It is all about Jobs
Most of the well chronicled ailments of the commercial real estate sector have revolved around two keys issues: (1) jobs and (2) the CMBS market and who will fill the void in the debt market for the massive amount of commercial real estate that will need to be re-financed.
The commercial real estate sector is ready for a rebound, according to James McCaughan, of Principal Global Advisors. He shares his view in an interview with the CNBC .
Jim McCaughan makes three key points:
- The financing gap in the CMBS market is being filled.
- It is time for real estate to react to the recent improvement in the economy.
- Absence a double dip recession, the economy has the capability for significant job creation in 2011 and 2012, if Washington stays out of the way.
I didn’t hear anything in the interview about shoes dropping or Tsunamis. This just reinforces the fact there are many varying opinions and positions on where commercial real estate is headed. Of course, the safe stance to take is “cautiously optimistic”. I have always been of the opinion, the CMBS situation would work itself out. It is all about jobs!