Have you wondered why there are fewer business start-ups this time around?

In previous recessions as companies started the cycle of downsizing, the commercial real estate industry saw a fairly immediate slow down in deal activity.  It would go something like this:  As larger companies felt the pressure to reduce costs, employment would shrink, expansion plans would get put on hold and medium to large sized real estate deals would fall off the radar screen.  After the shock of a market downturn, we would typically start to see “pockets” of leasing and sale activity from the user community as the “laid-off” employees began to emerge as small business start-ups.   Many of these small businesses were able to do this by way of leveraging their real estate assets and using the money to fund these new ventures.  As a commercial real estate broker I used this as a gauge to determine when my own trade area was starting to come out of a down market.

We haven’t seen this occur this go-around.  This may be a good thing in some respect, as always believing that real estate values will forever move higher is part of the reason we are in such a prolonged recession.  On the other hand, perhaps a blanket policy such as what is discussed in the article that follows is no different than crimping the hose entirely rather than just adjusting the flow.  It will be interesting to see how we emerge with this “employment opportunity” all but gone as the U.S. tries to navigate itself out of our current unemployment woes.  Zoliath.com would love to hear your thoughts.  Read Article

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