July 26th, 2010 |  Articles, News
Hot off the wire, Facebook announces that they have hit 500 million users(that’s more than the entire population of the United States!). Forget the fact that we now have another college aged billionaire, this is concrete proof that social media is the new communication method. I still know MANY business people who are social media hold outs. They “don’t like it”, “don’t trust it”, “don’t have time for it.” To each his own, but with the monumental leaps that technology is taking every 2 years, a business person will be left in the dark trying to figure out how to get ahead and how to get people to hear them.
—continue reading
July 14th, 2010 | Articles, News Economist Dr. Sam Chandon Borrowing from Chief Economist Dr. Sam Chandon’s Midsummer Employment Outlook we are finally generating the proof to the notion we have been shouting from the rooftops for close to a year now; The stimulus money spent on job creation was spent incorrectly! ” The Bureau of Labor Statistics released the preliminary Employment Situation report for June last Friday. As expected, non-farm payrolls fell as 225,000 temporary Census workers completed their work terms. Across the public and private sectors, non-farm payrolls dropped by 125,000 jobs; the sharp decline in government employment was partly offset by a net increase of 83,000 private sector jobs.” If it is still unclear, the jobs the administration has claimed to have created were temporary(roads, census) or simply more government infrastructure. While those temporary jobs are somewhat needed, it is irresponsible for the administration to claim “success” in stimulating the economy when those jobs had a 6 to 12 month shelf life. The other foolish move is creating thousands more government infrastructure jobs in a failing economy. That is a kin to a private company hiring 100 new employees as they are about to declare bankruptcy… It just doesn’t make sense and sets the american public and investors up for failure as they start to bet on recovery.
Private jobs are sustainable. Private jobs create tax revenue to support the needed government programs. Private jobs create confidence, puts savings in the bank and food on the table. Invest in business, not government!
June 28th, 2010 | NewsBy James F. Morgan, CCIM
The Jacksonville Industrial market has been impacted, with 1,378,000 SF added in 2009 and approximately 7,424,000 SF vacant out of the 70,720,000 SF currently in the market. In 2009 we showed a positive absorption of 709,000 SF. Rents slid over the last two years to $4.06 per/ SF as an average rent rate, which is a slight decline. Currently contraction (shedding of space), and leased, but under utilized, space exists. Depending on the speed of market recovery will affect how these tenants move to right size/ right price. The market realities are that pressure has been pushed from “A” space where there is an abundance of distribution in the neighborhood of the port area, where significant Jacksonville Port Authority expansion activities were slowed by the recession, facilities that remain available for absorption, which has occurred but on a limited basis.
The good news is that the Jacksonville Port Authority has reported an increase in cargo. They had their container cargo increase from 700,000 to 750,000; however, their auto cargo has decreased from 650,000 in 08’ to 420,000 in 09’ and remains low, but is increasing. The primary export market for the Jacksonville Port is Puerto Rico, and the primary importer is Colombia. We are seeing new activity with Mitsui, currently bringing in two ships regularly, and recently adding a third ship on a weekly basis serving Vietnam, Singapore, and South China. This represents new ports and markets for the Jacksonville Port. The Mitsui expansion should continue to five ships weekly over the next year or two, and there are additional carriers that are coming through the Suez Canal that are projected to come to the Jacksonville Port.
Read rest of post at SVN Florida →
June 14th, 2010 | ArticlesBy: Jerry Anderson, CCIM
- Get in front of market conditions.
- Spend 5-10% of your time educating yourself.
- Spend 10% of your time marketing yourself.
- Spend 40% of your time with prospects/clients.
- Immediately improve your efficiency/effectiveness.
- Connect with a personal mentor or coach.
- Immediately implement “contact management” software.
- Improve the quality of relationships with 10 prospects.
- Have past clients write to target prospects.
- Probe, study and understand controllers of product.
- Establish and focus on solid relationship with #9 and #10.
- Be less deal driven, focus instead on relationships.
- “Unbundle” your services and charge fees for your time and expertise instead of giving them away.
Remember – Strategy and implementation are separate functions. In many cases there may never be implementation.
Working “on the come” hoping to get paid if there is implementation should be history for you.
What I didn’t tell you at the beginning of this blog is that this is from a presentation I made at the annual NAI conference in 1993!!! Egads, it is back to basics ladies and gentlemen. 17 years later, what is old in the CRE brokerage business is still critical, not only to thrive but to survive.
