There are telltale signs of an economic downturn, says Kent Williams, senior vice president and managing director of Marcus & Millichap Real Estate Investment Services. The price of gasoline jumps. The stock market crashes. Panic ensues.
Economic recovery, meanwhile, is harder to pinpoint.
“When the market comes back up, especially in the beginning stages, it’s very subtle. You don’t really notice it. Usually you’re looking over your shoulder a year later and say, ‘You know, that’s when the bottom of the market was.’ That’s happening right now.”
Williams doesn’t claim to be an economist, but says he knows what he’s seeing in his own industry and, more specifically, in his own company.
“We are definitely climbing out of the hole right now,” Williams said. “It might be that an agent, instead of taking one listing in a period of time, would take two. For them, it feels like a slight increase. Maybe they got lucky. But when you’re sitting here and you’ve got 40 agents and in that period of time they each take one additional, that’s 80 listings. That’s a huge increase as you come off the front line. We’re seeing that.”
Marcus & Millichap Real Estate Investment Services is the largest of its kind in the nation, according to data accumulated by real estate analytics firm CoStar Group. The commercial real estate investment firm closed 3,441 transactions for private and institutional investors last year.
A recent promotion makes Williams the newest managing director at Marcus & Millichap. He’s based in the San Diego office in the University Towne Centre area, but also oversees offices in Ontario, Newport Beach and Las Vegas.
He said it has taken a number of years for the average investor to get excited about real estate again.
“I think that there’s an awful lot of capital sitting on the sidelines, and they’re all waiting to buy. The reason I know we’re past the bottom is most investors will now say, ‘I wish I had bought that deal six months ago.’”
The investment real estate market is varied. Marcus & Millichap helps clients buy and sell commercial properties including shopping centers, office and industrial buildings, apartment properties and single-tenant net-lease properties.
As the economy transitions, so too does the demand for certain properties.
“On the buy side in San Diego, everybody wants apartments, but there aren’t a lot of sellers in the market,” Williams said. “Across the country, the hottest product is single-tenant.”
Williams said a lot of investment dollars leave San Diego because those who own property here can better leverage their equity dollars elsewhere.
Still, the San Diego region remains an attractive market for commercial investors. “There’s a belief, rightfully so, that there will always be demand here,” Williams said.
Iconic buildings in downtown San Diego and La Jolla are the most coveted. “It’s still a location, location, location game,” he said.
McEntee is a San Diego-based freelance writer.
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