How Safe Is Commercial Real Estate Investing?

[00:00:00] This week's listener of the week is Jonathan Morris. Jonathan, send us your home address, and for those listening, if you leave us a five star review below, you might be next week's listener of the week. Now, unless you're living under a rock, you have likely heard the sentiment that. The commercial real estate market is crashing, it's burning, and we should all feel bad for everybody who owns commercial real estate.

And I am very excited to let you in on, uh, the reality and it is that a crash is not happening. There is definitely a shift happening. But a shift doesn't mean a crash, and you should not spend too much time feeling bad for your local commercial real estate [00:01:00] investor. Let me tell you, uh, little scenario that has recently happened.

Uh, so you know, as we all know with the pandemic, And work from home. Uh, office buildings are struggling more and more. Uh, that is completely true. Uh, and it'll be very interesting to see what happens. Ultimately, I wish I was a fortune teller. If I was, I'd be on the beach right now, but I'm not, however, While these office buildings are struggling, losing value, having higher vacancy, um, other product types are flourishing, uh, at the same time as the work from home mania started to kick in.

So did such an increased need for logistics. As a [00:02:00] society, we couldn't support it. And as a result, post, you know, in conjunction with, uh, work from home coming to play more and more into our daily lives, so did a greater need for more industrial space. Why I call this the chewy effect. Uh, everybody was stuck at home in 2020.

And so as a result, the folks who might have previously never ordered their pets food online or subscribed to their pets food online, were now ordering their pets food online, seeing how much easier it was, and continuing with this, uh, Trend moving forward. Uh, in July of 2022, uh, my company sold a 50 million parcel of [00:03:00] ground to industrial developers who are building 4 million square feet of warehouse space.

It is June of 2023 currently, and they have recently broken ground. They have major capital partners behind them. And ultimately what this tells me is that if there were a crash, uh, nobody would be buying 50 million parcels, nor would they be building a 4 million square feet of warehousing. So as much as offices are having issues, other product types are thriving.

A correction or a shift doesn't mean a crash. However, when you turn on the news and when you look in the newspaper or look at your local real estate journals, uh, it, it a hundred percent says commercial real estate's [00:04:00] crashing, doom and gloom. I specifically like the folks, um, The naysayers on the internet who don't even work in the industry, I really, uh, get a kick out of their advice.

Uh, just because anybody who works in commercial real estate knows, uh, a crash is not happening. However, maybe prior to this podcast, you thought a crash was happening, and, and that's okay, right? The media wants you to feel that way. They want you to be scared. They, uh, you know, the, the way that the media realistically sells their propaganda is through fear.

I, I wish we turned on the news and it was happy, but unfortunately, those headlines are not as high, highly converting. You don't get the best ratings with happy. Stories, which you get good ratings for, are, um, inciting fear in people. And the media is doing an excellent job [00:05:00] at inciting this. Um, now, thankfully, we're here together and you know that a shift in commercial real estate doesn't mean Acra a crash.

And you want to equip yourself with what to do next to. Ultimately succeed in commercial real estate. And the first action step you're already doing, and that's by educating yourself. You're here with me, you're educating yourself, and you are learning that the commercial real estate industry is not crashing.

It's changing because societally we have changed. Like think about your banking habits 10 years ago to now. It's gone entirely digitally. Think about your, think about, uh, food ordering habits, right? When we were kids, you ordered pizza, maybe Chinese [00:06:00] food. Now you can get anything to your door in an hour, literally.

You have to look at the greater picture of society or changes and how they support or don't support certain, uh, real estate assets. Right? And then when you start to learn and see trends, save cash, do your due diligence and strike strike. When you're confident enough that you won't do a dumb deal. You know, it's, it's so interesting because now with this industrial heyday, right, we're, we're becoming this nation based on logistics, where our expectation as an American is that we can get anything to our doorstep.

Immediately, which we can. [00:07:00] But the reality is what's supporting that is industrial warehousing. So now everybody wants to buy industrial warehousing. What if, what if Nas the time to zig when they Zack? Or maybe you do want something stable like industrial warehousing. And so you start small by small warehouse or a small, uh, warehouse condo.

In order to protect yourself from the shift in real estate, uh, or shifts in needs as a society as they pertain to real estate. Look around you, look at your habits, look at your friends' habits, because people are still going to restaurants, right? Second generation restaurant space is hot, right? People are still.

Taking their cars to automotive shops, right? That that type of real estate is not going anywhere. We need it. [00:08:00] Truckers still need to store their trucks on somewhere. Where are they gonna store them? Outdoor yard industrial storage yards, right? These, these spaces aren't crashing. They're thriving. So, Next time you hear somebody say, commercial real estate is crashing, either refer them to this podcast or let them know the information that you've learned.

Right? A cr, there's no crash. Yes, office is struggling. Big box retail struggling, but a crash is not a shift. And when shifts come, so do opportunities. So, What questions can I answer for you from you all? If you have any questions, DM me on Instagram at Aviva Real Estate to get started in commercial real estate today.

Head [00:09:00] to my, uh, the notes in my description down below. There is a free guide as to how to get started in commercial real estate. And next, next week, we will be talking about what are the steps to buying commercial real estate. I'm looking forward to it, and we'll see you then.