The Soft Spot Is Behind Us

1st Quarter 2020

Market Watch
by Joe A. Hollingsworth, Jr.

2019 rolled along superb in every way with CEOs making the determination to take down new space for distribution and manufacturing at a fast pace. However, we hit a wall October 1st. It’s like the spigot turned off. Everyone wondered why their phones were not ringing. Hot deals went cold. While there were few exceptions to this, most deals just simply went on pause. By Thanksgiving, things picked up. Then, by mid-December, things were hot gain; and, deals were getting committed. Going forward, we see extremely strong demand and little supply. But, what caused the soft patch?

“Impeach 45” was promoted for 3 years to much laughter! On September 20, 2019, The Washington Post released the news concerning Trump’s talk with the President of Ukraine, which indicated that there were possible impeachable implications. As of today, the House impeached with no Republican votes, and Speaker Pelosi is holding it to hopefully get a better trial with more evidence being presented in the Senate. By December 1st, the American public (and CEOs) knew it was a political ploy, which is one of many that have been tried to oust the President.

While I think the latest hoax is behind us, we also saw 269,000 jobs created in November, which was an unexpected uptick with consumer sentiment becoming more positive and total retail sales looking stronger. So, the realization of the “business of America is business” is coming into full media play. When good business practices and policies are put into place on a relentless basis by a very proactive and disruptive President (whether you like his Tweets or not), the outcome becomes in jeopardy if that leader is guilty of an impeachable offense. One thing that came out of this is the stark realization of how DEPENDENT America’s economy is on good practical leadership that has a vision. When that vision is jeopardized by a series of competing parties’ “free for everyone” policies, then the stark reality sets in. If you didn’t appreciate where we’ve been for the last 3 years (and I’m not saying it’s been smooth, pretty or politically correct), the thought of losing it only to be replaced by unworkable promises is a paradigm reality check.

Let’s keep building industrial properties…the next five years will be the best of our economic lives!

“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