Do We Have a Significant Buying Period Ahead?

Hayes: “Dislocation is good for a buyer if you believe, as I do, that fundamentally the activity at the street level is solid.”

IRVINE, CA—Over the past six months, we have seen significant pullback in asset values and a series of failed processes, particularly in the office segment, which could accelerate due to macroeconomic factors, Pendulum Property Partners‘ founder and managing partner Kevin Hayes tells GlobeSt.com. A real estate firm that owns, operates, develops and manages commercial and multifamily real estate, Pendulum recently launched with more than 3.4 million square feet of product under management. Services offered by the new firm include acqui sitions and dispositions, asset management, property management and construction and development . We recently caught up with Hayes, formerly with Lincoln Property Co. , to discuss Pendulum’s stance on what lies ahead for the industry and how property owners can prepare for it. GlobeSt.com: Why do you feel we have a significant buying period ahead of us? What is causing it? Hayes: We are seven years into a recovery phase, depending on when you peg the start of the recovery. Over the past six months we have seen significant pullback in asset values, and a series of failed processes, particularly in the office segment. It is impossible for me to predict what could accelerate the pullback and to what extent we may see asset values drop. In any event, dislocation is good for a buyer if you believe, as I do, that fundamentally the activity at the street level is solid. There are some large macroeconomic concerns, and we are in an insane election year, but I believe we are looking at a speedbump, not a cliff. GlobeSt.com: What should property owners do to prepare for this buying period? Hayes: Many markets have touched peak asset values again. Some bearish owners are seeking longer-term leases to lock in rates. In the markets we are focused on, we only have a few submarkets that have seen rents back at peak levels. We recommend a hybrid approach—where we have credit and solid rates, we will look at longer term. But why lock in rates where you may not get the benefit of it, if the market weakens and lesser credit defaults anyway? GlobeSt.com: What else should property owners be aware of for the cycle ahead? Hayes: We are supremely focused on what we are good at: being close to the customers/tenants that occupy our properties. Be close to their business, understand what makes them successful, be able to spot early warning signs. When our tenants are successful, we are, too. With developers leveraging development and redevelopment opportunities across all property types, how can you capitalize on this activity?  Join us  at RealShare Orange County on August 16^th for impactful information from the leaders in Orange County CRE. Learn  more .