This is my last column for the summer. As a golfer, I loved the weather - warm but not too hot and rarely muggy. The drought stressed my lawn, vegetable garden and some golf courses though. Nonetheless, many people complained about the heat. I only had one trip to New York City this summer, which can be brutal as the concrete is a heat sink that does not cool off at night. Last year, I was there a lot and it does wear on you. At least here in New Hampshire, it tends to cool off at night.
NH CIBOR lost a wonderful member and good friend. Jim DeStefano, a senior broker and principal of Colliers/New Hampshire, passed away suddenly. A man significantly younger than me, it does give pause. There was a gathering last night for a “celebration of life” for Jim. It was very well attended and most of the participants were upbeat. Like us, they have some deals in the fire, nursing them along to closing. This can be (and often is) stressful. I was at a residential closing on Monday and the buyer showed up with an escrow check (v. a bank certified check). Oops! It took three and a half hours to sort that out, during which time no one was in a good mood! Commercial transactions are often more complex, but the parties tend to be more experienced and simple mistakes rarely happen. This is not to say they are all smooth.
Using the opportunity of the large gathering of so many of my commercial real estate peers, I asked several how things were going. Here are some of the takeaways:
• While nearly everyone has a political preference (and bias), most feel the elections will not affect our industry much (if at all).
• While volumes in 2016 have remained robust, there is a strong sense that this all could slow down in the next 12 - 18 months.
• The setting of interest rates is not within historic norms - no one is sure how long these artificially low rates can last. And thus, they are concerned about how high they may go when they start to rise.
• Amazingly, there is still an abundance of capital and too many investors chasing too few good deals.
• We hear from Steve Forbes that the big banks will not loan to small businesses. I don’t see that as an issue.
• We see plenty of lenders (community banks) with plenty of money looking to lend.
• Users continue to offer (and pay) more for commercial properties than investors. They know their own businesses, see themselves as going concerns, and sense that the cost of borrowing will soon rise.
So, as we enter into the cooler end of summer and early fall, we once again are predicting more of the same. Nose to the grindstone, we continue to plug away. Enjoy these last days of summer.
Bill Norton, CRE, FMA, Hon. AIA NH, is president of Norton Asset Management, Manchester, N.H.