A Penny Worth Some Thoughts

Howard

Who cares about a penny? Some people consider it a nuisance coin and have lobbied Congress to do away with it to silence that incessant jingling in their pockets.

But in another context, a penny could be significant, as I learned recently at RealShare Orange County, where 500 people from the commercial real estate industry showed up to mix, mingle, and share their ideas about what's going on in OC real estate.

The penny I'm talking about was called to my attention by Jerry Holdner, VP of research at Orange County-based Voit Real Estate Services, and someone I have been talking to about office and industrial trends pretty much every quarter for the past 10 years or so.

I bumped into Jerry while taking a break from my rigorous schedule of video interviews for GlobeSt.TV. (You can see those videos, by the way, right here.)

Jerry mentioned that he was working on an update of industrial statistics for Orange County and it looked like rental rates might be heading up a penny. Only a researcher and a reporter who has always been intrigued by the numbers in commercial real estate (and, OK, maybe a few other people) would want to talk about the possibility of a penny increase in rents.

Armed with this nugget of information about the possible one-cent jump in OC industrial rents, I mentioned it later in a GlobeSt.TV interview with Bob Osbrink, executive managing director at Voit. Obviously, as Osbrink pointed out, a penny isn't a great leap forward, but everybody is hoping that it's a sign of a trend. And, as he also pointed out, rents ultimately determine property values, so if industrial rents are headed upward it's a positive sign for industrial property values.

Turnarounds take a while to identify, so whether the OC industrial market will hang onto its slim gain and whether it signals the trend that everyone hopes for remains to be seen. But that penny is worth some thoughts, and it brings to mind the adage that the journey of a thousand miles begins with a single step. And maybe the road to recovery, whether in the industrial market or in others, begins with a single penny.