NAIOP Chair’s View: ‘Aggressive Optimism’

Part two of a interview with NAIOP Chairman Steve Martin

January 23, 2015

NAIOP Chairman Steve Martin, managing principal with SDM Partners in Atlanta, sat down with to for a mulit-part interview. In this segment, he shares his views on capital markets, opportunistic real estate acquisitions and more. 

The article, in part, reads: In terms of the capital markets, what changes are you seeing as we head into 2015?

Martin: LIBOR and 10-year interest rates remain historical very low, and most of us have been mistaken for years about increases we suspect are just around the corner. Hence, the “chase for yield” in commercial real estate continues with ample capital exceeding viable deals. Rates will remain low until they don't. But like most everything, things will revert to the mean and interest rates will increase … when, how much and at what rate are anybody's guess. You focus on acquiring opportunistic real estate acquisitions. Are those harder to come by in 2015? How do you find them?

Martin: Distressed deals are gone. Ultimately, each investor has to determine when to stop. Many won’t, which is fine for those are tomorrow's opportunities. Right now, for my business in Atlanta, I’m seeing flex-office as the probable product type to provide opportunities in 2015 What do you predict for the commercial real estate markets in 2015? More recovery? Hiccups in certain sectors and cities, etc? Are you, like most others, bullish or just cautiously optimistic?

Martin: In 2015, the markets will generally continue to improve, and therefore tighten, with rental rates increasing as a result—all part of the continued recovery. Although, as in any business, there will always be hiccups—the quick drop to oil at less than $50 a barrel was unexpected. In general, my view is “aggressive optimism”—always be prepared to slam on the breaks at a moment’s notice with hope that I’m not too late in doing so.

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