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Buy, Sell, or Hold?

Buy, Sell, or Hold?

An old saying on stock market investing is that when stocks rise, they take the stairs, but when they fall, they take the elevator. Articles in the Houston Chronicle as well as national sources such as this one about falling oil prices and a glut of office space can make present and future investors and users of Houston commercial real estate feel the same way.

But the adage in real estate investing is that you make your money when you buy, not when you sell, and that’s certainly true here. Why? Say you’re prospecting for class A office space either downtown or in a desirable suburb. Would you rather negotiate with a landlord when space is at a premium and yours is the first of 50 phone calls to be returned, or would you rather be the only firm in line for space that’s been vacant for a while? And if you’re an investor, wouldn’t you rather buy into a down market?

While Houston’s economy is more diverse than it’s ever been, there’s no getting around the fact that falling oil prices aren’t good for business. But let’s not forget where prices were, and more important, where they’re going. We’re not likely to see crude at the $110-per-barrel of a few months ago, but the basics of world economics suggest, as this article points out, that a steady price increase should be underway in 2016, hitting $58, with a barrel of crude hitting $90 by 2020. Texas producers are quite profitable at those levels.

Houston commercial real estate is a long-term play, and the next few months should provide some great opportunities for investors and tenants alike. Having been in this business for 35 years and looking forward to the next 35, we think we’re uniquely positioned to have insider knowledge of present conditions as well as to intelligently project the longer term.

It’s not like the Astros, where you think that when they’re in first place, they’ll be knocked out any second, and when they’re at the bottom, they’ll be there forever. Buy, sell, lease, invest–when it’s done objectively through a professional’s lens, there’s always an opportunity.  It might be a good time to contact us no matter where you are in this market.