It seems like it's nothing but bad news lately: the national economy is slowing down considerably, expecialy in comparison to previous years; the stock market swoops up and down daily; catastrophe hits major companies one by one. It would be natural if your initial reaction is to hunker down and try to hang on to your cash. But fortunes are made in down markets, and opportunities are out there, if you know how to look for them. It is increasingly rare to find the combination of a strong and stable economy, demographic growth, and such a high quality of investment opportunities. Oklahoma City, or OKC, is definitely one of those markets.
The city's economy is based on three main sectors: Energy, Health Care, and Defense. While these industries are important now, they are expected to substantially expand even more of the next ten years. This will ensure the area's long-term health and stability, as well as solidifying a much more significant role in the national economy.
Arguablyone of the most important factors in OKC is Chesapeake Energy. Chesapeake is the country's largest producer of natural gas, and is considered a pioneer in the arena of Energy Technology. In a strategic alliance with T. Boone Pickensand his Pickens Plan, this company has launched CNG Now, a program designed to educate the public on the environmental and political benefits of natural gas.
Another important element of emerging markets is the amount of money and effort spent on infrastructure. This indicates the level of importance the local government gives to building long-term growth and development for the city, which then creates a safe and convenient community for its citizens. In what is considered the largest and mostaggressiverevitalization programs ever launched in the country, the government of OKC, in partnership with the private sector, completed a series of projects designed to attract more buinesses and revenue, and to make OKC a safer and more exciting place to live. OKC is actually one of the country's most congestion-free cities, mainly because of the highway system built all through the city, which helps ease traffic to the city from the outlying areas.Click here to read the Forbes' Magazine article which ranked OKC as the country's 4th Best City for Commuters.
The bench mark pricing for real estate, in proportion to the cash flow, is way under value at the moment. OKC did not participate in the wild real estate speculation of recent years, and has instead enjoyed slow, steady appreciation; we strongly believe that, from Q4 of this year, values will continue to appreciate, as a result of all of the factors that we have outlined above. As strong proponents of cash flow investing, we must point out that 9-10% cap rates are easily obtainable with many of the developments that we at CGI are promoting. (Educated investors know that good new construction properties typically yield a 5-6% cap rate.)The reason that we are able to offer such profitable opportunities is because we have taken the time to find the best builders, develop good relationships with experts in the market, and pre-negotiate deals for our clients that can't be had anywhere else!
