Although the country is still feeling the ripples from the residential mortgage crisis, many are now worried about the commercial real estate sector. A recent survey by PricewaterhouseCoopers (PwC) shows recovery for the commercial real estate market will likely not happen until late 2011 or even 2012.
With billions of commercial mortgages coming due this year, many are worried a second recession could be on the horizon. However, real estate experts say it won’t be bad enough to send the country’s financial markets spiraling downward again.
An article in The Los Angeles Times says there will be losses but no where near the losses sustained in the residential sector. In the article, Bob Bach, chief economist at brokerage Grubb & Ellis, says commercial real estate as the “next shoe to drop” is an “exaggeration.” He also predicts a turnaround for the commercial real estate market to happen in early 2011.
Although self-storage revenue has declined since the recession began, self-storage has fared better than most other commercial real estate classes, the PwC survey reported. This concurs with what many in the industry are seeing. Some forum members on Self-Storage Talk report occupancy has dropped and rental increases have slowed. However, others report they’re seeing an increase in occupancy.
ISS takes a more in-depth look at the self-storage real estate market in the February issue, which should be landing in your mailbox this week. Real Estate expert Michael L. McCune takes a closer look at why self-storage has fared better, what’s going on with financing and cap rates, and what to expect in 2010. Other articles delve into buying or selling self-storage, and determining your facility’s value. You can also read all the articles online.
In addition, the February issue features the first part of a three-part series in which Inside Self-Storage asked experts in industry real estate, finance, development, management and marketing for their insight to today’s market. Part 1 delves into real estate, examining how the economy has impacted the buying and selling of self-storage properties, trends in cap rates, and what’s on the horizon.
If you’re interested in getting into the self-storage industry—or even expanding—now’s a good time to do so, the PwC says. With prices being influenced by politics rather than occupancy rates, the next year will be a good time to purchase commercial real estate. You can learn more about the self-storage industry at the Inside Self-Storage World Expo in Las Vegas, March 1-3. Explore the many seminars, product and service exhibits, self-storage Q&A, roundtable discussions, Buyers & Sellers Meeting for real estate-minded professionals, and the new Technology Marketplace where attendees can demo the latest security, software and Internet-based products. To register, visit www.insideselfstorageworldexpo.com.