Slowly We Turn

Slowly, we’re turning toward full recovery.  In March,  the mood at our annual RealShare Washington, DC Conference, while upbeat, was cautiously so.  

Well, what a difference a month makes. In April, at RealShare Net Lease, you could almost (that’s almost) hear the champagne corks popping.

That’s not to say we’re throwing caution to the wind, though there are those who worry that asset prices might be getting a little out of whack with what the market can bear (I'm one of them). In all, the major difference between now and the Go-Go-Four-Years-Ago is that today we’re a bit less cocky and a lot more confident. And we’ll be fine as long as that confidence doesn’t “get stupid,” as one respondent to Real Estate Forum’s new Capital Markets Survey indicates.

There’s no doubt we’re going in the right direction. But many of the concerns expressed by our DC keynote speaker, Walker & Dunlop chief Willie Walker, linger. Secondary and tertiary markets are still waiting to feel the wave of good cheer that a recovery brings, and the overhang of debt coming due—some $250 billion due this year—is a hard nut to crack. And as Walker pointed out, even after the life companies, the GSEs and the conduits absorb their share of it, we’ll still be faced with an $80-billion row to hoe.

It’s been a long two years, and we’re all hoping the recovery is sustainable. But it’s also wise to keep an eye peeled. Optimism laced with caution is never a bad thing.