Keeping My Neck Stuck Out

4th Quarter 2012 Hotline

Market Watch
Southern Industrial Development

by Joe A. Hollingsworth, Jr.

In our September 2011 hotline article, we said, “Once again we see that business hates variables and can only factor very few variables at one time in the decision to deploy capital.” In July 2012, we indicated that “we see things beginning to pick up momentum above a trepid last twelve months with a ‘hockey stick’ looking economy from March 2013 on.” Then, we followed it up with, “Regardless of which party you are in, the sense of optimism and excitement will clearly ignite this economy by the election of Romney by March 2013. In fact, I would like to be on record as saying three years of 5% GDP increase is obtainable.”

As my immediate team knows, I am very seldom right, and I often provide much humor for their water cooler jokes. So, it’s with a less than perfect track history of predictions that I continue to stick my neck out and say, “The above all remains true; and, in the months of August and again in September, our new prospects across our entire footprint were up five fold.” Not only that, but the proposals for build-to-suits were more definitive in nature and more time driven. Furthermore, the icing on the cake is that the quality of our shows for industrial property has gone from the general manager or plant engineer to the CEO or CFO.

All the above indicates to us that those with capital to deploy are positioning themselves for a “first out of the gate” break for a much higher GDP growth. I have had a tremendous number of positive comments on our prediction of a Romney victory along with the fundamental reasons why (in the last article), and it is apparent that more and more smart money seems to be betting on a strong rebound. Additionally, the smart money is buying insurance by making heavy donations to those candidates representing common sense business interests and conservative principles.

After several dry years of lackluster offers for existing prospect owners, now is not a bad time to get out if you are under any kind of financial pressure at all. However, our sentiments are that there are really more reasons to buy and there will be a huge surge in demand once the market has clarity of our election and tax cliff measures. In fact, we see cheap usable and flexible older structures disappearing fairly fast. From March 2013, we are on a 5% GDP increase for 3 consecutive years – so, position well!

“Joe Hollingsworth participated as one of our first equity investors. In addition, Joe Hollingsworth has served as a board member and leading advisor for strategic planning and direction.” — Scott Kelley, President and CEO, Service Center Metals