Jul
16
Crystal ball, anyone?
Posted by under For Buyers, For Sellers, For Realty Professionals, General Information, Education
Are we better off than a year ago? It’s easy to be in this predicament when clients ask you about the market. Their guess is as good as our’s… only difference is that as real estate professionals, we should be better informed about our local market so we can guide our clients and do the job needed to tread this economic roller coaster. Recently I read an article in Commercial Investment magazine from the CCIM Institute where Anthony M. Graziano does an excellent job of recapping the current economic struggle both Buyers and Sellers are facing. He says we may be no better off in 2010 than we were in 2009, except for the fact that time cures all ills. Quality deals are few and far between. Bidding on the deals is aggressive and quick, and pricing is being bid up - keeping a lot of good deals from being great.
Kermit Baker, chief economist for the American Institute of Architects said that vacancies are still increasing in many parts of the U.S. and new commercial construction will be sparse this year. “There are a number of factors at play here that are contributing to one of the steepest construction downturns in generations,” said Baker. “We have businesses nervous about expanding their facilities, a fragile financial sector, excess commercial space, and general unease in the international economy.” He predicted that demand for retail, hotels, healthcare, and recreation facilities will result in a turnaround in 2011.
While I read this in the REALTOR magazine, I met with a good friend who sits in the Federal Reserve Board and their indication is that the rate of economic decline has slowed but hasn’t hit the bottom yet so they are predicting 2012 to be the turnaround year. Many analysts believe the structural issues contributing to general economic recovery are in place. A real estate recovery generally lags an economic recovery by 18 to 24 months. Logic follows then that we can’t start crawling out ahead of the economy. The real estate sector must resolve that the nearer we travel towards real long-term economic growth the more realistic the upside real estate presents. Until appreciation expectations return, we just need to keep moving in a positive direction, says Graziano. Wish we had a cryatall ball, eh?
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I folks, I know I have been hibernating for a few months. It’s funny how we change our habbits and behavior when we get extremely busy. I fell in the same trap. We have been recently bombarded with phone calls and emails regarding foreclosure and bank owned properties. From residential to commercial, people are looking for deals and deals are to be had in this market! I mean, common, when are you going to buy if you don’t buy now? We’ve been telling people that if you were ever thinking of buying real estate and don’t buy now, you are LOOSING money! Bank owned properties are at a all time hign and historically, loans are still very very cheap. So people, get into the game and call your trested Realtor and go on a buying frenzy! If you don’t have one, call me 
. I would love to help out.
I’m back after a short break from blogging. Sale Leaseback transactions have always interested me. We are currently offering this on one property so I thought it was good time to blog on this subject. A Sale-Leaseback transaction entails the sale of corporate real estate and the simultaneous commitment to a lease. This combination allows a company to redeploy the capital that had been invested in real estate into the core business. It can also financially help struggling companies access to cash they can invest back in the business for growth and debt paydown. According to REALTOR.com’s article titled “
It’s been a while since we’ve posted on this forum. I have been very busy with clients and the hot new topic is REO, distressed, auctions, etc. In today’s market place, 9 out of 10 investors we encounter with want to buy a distressed property. While this may be the best time to do that, it is imperative that people do their due deligence and know what to look for before getting into a deal. I came across a great artice on 
A lot of people have recently asked me about a self storage business. While I am not an expert in this subject, I will try to outline a few reasons people get into this business model. Self storage investing can offer you a stable, first step in generating a higher net worth. By being a business that is typically more profitable, a self storage unit can be a great way to consistently generate income. This is possible because a self storage facility has relatively low monthly maintenance costs. Typically, there is no inventory to tie up capital, there is a minimum commitment to labor costs, and depending on the location of the property, taxes associated with the property can be next to nothing. All the money, therefore, that is created by the actual service being rendered (in this case storing goods) is then translated directly into profit.
We try to package a deal with owner financing since securing loans with conventional institutions such as banks are next to impossible in this market. Sellers, who have the capacity, realize this and can benefit from this offering since they can carry the note, and generally make a % profit on the note and have the flexibility to call or balloon the note in 3-5 years. I see this as a growing trend in a lot of deals on the market and suspect it will gain more momentum in months to come.
We represent buyers and sellers in the convenience store / gas station industry. Recently we’ve seen a boom in this market as the industry has been resilient through the current recession. This was proven when 
I recently answered a question for one of the buyers on Trulia.com. You can 
Jack in the Box Inc. today announced that it has entered into a purchase and sale agreement for 55 of its 61 Quick Stuff convenience stores and gas stations to an undisclosed buyer. The all-cash transaction is expected to be completed by the close of the company’s fiscal year ending September 27, 2009.
Many Realtors® have recently asked me why they should refer business to me if they can do the commercial sale themselves. My general response is that if they feel qualified, they should try to do the deal themselves, but if they are just starting out in this field, they could use a helping hand just so they can get their feet wet in the commercial real estate field. I think it is perfectly ok for residential agents to learn the commercial field BUT if they are not experienced, all it takes is a phone call to refer the business to a commercial agent and sit back and wait for the referral commission check. Agents need to realize the value of referrals and their effect on the agents bottom line.
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