Is it Time to Invest in Commercial Real Estate Yet?

According to this article on, it might be.

Using historical statistics, the current climate can be dissected to some extent. Net Gain describes a recession as a manner of alleviating surplus. There have been 20 prior recessions since the start of the 20th century, all of which have made a full recovery. Statistics show that the length of time between peaks of a recession determines the level of excess, which indicates the severity of the next recession.

In assessing the past 20 recessions, the average number of months between peaks is 59 with the most recent lasting 81 months. The average length of time between peak and bottom is 14 months. Based on this information and fact that the current recession is in its 20th month, investing in income property at this time would be a wise decision.

I've tried in the past to look at various indicators of the 'right' time to buy and have always come up short. I've always felt that if a deal creates cash flow that meets your investment criteria and the risk inherent in the deal isn't higher than the return warrants then it's always a good time to invest in commercial real estate.

That said, if you do need an outside indicator, the one proposed by is probably one of the better methods to follow. Since history tends to repeat itself (no matter how many times we fool ourselves into thinking that, "This time it'll be different. No really! ...why does everybody laugh when I say that?"), taking a look at previous recessions and the inevitable recoveries that followed is as good, or better, a method of market timing as any other.


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