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Terracap Management Managing Principal Bob Gray believes commercial real estate is taking off.
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Residential isn't the only sector on the mend don't overlook commercial says Bob gray co managing principal of -- cat management and he joins me now on set.
-- so ask you button first of all welcome thank you is this trend and national want her we still we're talking Kumar.
Some real estate are we are we still talking pockets of the country.
It is pockets of the country commercial real state has started to recover and always follows residential you see broad based recovery in residential.
For the most part right commercial is taking off where population growth is strongest and where is that typically.
The southern United States has the fastest population growth and we like Florida particularly because it has the fastest population growth and limits on supply.
OK how is supply in the commercial -- because when we talk about the housing market.
In terms of the real the residential market that's the big issue right now they're not building enough right.
That's true and it's it's the same that the amount of building is very interest thing when you compare it to the pace of population growth -- what we see in.
Commercial real estate in Florida particularly as the amount of speculative construction has been anemic for the last several years as as should be it was -- -- movement of population growth hasn't stopped so the buildings are filling up.
But the bill Ding hasn't begun to there's not new construction so that's pretty putting pressure on prices.
And what.
Companies and industries are filling up those buildings is it -- financial firms -- is -- now the media for.
Ups well on its a variety some of the buildings we we just bought a portfolio of seven buildings that was about -- -- paid about a third of what it cost to build it and in it we have.
Home Depot low Walgreens.
Red Bull -- sleek.
Florida cancer researcher wide diversification and tenants and those are the sorts that are filling up lots of the properties we -- -- -- Where DC -- Is the commercial real estate market helped.
Not yet not but -- it and it depends where -- say it is healthy in Washington DC or New York City or San Francisco.
Boston is getting strong.
But those are places where you can't double your money.
Or unless -- is a lot of leverage we has very little leverage it's a defense oriented strategy.
Our rights away and well the overall commercial real estate market.
-- -- Well.
It varies by market to Detroit in -- -- relatively well off half its its is that location location location so we've we've focused on.
Florida we think probably in 2014 or so you'll be back to -- so you wanna -- now.
Investor make money -- that's well you could come into private equity funds I think those are the best positioned to be able to outperform.
And they take in retail investors to it depends on.
The nature of the fund's entire -- takes in some retail investors you could you -- play.
The reits some of the big reits are very available to anyone and you have high liquidity and to study and carefully.
And in the -- -- saying commercial -- residential but what about on the way down.
Well it's the same thing because of the nature of the leases you can hold on to properties longer in commercial because you have -- longer leases.
We buy renovate.
Tenant and sell quickly so will be out well before any kind of market turned up right thank you for coming on -- -- -- having us thank you.
