{"id":1004336489,"date":"2019-07-05T04:53:47","date_gmt":"2019-07-05T12:53:47","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004336489"},"modified":"2019-07-09T11:18:27","modified_gmt":"2019-07-09T19:18:27","slug":"despite-record-growth-cre-industry-should-plan-for-downturn","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/despite-record-growth-cre-industry-should-plan-for-downturn\/","title":{"rendered":"Despite Record Growth, CRE Industry Should Plan for Downturn"},"content":{"rendered":"
\"\"<\/a>

Image courtesy of Pixabay.com<\/em><\/p><\/div>\n

The U.S. economic recovery turned 10 years old on July 1, 2019, marking the longest period without an economic recession ever. However, according to RCLCO Real Estate Advisors\u2019 latest RCLCO Sentiment Survey, players in the commercial real estate industry should still plan for the next downturn.  <\/p>\n

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READ ALSO<\/strong>: Bulls Outnumber Bears in CRE C-Suites<\/a><\/p>\n

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The expanding U.S. economy has been a boon to real estate. Positive operating fundamentals persist but the slower pace of growth rates along with capital market risks suggests that real estate\u2019s \u201clate stable<\/em>\u201d stage, or Stage 6, may be coming to a close, placing the \u201cearly downturn<\/em>\u201d stage, or Stage 1, on the horizon. From Stage 6 to Stage 1, net operating income will go from moderating\/flat to declining. Additionally, the yield curve\u2019s steady hold in an inverted form over recent weeks signals risk of recession within the near to medium term. The changing conditions in the economy and the real estate market mean real estate owners need to act now, per the report.<\/p>\n

No sitting idly by<\/strong><\/h2>\n

For the majority of commercial property owners, Stage 6 of the real estate cycle\u2014which is apparently fading fast\u2014is the time to sell. Any assets that would be unwanted post-peak should be discarded now, as they may be hard to sell at the desired price after the downturn is underway. Additionally, this \u201clate stable<\/em>\u201d stage is a prime time for refinancing portfolios with low-debt, and for amassing a repository of funds for capitalizing on dislocations in the market during the downturn. RCLCO anticipates that the disruptions of the impending downturn won\u2019t rise to the level of those seen during the Great Recession, but opportunities will abound.<\/p>\n

\"\"<\/a>

Image courtesy of RCLCO Real Estate Advisors<\/em><\/p><\/div>\n

Once Stage 1 hits, and it could do so at any time per the report, asset values will drop, and favorably termed credit will likely be more difficult to obtain. Investors that stored dry powder from Stage 6 should get capital in place to take advantage of opportunistic buys.<\/p>\n

There\u2019s no way to determine precisely when Stage 6 will move into Stage 1, so RCLCO promotes early planning and continuous monitoring of shifts in the economy and real estate, as well as a solid plan for each stage of the real estate cycle. Anticipating change and acting in a decisive and timely manner are key; the firm notes that historically, hesitation has resulted in failure. Finally, RCLCO reiterates that while a downturn is probable between now and 2022<\/a>, nothing is certain except for the necessity of contingency plans.<\/p>\n","protected":false},"excerpt":{"rendered":"

The economic expansion just became the longest in U.S. history, but now is the time to prepare for the next downturn, contends RCLCO Real Estate Advisors.<\/p>\n","protected":false},"author":969,"featured_media":1004336492,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,23891,21742],"tags":[36905],"class_list":["post-1004336489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-national","category-latest","tag-rclco"],"acf":[],"yoast_head":"\nDespite Record Growth, CRE Industry Should Plan for Downturn - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/despite-record-growth-cre-industry-should-plan-for-downturn\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Despite Record Growth, CRE Industry Should Plan for Downturn\" \/>\n<meta property=\"og:description\" content=\"The economic expansion just became the longest in U.S. history, but now is the time to prepare for the next downturn, contends RCLCO Real Estate Advisors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/despite-record-growth-cre-industry-should-plan-for-downturn\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2019-07-05T12:53:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-07-09T19:18:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/07\/Capture-Barbra-Pixabay.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"820\" \/>\n\t<meta property=\"og:image:height\" content=\"599\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Barbra Murray\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/despite-record-growth-cre-industry-should-plan-for-downturn\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/despite-record-growth-cre-industry-should-plan-for-downturn\/\",\"name\":\"Despite Record Growth, CRE Industry Should Plan for Downturn - 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