Imagine a dream where your riding shotgun with a bi-polar crazy uncle going over an icy bridge. Half way across, he slammed on the economic brakes careening your financial wagon into a state where only the fundamental laws of inertia could get you to the other side. Now, realize this isn't a dream and that 99.9% of us have been driving thru the dysfunctionally "organized" chaos at the mercy of "leaders" with a remarkable history of failure.
As most Americans return to normal life, we are waking up to a realty uncertain if we are about to witness to an unprecedented crash in real life or if our fears are just a form of subconscious PTSD from the great recession which manifests as night terrors.
I've heard it said that following politics will make one go crazy, and the same with is true with respect to macro economics. Following both with the hope of learning how to play the long game in commercial real estate will only prove that we've either gone mad, are lucky or blissfully ignorant.
I recently served a national big box chain as a subject matter expert in a dispute about property taxes. The underlying question was if the chain was paying to much or to little based on the value of the real estate. A hard reality is that price and value not the same thing and both are subjective measurements, and viewed differently depending on the stakeholders position. The investor in a 1031 exchange, a developer seeking a ground up project, the Tenant, the bank and the municipality will all have their own points of view.
When the question of how the pandemic affected values is asked, the root of any answer that contains supply chain or supply and demand curves should give equal consideration to how how the government responded lockdowns, curfews, mandates, and the printing of money. As we "get back to normal" and attempt to forecast the economic conditions and how they impact commercial real estate, we can't forget how bureaucracies cure was worse than the disease.
I am not an economist, politician, or health professional. I just sell real estate and believe politicians don't what the hell is going on, how long it will last or how to fix it. A unifying truth that most agree upon is that core systems are broken and we need a course correction. If migration patterns say anything about the last few years it's that people flock to areas where they feel safe, and less constrained by government. Over 40 million people have left deep blue states for red ones. No surprise that if follows that retail sales are up in red states and down in blue states.
This is not a political statement, just an observation that investment chases opportunity and in places like Tennessee, Texas, and Florida appear to be safer havens for retailers than NY, California, and Colorado.