By Chris Keeley
Over the years, ‘The Dog Days of Summer’ have presented in very different ways in the commercial real estate world. It was normal for a slow down over our long, hot summer months when the market was good. The Deer Valley Airpark industrial market showed significant slowing in the summer months of 2005, 2006 and 2007. This was a normal tendency in a typical to hot market. People went on vacation. A large part of our population would get out of the heat and that was expected and typical in Phoenix. That all changed over the next decade however.
What you might expect in a down market would be decreased activity and deals. Well certainly the deals disappeared. The industrial development, sales and leasing virtually disappeared for a half dozen years. When deals did return, it was mostly tenants moving around or investors picking off foreclosures. There were no new businesses moving into our market. But a strange thing happened during those years. There was almost no change in activity in the summer months in those years. Business people were scrambling hard to keep things afloat and make things work. I didn’t see much drop off in activity over the summer months through the beginning of this decade. There sure weren’t many deals to be made, but everyone in my business was working like mad to survive…certainly no vacations here.
Now, the ‘Dog Days of Summer’ are back. It seems like everyone went on vacation this year. It feels like old times again. We are in a very good commercial real estate market currently which means this summer has seen a very significant slow down. It almost felt like a switch was flipped. The phones were ringing off the hooks and we were running like mad just trying to keep up, and then it almost came to a dead stop. We’ve had some very quiet days this summer and believe it or not, I look at this as a sign that the good times have returned.
I remember years ago that the people in my business, the real estate business, would plan for the Dog Days of Summer. We looked forward to it. We expected the slow down and planned our vacations to coincide with the summer slow down. I didn’t see much of that after the market collapsed. Every one of us was working hard to stay alive, like every other business in town or throughout the country for that matter.
This year was dramatic and it happened instantaneously on the first day of summer. Memorial Day weekend hit and the real estate switch got turned off, at least in the industrial market. Experience tells me it’s only temporary and as soon as school starts back, the activity will return. The great thing about our current market is that when activity returns, the deals will return as well. Many of my phone calls to others brokers in town are forwarded to some out of town vacation destination. Either my competitors are out of town or heading out of town shortly. In fact, I would say a majority of my calls have found brokers on vacation this summer. It’s a sign that the good times have returned. Enjoy while it lasts. I haven’t yet figured out when the next downturn will arrive, but as soon as I know, I’ll let you know.