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December 2019 Commercial Newsletter

December 2019 Commercial Newsletter

Download Complete Newsletter | Volume 7, Issue 12

 

What’s Your Commercial Real Estate Game Plan for 2020?

With the Holidays now upon us, this can seem like a normal time of year for the pace of life to begin to slow down, and for all of us to begin keeping an eye on the New Year, too. So, with this in mind, what is it that you want to accomplish in commercial real estate in 2020? Do you want to buy an investment property? Do you want to sell one or maybe even exchange into another investment property instead? Or maybe you’ll need to renew one or more leases, or move your company into a new location. Whatever you’ll need to accomplish, now is a good time to begin looking at this, as having the correct game plan in place will be a good idea for you before January 1st ever arrives.

In addition to your commercial real estate game plan, the end of the year is the perfect time to take a personal inventory of where you’re really at right now, what you’ve accomplished in 2019, and what will be important for you to accomplish in 2020. With the very hectic pace of life these days, the Holidays can feel more like a welcome relief to many people, as it’s the one time of year where we actually oftentimes give ourselves permission to slow down.

So what is it that you want to accomplish in 2020? Are there specific business goals that will be important for you to accomplish, and maybe even some personal goals along with them, too? In keeping this in mind, having your goals clearly defined ahead of time can really help you to stay focused on them, and in addition, you’ll want to design the ideal game plan for accomplishing
your goals, too. Because setting your goals is one part of the equation, but designing the path to follow that you believe will have you accomplish your goals is extremely important also. But in keeping this in mind, when you’re in the heat of battle, with so many people and interruptions constantly coming at you to take you off track throughout the year, having your game plan to rely
on and to stay on course with will definitely become even more important than ever!

When it comes to your commercial real estate goals, it will be helpful to outline your timeline for these, and to make sure that you’re taking action in accordance with that timeline. So if, for example, one of your goals involves relocating your business, you’ll need to allow plenty of time to locate the new facility, to negotiate on it, and you’ll need to allow the appropriate length of
time to get the new facility ready for you, too.

Whatever your commercial real estate needs are in 2020, I’m here to help, so give me a call whenever you’d like to talk about what it is that you really want to accomplish.

The Ugly Truth Behind Some Good-Looking Numbers   

New Data Offer Hints of Just How Fragile the Consumer Sector Could Be

“Retailers mentioned higher costs, which contacts in some Districts attributed to tariffs. Firms’ ability to raise prices to cover higher costs remained limited, though a few Districts noted that companies affected by the tariffs were more inclined to pass on cost increases.” – Federal Reserve Beige Book, November 2019

Even in a holiday-shortened week, the data keeps rolling in. The end of the month served up lagging data for October (and some even laggier data for September), but also some leading data for November.

The second estimate of third quarter gross domestic product belongs to the former category. The data was revised higher, coming in at 2.1% versus 1.9% in the initial reading. While this is good, of course, it tells us little new about the economy as we’re now closer to the end of the fourth quarter than the third.

The new estimate of GDP was revised higher partially due to greater spending, but mostly due to increased inventories (which tend to be an ephemeral source of growth, often reversing in subsequent quarters).

 Looking ahead to fourth quarter GDP, new data shows a likely strong boost from a smaller trade deficit in October, and $4 billion better than in September. The story behind the numbers, unfortunately, is ugly.

The trade balance can improve even as U.S. exports decline, as long as imports decline by even more. That’s exactly what happened in October. Most notable in the details, imports of consumer goods fell by a sharp $2 billion from the prior month. As we have mentioned often recently, if the U.S. consumer is strong, data points like this and fresh signs of a retail slide are quite unusual.

The most obvious explanation for this dramatic shift is the imposition of U.S. tariffs on imports from China, which have been ramping up throughout 2019, with the threat of even more looming ahead in less than a month. The U.S. administration has generally avoided placing tariffs on consumer goods in its initial rounds, so any future goods hit by tariffs likely means more consumer goods will be impacted.

The Week Ahead …

The news stays busy, giving no time to recover from Thanksgiving hangovers. Friday’s jobs report should testify on whether all of our hand-wringing on a weakening labor market has been worthwhile. Not mentioned above for sake of space, the recent decline in initial jobless claims eased some concerns, but far from conclusively.

Also, businesses report confidence levels to the Institute of Supply Management, with the manufacturing sector report coming out Monday, nonmanufacturing following on Wednesday.

The Federal Reserve is likely to be quiet leading into its final meeting of the year from Dec. 10 through Dec. 11. In his latest remarks, Chairman Jerome Powell admitted the central bank has reassessed its estimate of the neutral rate downward this year. This has been based on low inflation in spite of such low unemployment.

Between the chairman’s comments and another inflation miss — the core personal consumption expenditure price index saw only a mere 1.6% gain year over year — the committee is likely to continue to signal inaction.

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