I don’t like to play the prediction game. Markets are a tricky thing, and I prefer to rely on empirical data when it comes to making a determination. In the residential market, depending on your area, we’ve seen housing prices starting to move back up. New home construction has started to rise. Empirical data is showing that the housing market has bottomed out and is starting to move up.
What about the commercial real estate market? Once again, depending on your individual market the signs are there that things have likely bottomed out and are starting to move up. Office lease rates are starting to move up as supply dwindles in many markets (empirical evidence). If the office market is moving can the retail market be far behind?
There are several recent articles dealing with this turn in the commercial market:
- “Many U.S. Office Markets to Improve in 2013, Accelerating in 2014″ link
- “Key Leading Indicator For Commercial Real Estate Hits Its Highest Level In Two Years” link
- “Commercial rents on the rise?” link
That said, there is still a great deal of uncertainty out there and it’s still a long road back. The take away here for the small business owner is one of timing. Here’s what we think you should be considering now:
- If you are a new business owner, or your lease is nearing expiration now is the time to make your best deal
- If you’ve got an existing lease consider working with your property owner to lock-in your current rates in exchange for a lease extension
The window of opportunity is here. What we are likely to see in the coming year is a slow increase in lease rates, and the incentives in the market now (free rent, etc) will start to disappear. Talk to your commercial professional today. They can help you make the business moves that will set you up for success.