Earlier this week, while canvassing prospects for one of our projects, I spoke with a local company who invited me over to discuss their needs.  While meeting with them, we spoke about long-term planning, and the five, ten, and twenty-year plans that their board has been working on.  They believe that now is the time to start looking seriously for land here in Honolulu.  While they currently have a facility that is adequate, their long-term needs are for much larger properties and buildings.  They believe, and we concur, that the land prices for them will be severely discounted (up to 50%) from the peak of the market in 2005 and 2006.

Another client recently let us know they are back in the market to buy, because they believe the market is beginning to hit bottom.  It’s not that important to find the exact bottom, but to jump back in near the bottom, because over time, the only way is up.  This client bought nothing in 2005-2007, when they believed property prices were  inflated with low returns and unrealistic expectations for rent growth.  Over the past four real estate cycles, we have seen great wealth created by the long term players who jumped back in near the bottom of the cycle.

To be a great investor, all you have to do is judge the top 1/2 of the market cycle versus the bottom 1/2 of the Hawaii commercial real estate cycle.