June 11th, 2010 | NewsSource: Multifamily Executive
Multifamily Executive reports: The multifamily acquisition market has been building momentum in the second quarter, with cap rates declining on a national level and the gap between buyers and sellers narrowing. Frenzied bidding has some long-term holders debating their strategy.
Typical sellers in the past two years seemed to be only those who had to sell. Many owners who bought at the height of the market have remained on the sidelines, not listing their properties due to the perception that rents and values will escalate two years from now.
But among longer-term holders, there’s been a shift in attitudes in the past 90 days. The bidding on high-quality multifamily assets has become so fevered that owners are beginning to ask themselves if now really is such a bad time to sell.
“For quality assets, there’s intense competition, and cap rates are declining because of these assets,” says Ben Thypin, senior market analyst at global market research firm Real Capital Analytics. “Owners see this cap rate environment, and the financing environment with Fannie and Freddie, and think that maybe this is a good time to get out and capture some of this unique pricing environment.”
View the full article on Multifamily Executive: As Apartment Cap Rates Fall, Market Heats Up
June 2nd, 2010 | News
 Monthly Distress Overview
I found the recent article and report from Real Capital Analytics very enlightening about the current distress happening in the commercial real estate markets. The following is an overview of that article.
After several months of relatively flat growth in the total dollar volume of troubled property, new distress spiked in April by almost 41%, adding $12.8 billion. It was the largest increase so far this year, and brought total outstanding distress to $184.6 billion; altogether, cumulative distress this cycle has reached $239.0 billion.
The climb in April was due largely to the office and hotel sectors, both of which saw major assets and portfolios fall into distress. Also contributing heavily to the spike in new distress was Morgan Stanley’s default on its $2.0 billion Revel casino-hotel development in Atlantic City. Additions to trouble in other sectors, however, either declined or were on par with recent levels. The nearly $13.0 billion in new distress in April is likely not an aberration: already, new distress in May is approaching $10.0 billion.
April’s distress totals reflect, in part, the emerging effects of a changed approach to the restructuring of troubled CMBS debt that began last September. At that time, the IRS issued guidance that afforded special servicers greater flexibility in modifying loans prior to an imminent default. A stellar example of this is the 17-property office portfolio that Beacon Capital Partners, though current on its obligations, placed into special servicing ahead of any default (see Office). Since borrowers and special servicers can restructure assets that are not yet troubled, more borrowers have been moving to secure modifications before losing control of an asset. The restructuring pipeline is almost certain to increase across almost all property types going forward. Indeed, in late May, an affiliate of bankrupt Lehman Brothers Holdings won court approval to restructure $5.2 billion in CMBS debt on its 2007 acquisition of REIT Archstone Smith, made with Tishman Speyer.
Reflecting this trend, 60% of the new trouble was tied to assets backed by CMBS, up 5% from March. Additionally, there was significant growth in the number of new CMBS-backed properties that fell into distress. This not only reflects the changes wrought by last fall’s IRS guidance, but also could point to a step-up in new trouble on larger assets backed by bank loans.
Given this, the lower level of restructurings during April seems surprising. However, it is more likely that, while many borrowers have recently begun restructuring talks with their special servicers, those discussions have not yet resulted in agreements, in part because special servicers may be overwhelmed by the volume. In addition, large corporate restructurings, such as that of General Growth Properties, can skew data in a particular month or period of time. GGP’s debt restructuring accounted for a large portion of the spike earlier this year, and the restructuring of Extended Stay Hotels will create a similar spike in coming months.
Borrowers have also worked to restructure loans held by banks ahead of a potential default. For example, Blackstone used this pre-emptive means to restructure the mezzanine debt on its huge privatization of Hilton Hotels.
One corollary to the ongoing wave of restructurings is the somewhat lethargic pace at which lenders are reluctantly reclaiming assets as real estate owned (REO); that may be even more pertinent for resolutions involving sales out of distress: April’s $1.3 billion of resolutions was the lowest since October 2009. Both of these trends continue to frustrate waiting opportunistic capital.
The vast majority of assets taken by lenders as REO are being seized by non-CMBS lenders, who dominated this activity both in dollar volume terms (92%) and by number of properties (85%) in April. This imbalance reflects the larger share of the CRE debt market in general held by these lenders, which also backed a larger proportion of non-income-producing properties that are resistant to workouts.
