Time to Make Hay

Leaving the title company yesterday after a closing, I thought about how much the Sioux Falls Commercial Real Estate Market has changed in the last two years. After dropping a happy (I hope!) client back off at his office, I thought I should say something about this a tweet or a blog post. On a whim I looked up this old blog and realized it had been nearly two years since I had blogged about South Dakota Commercial Real Estate and decided it was time to change that. 

If you are involved in Commercial Real Estate in anyway, it's clear that things are up on the upswing. Some asset classes are doing better than others, but generally its a good time to lease, buy or sell commercial/investment real estate. Interest rates are low, vacancies are down, the fear is gone. Developers are optimistic (for real now), and are testing speculative waters. Buyers and sellers seem to be on equal footing with sellers starting to command a premium, and it some cases getting it. 

So what's next?

Current Investment Property Owners:

• Call me to review income and expenses. Make sure your ratios and rents are in line with the market. Now is the time increase rents as leases expire. Its hard for tenants to find deals in today's market and moving is a pain. If business is going well and your rental increase is inline with the market, chances are they will not move.  2 and 3% increases go a long way in ensuring your asset appreciation continues and your Net Operating Income supports your target rate of return.

Investment Property Buyers: 

• Quality investment property is getting harder to find. When opportunities present themselves they will not last for long. Talk to your banker and make sure you are ready to swing at a fast ball thrown down the middle of the plate. Give me a call, talk to your CPA, attorney, golfing buddies, etc. This is still a small town, deals will find you. 

Nobody knows the future, but is clear that the sun is shining right now. Let's make some hay!