Well, what a tumultuous year 2020 has been so far, especially for the investors amongst us. This is a year which will have seen some whales reduced to sticklebacks and some small investors taking smart moves which have catapulted them into the next wage bracket. Now that things have leveled off ever so slightly it is the perfect time to start looking at exactly what the future will hold for investment, and those with liquid cash are currently licking their lips at the prospect of big gains in the future. One area which is surely going to see an increase in availability and a reduction in value is the real estate market and there is going to be a great deal of opportunity in particular with commercial properties for sale, and here is why.
Businesses Going Bust
There have been some companies who have done very well during this crisis but the majority of them are based online or offer an essential service. This has left an enormous amount of businesses in a vulnerable position and despite government support it is clear that we are going to see many businesses which will have to cease trading. The result of this will be the freeing up of premises and that will give investors a great chance to take some property off those businesses who owned their own premises.
Downsizing
Even those businesses who have been struggling but don’t have to sell up, they will recognize the importance of having to streamline the business in order to survive and that to will free up a great number of properties. This in fact appears to be more likely because some businesses will have to take hard decisions in order to ensure their survival and often the value of the property which they have will be the first thing where they will look to squeeze some cash out of.
Private Investors
This pandemic has not just hit businesses hard but there are also a great number of investors who got things wrong or how were tied up in something they couldn’t get out of and they are going to feel the pain here as well. This is not just about big investors who own commercial real estate but also investment groups who pool money together in a vehicle which they then use to invest in real estate. Whilst funds can be more robust because of the way that they raise money to invest, it is clear that there will be many who have pulled their funds out, and that could prove to be a good opportunity for investors with cash to then get involved. What we may also see is funds who are looking at different investments and then look to sell off commercial real estate before the value drops too far.
This is a great time for investors who have liquid cash, keep it and wait until the inevitable opportunities arise.