June 6, 2016
By Dennis Kaiser
A common theory persists that there’s always a slow-down in commercial real estate in election years. CBRE’s John Frager helped break the myth with these insights about the San Diego CRE market.
Q. What impact do election years have on CRE?
A. I am not convinced that the economy slows much in election years like many say. While uncertainty exists in the market, firms cannot afford to wait in today’s economy. When it comes to real estate, it is important to secure space in a prompt manner.
Q. How have San Diego’s sales numbers stacked up historically?
A. Sales for both office and industrial properties since 2003 varied widely over the last three elections (2004, 2008, 2012). 2004 greatly outperformed the previous year, while the same didn’t hold true in 2008.
Q. What have you seen happen with absorption and vacancy during election years?
A. There was healthy net absorption and decreasing vacancy for office and industrial product in 2004. That’d didn’t hold true in 2008 when the recession was beginning. During 2012, with an improving economy, CRE once again posted strong net absorption and decreasing vacancy.