You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. PLEASE LET ME KNOW HOW I CAN HELP YOU. Call me if you want to sell your property and need an estimated value.
Phone / Prefer cell: 520-975-5207 Office: 480-948-5554 or email me walterunger@ccim.net. – What is a CCIM. In Business and in Life you don’t get what you deserve, you get what you Negotiate.
click here to view all my listings.
Walter Unger CCIM – cell: 520-975-5207 – walterunger@ccim.net
CONTACT ME IF YOU WANT ME TO GET YOU THE VALUE OF YOUR PROPERTY
Higher Interest Rates, Slowing Income Growth Require a New Playbook for Commercial Property Investors and Owners
By Chad Littell
CoStar Analytics
May 29, 2024 | 7:37 A.M.
The commercial real estate industry faces new adversity as it navigates an economic phase marked by higher interest rates and slowing income growth, an economic condition commonly known as stagflation. While there is debate about whether the broader U.S. economy faces this condition, there is little doubt that the commercial real estate sector is already experiencing stagflation’s effects.
Given that it has been decades since the previous stagflationary environment of the 1960s and 1970s, it may be time to revisit the lessons learned from that period and look to rewrite the playbook as investment strategies for commercial real estate based on the availability of inexpensive debt may no longer be successful over the long term.
British politician Iain McCleod introduced the term “stagflation” in 1965, and it has since become a significant part of economic discourse. While this analysis focuses on the effect of stagflation in the commercial real estate industry, it’s important to note that this economic shift marks a departure from the 40-year decline of long-term interest rates, a pivotal change for both the U.S. economy and the real estate industry alike.
Since the 1980s, the yield on the 10-year Treasury has served as a significant incentive for real estate investment. Beginning in 2000, Treasuries began to steadily decline, from yielding an average of 5% to as low as 0.5% by 2020. This made access to inexpensive debt for acquiring or developing commercial property widely available and attracted investors seeking the higher rates of return available from appreciating real estate assets.
Inflation Delays the Much-Anticipated Bottom for Property Values
Despite brief periods of falling property income growth, lower interest rates have come to the rescue of investors by propping up asset property values.
However, the operating environment in place for the past four decades took a sharp turn following the pandemic outbreak with Treasuries climbing 400 basis points and settling into a range of between 4.4% and 4.6% as of early May 2024.
New Dynamic
These yield levels have not been seen since October 2007, underscoring that many active finance and real estate professionals may be unaccustomed and unprepared for a market where debt is simultaneously more expensive and less accessible than in recent years.
The current rise in borrowing costs coincides with a significant slowdown in income growth across most property sectors. According to data from Nareit’s All Equity Same Store NOI Growth Index, property incomes peaked at 8.4% year-over-year in the first quarter of 2022, but have since tumbled to 3.6% in the first quarter of 2024.
Commercial Real Estate Needs To Follow the “Moneyball” Principle of Adapt or Die
This stark reduction in property income signals stagnation occurring inside commercial real estate, where sluggish income growth of 3.6% averaged across all sectors has barely outpaced the headline inflation rate of 3.4% in April 2024.
Amid these broad market trends, the impact on specific property sectors varies. While REIT-owned manufactured homes, industrial properties and healthcare facilities report hearty annual income growth averages of 8.4%, 7.8%, and 7.6%, respectively, other property sectors have struggled to keep pace with headline inflation. The apartment sector, for instance, showed a meager 2.5% annual income growth average, while property income growth averages for the office and self-storage property sectors have turned negative, each experiencing around -0.3% average income growth year-over-year.
Few market participants were active during the last stagflationary environment of the 1960s and 1970s, and the lessons learned may have long been forgotten. It’s time to rewrite the playbook and assume that yesterday’s successful investment strategies may not be tomorrow’s winners.
FROM ME: FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. Now is the time, if you are thinking of selling or purchasing your Land or Commercial Building in Phoenix, Scottsdale, Maricopa County, Pinal County, Arizona / Office / Retail / Industrial / Multi-family / please call me on my cell 520-975-5207 or e-mail me walterunger@ccim.net. Investors and Owner / Users need to really know the market today before making a move. The market has a lot of moving parts. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands your needs. I am marketing my listings on Costar, Loop-net, CCIM, CREXi, Catylist, and various other web sites. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international
DISCOVER WHAT IS HAPPENING IN ARIZONA
History of Arizona from 900 BC – 2017 -Timeline.
click here to view all my listings.
Walter Unger CCIM – cell: 520-975-5207 – walterunger@ccim.net
CONTACT ME IF YOU WANT ME TO GET YOU THE VALUE OF YOUR PROPERTY
Walter Unger CCIM – cell: 520-975-5207 – walterunger@ccim.net
Click here to find out what is a CCIM:
CLICK HERE TO VIEW ALL MY LISTINGS.
Are you ready to sell or purchase your Land or Commercial Building in Phoenix, Scottsdale, Maricopa County and Pinal County, Arizona, please call me?
Walter Unger CCIM
Associate Broker
West USA Commercial Division
14350 N. 87th. Street, Suite 180
Scottsdale AZ, 85260
Phone: 480-948-5554
Cell: 520-975-5207
History of Arizona from 900 BC – 2017 -Timeline.
History of Arizona from 900 BC – 2017 -Timeline.
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
CLICK HERE: Arizona Opportunity Zones As We Understand /maps. Interested!!! Please contact me.
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Walter Unger CCIM
Associate Broker
West USA Commercial Division
14350 N. 87th. Street, Suite 180
Scottsdale AZ, 85260
Phone: 480-948-5554
Cell: 520-975-5207
FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. PLEASE LET ME KNOW HOW I CAN HELP YOU PLEASE CALL ME
CLICK HERE TO VIEW ALL MY LISTINGS.
Also Call me if you need an estimated value of your Property.
Call me if you want to see a map with what is in the Construction Pipeline for Apartments.
Prefer cell: 520-975-5207, or email me walterunger@ccim.net. CLICK HERE TO VIEW ALL MY LISTINGS.
Check out my professional profile and connect with me on LinkedIn.
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Reasons to Consider me for Commercial Referrals
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- P
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.