3rd 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.” Today, there still are a great number of variables: 1) the tax cliff of 2013; 2) Greece and the Euro; 3) the election of the President and whether the Senate goes conservative; and, 4) the stability of international economic growth, etc. For industrial real estate, we see things beginning to pick up momentum above a trepid last twelve months with a “hockey stick” looking economy from March 2013 on. With this prediction, we are factoring in: 1) The national mood will be more conservative, practical, and debt cognizant; 2) We will have a new President and a conservative Senate; 3) The tax cliff and debt issues will not be gracefully solved but on a much better path; and, 4) The taming of the entitlement stampede will begin.
So, how does the above affect industrial real estate? We believe precisely right now would be a great time to purchase leased facilities. While this trend has been building momentum during the last year, it is now evident that a lot of “parked money” is coming off the sidelines and making decisions not only to purchase grade A industrial facilities with creditworthy tenants, but now B+ properties with weaker tenants. We believe this trend will continue to strengthen.
As I write this article, I have just returned from the Park City, Utah retreat for Governor Mitt Romney. This article is partially based on that experience. The retreat was 800 of Romney’s most powerful national supporters. The quality and substance of those in attendance were beyond anything that I have ever experienced. For two days, we reviewed current state by state polls, polls indicating wrong/right track results, resulting momentums, and projections. We reviewed the funding cycles in comparison to previous campaigns and projections going forward as well as the targeted groups of voters and the potential 10 swing states that will determine this election. Overall, with a very few exceptions, every one of these trends looks very positive.
What really impressed me was the youthful, energetic, and Reaganistic-like “Morning in America” mood and feeling of the entire event. They conveyed their belief that this is the chance to recapture the heart and soul of “American Exceptionalism”. It is true that sometimes a fluke can happen resulting in Romney losing, but it is also true that momentum could magnify Romney’s win. Most of all, it requires a lot of hard work, but it is definitely doable. We as a company are betting on this outcome. 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. Therefore, now is a great time to buy.
"I fully recommend working with The Hollingsworth Companies if cost or time driven schedules play a part in your company's opportunity because they do deliver within budget and on time with no change orders or surprises." -- David B. Sutherland, CMS Companies
"Southern states are home to 50 million more residents than the Northeast. In corporate growth, only the South has shown a positive net migration in the early 21st Century." -- Plano Star Courier
"We invited The Hollingsworth Companies to our Atlanta Offices. Within two weeks all negotiations were completed and the lease was executed. From beginning to end, it only took 45 days to complete our requested up fits." -- David B. Sutherland, CMS Companies
"The bottom line is that we could not be more pleased with our Hollingsworth Companies experience." -- Karl F. Hielscher, President and CEO, Metl Span
“From greenfield startup to becoming a national industry leader 10 years later, Hollingsworth continues to play an invaluable role in Service Center Metals growth and success.” -- Scott Kelley, President and CEO, Service Center Metals
"Hollingsworth entered an agreement to ensure quick delivery of the pre-approved standard building sizes . We are committed to deliver the structural steel, ready for erection, in just 6 weeks from receipt of a final building order." -- Jeff Carmean, General Manager, Nucor Building Systems
"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
