When Do National Trends Matter?

There are few national trends in commercial real estate. But there are some. Read this article and pay particular attention to #2, #3 and #9. These trends will play out differently in every major market. Apartment investors should watch them closely.

The Houston market continues to power along. We have 4 properties in this top 5 MSA; we watch Houston closely. Multifamily investors should concentrate on long-term economic indicators more than short-term commercial real estate trends. These long-term trends (e.g. employment growth, population growth) are the most accurate indicator of the long-term health of a market. Houston is poised for above-average economic growth for the next decade.

I share this story not to pick on Amazon. By all accounts, they seem like a great company, and I am a frequent customer. However, I find it odd that the “traditional” investing industry continues to tell you to buy stock in a company that went public 17 years ago and is still not turning a profit. These same experts will then tell you that commercial real estate is too risky and speculative.

Real Estate can be fun. Honestly. Do you know why some front doors are red in Scotland? Or how much Warren Buffet paid for his house? These tidbits might not make you a better real estate investor, but they will make you more interesting at your next holiday party. Consider it my gift to you.

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