After the Crash 2009 and Beyond
The lesson I learned in 2008 is how vulnerable investments in our own stock market can be. For the third time in less than a decade, we have seen a major (30 % or greater) loss in value. In 1999 it was the bursting of the dotcom bubble, 2001 & 2002 the reaction to the 9/11 attacks, and 2008, the culmination of a series of poorly conceived government economic policies. We take no prisoners here. Both parties, and those who run our Federal Reserve, share plenty of blame.
With that said, our foundational premise remains: There are Seven Reasons Why you should take action to own your business commercial property as part of your long term financial plan to provide a more stable base and build greater wealth. These reasons are both demographic, and economic:
1. National Population Growth: we’ll add 82 million people to our population by 2029.
2. Western US Job Growth: western states will experience a 40% increase in the number of jobs, and absorb much of that population growth.
3. Government Monetary Policies: at all levels work at stimulating development efforts, and don’t think inflation isn’t lurking in our future.
4. Real Estate Fundamentals: appreciation, equity buildup & preferred tax treatment make real estate an outstanding vehicle to grow and protect wealth.
5. Beacon to the World: despite our problems, we are still a haven for financial investment, and you can expect foreign investment in the US to triple in the next decade.
6. Entrepreneurial Engine: small business is what drives job growth, and they will harness commercial property at ever increasing rates.
7. Boomer Wave Crests: As with other aspects of this wave it will drive commercial real estate development to cater to their needs.
The Beat Goes On:
Drums keep pounding a rhythm to the brain is the opening line to a popular song from the 60’s. The rhythm we refer to has been the steady growth of population Clark County has experienced in the past two decades and which will continue over the next two decades. It is what puts Population Growth, first on our hit parade of Seven Reasons Why you should own commercial property as part of a diversified financial plan.
Since 1989 we’ve watched the population of Clark County increase from 238,000 residents to well over 400,000. A recent Columbian article on population growth stated that we had over 12,600 new comers arrive during 2008, and that the total population may have topped 428,000. This flow of new residents has created the dramatic changing landscape we see east of I-205 and in the corridors along Mill Plain Boulevard, 164th and 192nd avenues.
Our growth trend since 2000 has been close to 2.6% annually. If the US Census Bureau projections are accurate, this upward trajectory will continue, and Clark County can expect to have over 600,000 residents by 2029. Clark County validated this with their 2007 submission of the Comprehensive Growth Management Plan to the State where they foresee the likelihood we will have between 579,000 and 673,000 folks living here then.
An additional reason we can feel confident this trend will continue is that while we are expected to add 82 million citizens on the national level., taking us to 362 million, not all regions are experiencing growth at the same levels. The West and the South are experiencing far greater gains than the Midwest and Northeast. Western states will experience an increased population of 29 million, the southern states 63 million and Midwest and Northeast combined 10 million new residents.
Let’s focus just on our region, Washington and Oregon. According to the US Census Bureau, our state is expected to add 2.7 million new residents by 2029, for a 46% gain. This will make us a State of over 8 million people, and rank us 14th in the nation. Oregon won’t lag far behind, adding 1.4 million and will become a state of almost 5 million residents. Both states growth projection data and plans confirm they are anticipating this new reality.
So what are the implications of these numbers? As the title of this article says, the beat goes on. Population growth will drive more commercial property development, as it has for the past twenty years. The cities of Seattle and Portland are the two hubs around which the northwest population thrives. One scenario as laid out by Robert Land of the Bookings Institute, and outlined in a January 2006 Business 2.0 article, foresees that the majority of all our nation’s population growth will end up within ten “megapolitan areas” that will dominate the country. If he is correct, the corridor between Portland and Seattle, which he dubs “Cascadia” will steadily fill in. Here in Clark County, we sit right on this path of continued growth. Lang’s second supposition is that this round of population growth will set off a real estate construction boom that will almost double the amount of square feet of commercial property we currently have in existence.
This is a wave you want to be in front of.