Economists are mostly prophets of doom these days, but Mark Dotzour, chief economist
and director of research for the Real Estate Center at Texas A&M University, has
some good news to share.
"Underlying investor demand for real estate is very strong," he says. "REITs have
raised a lot of money and need to invest it. Private equity funds have raised cash and
haven't found enough deals either. They are faced with the prospect of buying property
or giving the investors their money back. Cap rates for trophy properties and
agricultural land values are quickly approaching the bubble levels of 2007."
He also has some good advice for Washington. "The best thing that could happen to
the economy would be for Congress and the president to adopt Simpson-Bowles (proposed
deficit-reduction legislation) and begin a credible program of balancing the budget
over a 10-year period."
As for commercial real estate's recovery this year, he's keeping his eye on small
businesses. "I'll be watching monthly surveys from the National Federation of
Independent Businesses," Dotzour says. "Until small businesses get more optimistic
about the future, hiring will not happen."
For more from Mark Dotzour, attend CCIM Live! Oct. 12 – 16 in Las
Vegas, where he'll provide a keynote presentation on commercial real estate and the