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>>The real estate bubble burst about four years ago. What's the state of commercial
real estate today?
>>First, you have to separate commercial real estate from residential real estate. You have
to think about where you live and what's applicable.
In my hometown of St. Louis, there's not a need for additional office buildings; it's
still considered to be a tenants market. >>But apartments, especially garden-style
apartments, they seem to have a strong demand and
it does have something to do with the bubble. The bubble caused a lot of people to downsize
or to not purchase homes. And then we had the
issue of the banks coming in and not make financing as easily available to people, so
the demand for apartments in most parts of the
country has gone up. >>When someone wants to invest in commercial
real estate, what should they be looking for? >>Sheldon: The first thing they should do
is to think about their objective. ARe they interested
in income, are they interested in growth or a combination of both. That will lead them
down the path that they should take.
>>What's the near and mid-range future for commercial real estate?
>>It's always hard to make a prediction because one thing you can't account for is competition
from new building. So there's really two factors: There's the supply-and-demand issue and the
second has to do with the cost of replacement because if someone were to build a new
property, it's going to be at a much higher cost than an existing property because of
increased costs the past few years of materials and
labor (salaries).