doesn’t mean that will not change in the near term. A huge possible factor in property owners’ decisions to put their assets on the market is the impending jump in capital gains next year…or should I say Olympic leap. The idea of capital gains more than doubling, from 15 percent currently to a possible 33.8 percent figure, is a true motivation for many property owners, and is why so many of these owners have been recently meeting with their brokers to discuss value and timing. Right now you may see a trickling of buildings come on the market, but if the breadth of consultations is an indicator for product coming to market then you should see a noticeable increase of listing activity over the months to come, especially as you get closer to year’s end. This might be an unprecedented opportunity for buyers, particularly those who can fund and close transactions quickly, to find the targeted properties they have been long awaiting for over the past several years.