Data subject to future revision; based on properties & portfolios $5 mil and greater.
©2010 Real Capital Analytics Inc.
May 17th, 2010 | News
Location: Thomasville Road at Collins Drive Tallahassee, FL
Status: Under Construction
Owner: Leon County Board of County Commissioners
Description: The 14,000 square foot renovation and addition of a 2 story masonry structure on Thomasville Road
April 5th, 2010 | NewsBeing active in the commercial real estate brokerage arena in Northwest Florida, I was thrilled to read the statistics that Tallahassee has the third lowest unemployment rate in Florida. Click here to read the full story on UrbanTallahassee.com.
Florida’s seasonally adjusted unemployment rate for February 2010 is 12.2 percent. This represents 1,126,000 jobless out of a labor force of 9,251,000. The unemployment rate is up 0.2 percentage point from the January revised rate of 12.0 percent, and up 3.0 percentage points from the February 2009 rate of 9.2 percent. February’s unemployment rate is the highest in the recorded series and higher than rates recorded in the 1973-1975 recession. Florida’s unemployment rate remained higher than the national average, which was 9.7 percent in February. Florida’s total nonagricultural employment in February 2010 is 7,173,200, representing a gain of 26,300 jobs (+0.4 percent) over the month and a job loss of 211,500 jobs, or -2.9 percent, compared to February 2009. This is the first time since November 2007 that the over the month change was positive. Florida’s rate of job decline is steeper than the national rate of decline for February which is -2.5 percent over the year.
“February’s unemployment rate underscores the critical importance of our ongoing efforts to support Florida’s families and businesses during these challenging times,” said Agency for Workforce Innovation Director Cynthia R. Lorenzo. “While the unemployment rate is a lagging indicator of economic recovery, last month’s positive job growth of 26,300 jobs and a 300 percent reduction in the number of layoff notices since the peak last May are both encouraging signs of an improving economy.”
March 22nd, 2010 | Articles, NewsKirk Halpin reiterates the “fundamentals” for investing successfully in commercial real estate. There is nothing new here – just a summary of basic principals that “matter” (or mistakes to avoid), no matter the economic climate. Unfortunately, many and even most, were overlooked during the recent run-up in prices and frenzy buying. These are worth a couple of minutes to remind yourself how to stay out of trouble with your commercial real estate investments.
1. Just Looking at the Returns
I regularly have clients that bring in several investment opportunities for review and advice, and some automatically prefer the project with the highest ROI (return on investment) without looking at any other factors. As the four ways to make good money in real estate are cash flow, appreciation, equity growth and tax benefits, one can not afford to just look at returns. In addition, investors frequently just focus on ROI. Contrary to popular belief, ROE (return on equity) provides a better measure of the speed of wealth creation and the tax efficiency in doing so.
With regard to cash flow, one can work on decreasing expenses and/or increasing revenue. On the expense side, it is good to look at the maintenance costs, the management fees, and other expenses which cannot be passed through to the tenants and discuss possible ways to reduce these expenses. On the revenue side, it is good to explore whether the lease rate can be increased, what can be done to decrease vacancy rates, whether additional leasable space can be added and whether additional revenue streams can be added from cell phone tower leases or billboard leases on the property.
—continue reading
February 25th, 2010 | Articles, NewsBeing active in the brokerage of student housing in Tallahassee, FL as well around the SE part of the country, I was fascinated by an article written by Jessica Ruderman, a senior analyst with Real Capital Analytics that appeared in Student Housing Business this past month. Jessica categorically stated, “student housing will remain a safe haven for investors. With more people returning to school during the downturn, many universities short of meeting housing needs, and state governments cutting back on construction budgets, this niche should prevail, especially as public REITs ramp up investment and smaller private players participate. In addition, the relatively small nature of the niche and low volume will together keep prices less volatile than those for the broader apartment sector.”
I couldn’t agree with Jessica more, nor do I see the distressed asset arena playing a role in the activity in the student housing market in the next 24 months. Yes, velocity is low, but by and large the student housing market is holding its own mirroring price dips in other product types. For the article in its entirety including graphs from Real Capital Analytics click here.
|
|
Be the first to comment
2 comments
