EDITOR’S COMMENT If it’s not Larry Fink’s letter to shareholders that provides a temperature for how real estate is really faring, it’s the Berkshire Hathaway AGM and a pair of 90-plus-year-old investors telling the market like it really is.
When Fink, Warren Buffett and Charlie Munger start talking, investors around the world start listening. And if you are in commercial real estate, Buffett and Munger didn’t offer much cheer over the weekend. The pair warned that the global real estate market was starting to suffer under the pressure of rising borrowing rates and said they both remained bearish on commercial property.
The “hollowing out” of downtowns, said Munger, was going to be significant and “quite unpleasant”. And not just in the US. A new set of real estate owners would start to emerge, said the pair, as those who took advantage of cheap money realise that property isn’t always as easy as it looks.
“It all has consequences,” said Buffett last weekend. “We are starting to see the consequences of people who could borrow at 2.5% and find out it doesn’t work at current rates, and they hand it back to somebody that gave them all the money they needed to build it.”
It is always hard to hear tough news about the sector, especially when it comes from players you know have seen a cycle or three in their time.
But it serves as a reminder. It is very easy to get caught up in the good times, to enjoy the spoils that our economy has provided for us over the past decade. But the real talent in real estate comes in riding out the storm. In focusing on the fundamentals, in picking the winners and making sense of the losers.
And that enables me to make the most spurious of links.
The market in which we operate today is tough, but it is not impossible. This market – you – always finds a way. There is always a deal to be done, a place to build up, a property to repurpose. For every hard day there is something we should celebrate.
And that’s exactly what we want you to do at this year’s EG Awards. You have a little while to wait until the big party (mark 17 October in your diaries now), but time is fast running out for you to find reasons to be cheerful about our wonderful sector and enter.
Just one week remains for you to be in with a chance to take home one of the most coveted (and sustainable) gongs in property. A total of 21 awards will be handed out on the night to celebrate all the great work that real estate does – for the economy, for the planet and for
its people.
We are looking for the very best consultancies – firms that can show that they adapt to tough times, that they are innovative and can provide best service to their clients, whatever the climate.
We are looking for businesses that are building homes for the next generation, that are enabling our goods and services to be stored, transported and delivered, that are providing workspaces that will mean our downtowns aren’t hollowed out, that they are vibrant places where people can build careers, families and futures.
We are looking for firms that have a positive impact on our planet through simple and complex solutions, that are creating communities for people to thrive and are doing all of that with inclusivity at their heart.
And we are looking for that special someone. That individual who has made an outstanding contribution to this sector. Who has changed it for the better. And who might not even know they have done it yet.
So while Buffett and Munger may be bearish on this market, I say bull to that. The environment may be tough, but this market has plenty to celebrate. Just make sure you do your bit to show it off.
Everything you need to know about those 21 categories and how to enter can be found at https://blog3.s47657.p1364.sites.pressdns.com/eg-events/eg-awards-2023/
To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews
