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Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
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Now displaying: Page 1
Dec 28, 2021

J Darrin Gross

I'd like to ask you, Chad Griffiths, what is the Biggest Risk?

 

Chad Griffiths  

Right now as I see it, the Biggest Risk is that we are forced into another shutdown or lockdown in the market. And I hope that that doesn't happen. I think everybody has fatigue from from this past two years that we've been going through this. And I think everybody wants to get back to business. But I think from the standpoint that if the medical community starts making more issues of this, and if the if some faction of the of the public starts pushing for more, more measures, then then I can see that happening, unfortunately. And if it is for good cause if that is the best course of action, and people agree on it, then then it is what it is. I'm not going to argue it. I'm not going to be that guy with a pitchfork out there saying we can shut down. I just I really hope that we don't. If we do, I'm concerned that how long this is going for, it's just going to lead to a whole set of problems. And that isn't just the immediate ones of of some businesses not being able to be open and the corresponding pressures of revenue and their continuing expenses. But even just what happens with the government's reaction to another shutdown, because I think that that would mean more stimulus, more spending, more money printing and considering everything that we've had to go through in the last two years. I'm concerned that all this spending is just going to lead to some sort of inflation and, and even though the feds are saying it's transitory and and we should be able to get a handle on this, I'm still concerned that this is this is more than just a short term transitory problem. And I like to really only are the I shouldn't say the only, but the biggest ammo that the feds have to fight inflation is just increase in interest rates. So I think that that's coming, I think we're gonna see, I think we're gonna see inflation in the near term, or continued inflation in the near term, I think we're gonna see upward pressure on interest rates. And this This is the status quo like this is if nothing else changes in, in what we're dealing with right now. And interest rate increases is not good for for, for real estate, because it's now costing that much more to borrow. That's a that's, I think that that this happens anyways. But if we have to do another round of of shutdowns and lock downs, and, and the government prints more money and adds more to it than I think that just adds another level to to inflation and, and trickles down to interest rates. So that that's probably the biggest risk that I see right now. But I mean, you mentioned it as well, there's, there's, there's so many areas where we could be terrified of we could be the geopolitical risk, economic risk that like it's endless. And I guess the only solace that I take it in myself is that, in the 16 years that I've been in this business, there's always been risk. Every, every time you open a newspaper at any day, over the last 16 years, and there would have been the media trying to sell us fear about what's all these bad things going on. And I think that that's just, that's a reality that we have to deal with is that there's always going to be that, that risk on the one side, but that's what makes a market and makes a market that there's going to be people that that look at that risk and say, Okay, now we're sellers, and then there's people like me who are more optimistic and not ignoring but maybe suppressing that risk and mentally, who are saying, well, now it's time to buy, like I see a lot of reasons to be optimistic on this. So I think that's what actually makes them a market is that you've got people that are fearful, and you have people that are optimistic, and that the fearful part does weigh on me, I am cognizant of that. But I I still balanced that by just thinking that over the long term, there's there's going to be blips on the radar, there are going to be things that manifest like, like we saw this last two years, there are going to be issues that we have to deal with. But over the long term, US and Canada have shown an amazing ability to keep trending upwards. So I'm still optimistic long term. But that, to answer your question, that's the interest rates being the ultimate outcome, I can see interest rates going up at some point in the future.

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