COVID-19 Uncertainty Presents Unique Buying Opportunities
We’re facing a moment in history unlike others – the health and economic impact of COVID-19 is uncharted territory and has resulted in uncertainty and an overly cautious approach to investing. As a Commercial Real Estate Investment Advisor, I see an incredible opportunity to make wise real estate investments in this market. As soon as we make it through this crisis, the economy is sure to bounce back.
Let’s start with interest rates: they have been cut repeatedly to help support economic growth and are currently at historic lows. Now is the time to expedite an investment deal and secure a loan commitment to take full advantage of this economic stimulus.
In addition, the stock market has been extremely volatile lately, leading many investors to consider diversification. Commercial real estate is a low risk investment when compared to the stock market and may provide the safe haven investors are looking for in these uncertain times.
For my clients who are considering investments at this time, there are certain sectors that look more promising than others. As you can imagine, the retail, lodging and office sectors have been hit hard by the COVID-19 crisis which has translated into decreased demand, potentially for the long term. Multifamily, student housing and industrial assets are resilient and still poised for continued growth as they present stable, long-term income and safe investment characteristics.
On the other hand, if you are a seller in our current economic climate, don’t panic! Supply is down and demand is high for the right assets, especially logistics and multifamily properties. 1031 exchanges are still happening, and the National Association of Realtors (NAR) has urged Congress to extend deadlines for like-kind exchanges due to the COVID-19 crisis.
I know times like these can be scary for many, but I predict our economic trajectory will look like the Nike swoosh – a very brief dip followed by an extended period of growth. We can look to China with optimism as they have already begun to recover from this crisis. Stay calm, stay positive and give me a call if you want to assess your investment portfolio!
Justin Langlois, CCIM is a Commercial Real Estate Investment Advisor with Stirling Properties servicing Baton Rouge, Louisiana and surrounding markets. Please reach out to Justin to discuss your real estate investment strategies.