I had the pleasure of speaking with Ed (if you’re a new reader not familiar with Ed, here’s an entire blog category devoted to his history and wisdom) yesterday as the long Thanksgiving weekend wound down. 

He had spent Thanksgiving at his beach property in South Texas and was out deep sea fishing with friends for a couple of days off the coast of Mexico.  With winter slowly settling in here in Bozeman I salivated as Ed described fish caught in the 80 degree weather.  He and I share a passion for fishing, though Ed prefers salt water to our mountain rivers. 

Ed finally directed the conversation to real estate, as he nearly always does, and we talked about what’s hot and what’s not in commercial real estate these days.  It’s easy to pick out what’s not – retail, particularly hard hit are mall type properties in many markets, hospitality, and office (even in some of the “impervious” Texas markets).  Medical real estate has slowed but appears to be holding its own in many markets, though an expert friend in the field (and Ed) agree that medical related real estate could be primed for a hit with probable changes coming sooner rather than later in the American medical “industry”.   As an anecdotal aside, I’ve been contacted by real estate savvy physician friends in SLC who feel it’s time to unload their 10 year old, fully occupied, five story medical office building; in fact the most prescient of the group opines they may be too late. 

Ed continues to feel, as do we, that multifamily fundamentals are probably the strongest of any asset class in the CRE portfolio today, though Ed opined that he and his team are looking at several self storage projects as well given their strength in today’s economic conditions.

Ed’s point – don’t believe all the doom and gloom that you hear / read today about CRE; while investor competition is increasing in these active asset classes (mf/ss), there’s plenty to keep you busy and engaged. 

Ed’s right on the mark again. 

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