I just had a meeting with an individual who, as a principal in a Commercial Real Estate business, continues to actively acquire properties.
I was further encouraged through our conversation that my earlier prognosis for CRE to be "a top performing asset" over the coming years. He tells me of 100% occupancy rates in some buildings and strong 5 year leases with secure names. It had not been too long ago that it was extremely difficult to finding tenants with strong credit willing to sign attractive new 5 year leases. Finally, I would note that not everyone is aware or in sync with encouraging developments.
From the Fed Beige Book Summary: Many Districts, including New York, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, and San Francisco, indicated that commercial real estate activity had increased and that conditions continued to improve since the previous report.' Over the next 4 years, U.S commercial real estate is going to be a top performing asset. It will overtake equities in out-sized gains late this year or early next year. There is little that can be found today that will not appreciate significantly over the next 4 years as hard assets are sought over intangibles. *sent to a world renowned Commercial Real Estate Expert last month.
You likely know better than I, but as I read the minutes to latest FOMC meeting I am drawn again to an overwhelming sense that Commercial RE will out-pace most other asset over the next 4 years, taking over an out-performing equity market sometime later this year or early next.