Posts tagged Commercial Real Estate
Sam Zell, appearing on CNBC’s Squawk Box earlier this month, reiterated several interesting points about current market conditions and trends in the commercial real estate sector:
- We haven’t built anything in the U.S. since mid-2007, and except for some apartments we are not going to build anything significant for another two to three years.
- Existing space is being filled at rates 20-30% lower than 2007.
- Commercial real estate is not the next shoe to drop – you don’t have destruction without oversupply and we don’t have oversupply.
- There is a direct correlation between filling of buildings and the end of pretend and extend – until now banks have been able More >
In 2011 banks and special servicers continue to see growth in the number of foreclosed commercial properties. This despite a dramatic shift of money center banks to sell notes on distressed debt as opposed to directly foreclosing and dealing with the legal mess, the cost and the time requirements to take possession of defaulted real estate. In 2010, one of our special servicer clients sold about $ 3 billion in commercial property in the U.S. Problem was $9 billion of new REO came in the door during the same time period. All these assets came from banks. How can those responsible to sell these assets accelerate the rate at which property can be sold at the best price?
One idea is for banks and others to invest in “Pre-Diligence,” a term coined by the NAI Global Special Asset Solutions team. Today More >
Trophies vs. Trash – it’s just one way to explain what is happening in today’s commercial real estate market. The Trophies are those main-and-main, big city stabilized assets that are the envy of every serious institutional owner. And because the number of those assets is finite and the capital chasing them seemingly endless, prices–believe it or not–are going up and cap rats are being compressed.
The sales of those few Trophy assets are also the ones that major publications report on when they declare that the worst is over. The recent sale of the Pritzker/Hyatt Office Building in downtown Chicago is an example of a trophy selling to California-based The More >
New NAI Global Reports Compare Commercial Property Prices, Trends & Business Practices in International Markets
NAI Global, the world’s premier network of commercial real estate firms and one of the largest real estate service providers worldwide, today announced the release of two new reports for corporate decision makers and investors that highlight global commercial real estate trends and provide insight into transaction and occupancy practices around the world.
NAI Global’s 2011 Global Property Prices & Trends report provides key demographic highlights along with current rental rates and investment yields for 140 global markets. The report provides prime net rental rates, investment yields and rental rate comparisons by property type for Office, Retail and Industrial properties.
The 2011 NAI Global International Property Guide provides insight into key local business customs and practices for 60 countries More >
Commercial real estate increasingly is becoming global in terms of the property owners/investors and capital players, yet in many ways it remains a local business. Local supply and demand takes precedence over regional demand and local practices still dominate markets. Therefore, it is important to have local representation when participating in a real estate transaction.
Can’t a broker I trust from another market handle things for me?
You would probably not trust your foreign car to a local gas station because the standards and practices needed to complete the work require a special set of tools, unique understanding of the automotive asset and specialized training. Similarly, local agents understand the dynamics of the local market in a way that outside agents do not appreciate. Local agents typically have grown up in the market; they have made their career in the local market. They may have gone to high school with the mayor and/or the local planning and zoning leadership. As a result they have an in-depth understanding of the properties that are on the market, the reasons they have not sold, the concessions that made to complete other local transactions, concessions that other owners may accept and the properties that may become available under the right conditions.
Why then would you utilize less than a local expert for any local real estate transaction?