Why will we survive this cycle? An age-old fundament called discipline. The last cyclical downturn taught us a lot and the prolonged lessons are not quickly forgotten. Which is why the current cycle will plateau rather than recede heavily. We have not overbuilt nor over leveraged.
What areas do we need to worry about? Sustainability at this pace and job creation or expansion. How do those things happen without new innovation keeping up?
Expertise in certain fields and specialization in core areas of knowledge are the things to watch for, and those will shape how we grow from here. Being able to perform well in one asset class and to replicate that success across markets is what will help buoy profitability and allow growth to happen in such a peak point in the cycle. Also, the amount of liquidity in the markets that’s waiting for even a little distress in deals gives confidence in the notion that any slowdown will be swiftly met with those looking for opportunities. That stabilization is what could help create the new foundation to grow from.
Even though the national Conference Board’s Leading Economic Index declined slightly in January, it’s a mix of economic market conditions and lack of data due to the government shutdown affecting the research. Even with that shutdown anomaly, the sentiment is a plateau could be evident.
Locally, in Tampa, it’s hard to find signs of slowing down at all. It’s not to say we couldn't see any signs through 2019, but it will take us all year to figure out the signs and then determine which direction they are pointing. Most of the data and analysis points to successes and consistent growth so far. The multi-family market for apartment complex development continues to keep pace with demand as new buildings are built and new occupants move to the area. Our local Port continues to attract new carrier contracts with direct connections for commerce and overseas shipping. That’s a direct result of our population growth and the need for consumer goods.
That economic driver continues to push our need for industrial real estate to new levels as well, which in turn is motivating investors and developers to plan new construction of large-scale warehouse distribution centers from East Hillsborough County, into Plant City and Lakeland through Polk County. There is over 4 million square feet of industrial new development under construction along the I-4 Corridor, with the potential for even more than that in the coming years if 2019 absorption and continued occupier activity keeps up the pace.
Call Fortress CRE, so we can talk expert advice on where your real estate strategy should be focused in West Central Florida. Fortress Commercial Real Estate (CRE) adds value to business owners looking to grow through their real estate, office and building infrastructure needs.
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