No holiday slowdown for commercial real estate

Commercial real estate tends to avoid a holiday slowdown.

While the housing market tends to slow down over the holiday season, the commercial real estate industry typically sees a rise in activity during the finals months of the fourth quarter, according to Jim Spain, a Colliers International regional managing director.

"I think the popular impression is that brokerage slows down at the end of the year and people say nothing happens, or not a lot happens, between Thanksgiving and New Year's, but December is traditionally our strongest month for revenue, and that occurs in brokerage when sales transactions occur," Spain told the San Diego Daily Transcript. "We typically have good Decembers. December, many years, is our best month of the year."

Spain pointed to activity during December 2012, a particularly robust month due to the capital gains tax increase, which went up 15 to 20 percent in 2013. He said while his clients rushed to to beat the rising tax that year, there aren't any incentives to strike such a scramble this year. Still, he doesn't forecast any slowdown over the holiday season.

"I don't think we're going to see that again necessarily because that particular factor is not at play, but it's going to be a good month," Spain said.

Spain said there are incentives for brokers to complete closing before the end of the year, which could be a reason for the lack of deals during the waning months of the year.

"Whatever they close in December goes to their annual earnings for this year, and annual earnings determine various things for them — it might determine where they end up for brokerage standings within the office, which is a matter of prestige, and brokers care about that very much," Spain said.

Distinguishing your commercial business
Darcy Miramontes, executive vice president of Jones Lang LaSalle, told the Daily Transcript that it's crucial for commercial real estate companies to differentiate between new business acquisitions and existing business. New business tends to slow during the holiday season, while existing business usually surges at the end of the year.

"I think traditionally there has been a slowdown during the last quarter of the year," Miramontes said. "It happens annually, typically in terms of getting new business underway, though we have traditionally been busy at the end of year with closings. So I would say new business activity slows down, but closings almost pick up pace, since some people have fourth quarter deadlines."

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