Coldwell Banker commercial real estate broker Jag Grewal takes over the reins as president of the Commercial Investment Division of the
What are the biggest challenges facing your industry?
You have to have a strong stomach to be in commercial real estate as a broker right now. The lifeblood of commercial real estate is expansion of commercial activity, and the economy is not doing well, and businesses are not expanding. On the contrary, more businesses are closing their doors. It is taking a lot longer for deals to get done. The average is 90 days to 150 days for the sale of a building. Only 30 percent to 35 percent will end up closing at all. Buying activity has slowed. At this stage, sellers are saying, “Bring me something to work with.”
Is it harder to finance transactions?
Financing is the biggest hurdle buyers face. It’s a challenging time to raise money. Businesses that are doing well, that want to expand, are having trouble getting commercial business loans. Even with a bargain, how are you going to fund it? No bank will lend on land. If you’ve got cash, though, you couldn’t be in a better position to buy right now.
What should investors be thinking about now?
Investors should be looking for income property with an upside, getting something at a good price. Real estate value is always in the buying, not in the selling. The mistake is buying something for $400,000 and thinking you can sell it for $500,000. Instead you should be thinking that $400,000 is a great deal. Profits are always in the buying.
How are landlords coping with the downturn?
The industrial sector is doing well but, depending on where you are, the office, retail/restaurant and shopping centers are hurting. There is high office vacancy in Lakewood Ranch, but the downtown
Are there still opportunities in commercial real estate? What are they?
When times are tough, people look to blue chip investments. You’ll find that in downtown