Showing posts with label Real Estate. Show all posts
Showing posts with label Real Estate. Show all posts
Tuesday, July 3, 2012
REIT Returns Slow in Second Quarter
Real estate investment trusts, which have become the darlings of investors over the past three years for their strong returns, are beginning to lose some of their luster, the Wall Street Journal reported. Citing data from the Dow Jones All REIT Index, which tracks 133 trusts, the sector returned just 4 percent in the second quarter, down from 10.5 percent in the first quarter and 15 percent in the fourth quarter of last year.
Wednesday, April 11, 2012
Owner-Occupied Real Estate Is Growing in Appeal
In a market featuring rock-bottom building prices and record-low interest rates, now is an ideal time for businesses to consider purchasing instead of leasing their real estate.
That was the consensus of the panelists on the most recent episode of the "Commercial Real Estate Show," which provided a look at the factors making owner-occupied real estate a more attractive option for businesses.
Show host Michael Bull, the president and founder of Bull Realty, said the possibility of rent spikes is one reason to consider buying.
"These prices are so low, it's incredible," he said. "With the lack of new construction [in recent years], I think we're going to see some huge rents in about five years."
http://atlantarealestate.citybizlist.com/3/2012/4/9/CRE-Show-OwnerOccupied-Real-Estate-Is-Growing-in-Appeal.aspx
That was the consensus of the panelists on the most recent episode of the "Commercial Real Estate Show," which provided a look at the factors making owner-occupied real estate a more attractive option for businesses.
Show host Michael Bull, the president and founder of Bull Realty, said the possibility of rent spikes is one reason to consider buying.
"These prices are so low, it's incredible," he said. "With the lack of new construction [in recent years], I think we're going to see some huge rents in about five years."
http://atlantarealestate.citybizlist.com/3/2012/4/9/CRE-Show-OwnerOccupied-Real-Estate-Is-Growing-in-Appeal.aspx
Monday, March 19, 2012
Distressed Commercial Real Estate Continues Retreat
The amount of commercial real estate backed by troubled loans in the United States continues to fall from a high of $191.5 billion set in March 2010.
So-called distressed real estate, which included properties in default or foreclosure and real estate taken over by lenders, totaled $166.9 billion in January 2012, down $4.7 billion since October 2011, according to data from Real Capital Analytics.
So-called distressed real estate, which included properties in default or foreclosure and real estate taken over by lenders, totaled $166.9 billion in January 2012, down $4.7 billion since October 2011, according to data from Real Capital Analytics.
Wednesday, February 29, 2012
US Commercial Real Estate Markets Improving, Says NAR Report
US commercial property market are showing signs of improvement, with vacancy rates expected to drop over the coming year. According to the National Association of Realtor s’(NAR's) quarterly commercial real estate forecast, a strengthening across all sectors of the market is anticipated. Two-thirds of the professionals questioned stated they believe there will be an improvement during the first quarter of 2012, while rental increases are also on the cards. NAR chief economist Lawrence Yun commented: "Sustained job creation is benefiting commercial real estate sectors by increasing the demand for space. Vacancy rates are steadily falling."
A decline in the empty space available in the office, industrial, retail and multifamily housing sectors is predicted between the first three months of this year and the same period in 2013, with vacancy rates in the retail industry likely to fall the most - dropping from 11.9 per cent at present to 11 per cent in a year's time.
Annual industrial rent is expected to rise 1.8% in 2012 and 2.3% next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.
Retail vacancy rates are forecast to decline from 11.9% in the current quarter to 11% in the first quarter of 2013.
http://www.propertywire.com/news/north-america/us-commercial-real-estate-201202296227.html
A decline in the empty space available in the office, industrial, retail and multifamily housing sectors is predicted between the first three months of this year and the same period in 2013, with vacancy rates in the retail industry likely to fall the most - dropping from 11.9 per cent at present to 11 per cent in a year's time.
Annual industrial rent is expected to rise 1.8% in 2012 and 2.3% next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.
Retail vacancy rates are forecast to decline from 11.9% in the current quarter to 11% in the first quarter of 2013.
http://www.propertywire.com/news/north-america/us-commercial-real-estate-201202296227.html
Thursday, October 6, 2011
What will investors abandon next?
Reason to Pull REITs from the Wreckage
What will investors abandon next? The first bout of jitters in July hit stocks. Then gold took its licks. The latest target: companies that own government-backed mortgages.
After holding up well through the summer, many mortgage real-estate investment trusts have fallen at least 15% in the last month. Such REITs tend to perform better when investors flee risky assets because they invest exclusively in government-agency-guaranteed mortgages. But Capstead Mortgage Corp. and CYS Investments now have valuations below 90% of book value, the lowest in over a year, ...
http://online.wsj.com/article/SB10001424052970203476804576613321006588828.html
What will investors abandon next? The first bout of jitters in July hit stocks. Then gold took its licks. The latest target: companies that own government-backed mortgages.
After holding up well through the summer, many mortgage real-estate investment trusts have fallen at least 15% in the last month. Such REITs tend to perform better when investors flee risky assets because they invest exclusively in government-agency-guaranteed mortgages. But Capstead Mortgage Corp. and CYS Investments now have valuations below 90% of book value, the lowest in over a year, ...
http://online.wsj.com/article/SB10001424052970203476804576613321006588828.html
Wednesday, October 5, 2011
New York Beats London as Top Spot for Real Estate Investment
New York overtook London as the No. 1 destination for real-estate investment for the first time since 2007 after improved access to financing spurred more U.S. deals, Cushman & Wakefield Inc. said in a report today.
Investments grew 166 percent to $29.7 billion in the New York area in the 12 months through August, compared with a year earlier. Investment in greater London increased 2.4 percent to $27.2 billion, according to the report based on data compiled by the New York-based broker and Real Capital Analytics Inc. Buyers are drawn to cities like New York and London because of a greater focus on the “biggest and best,” Cushman said in the report. The trend will continue in the next six months, it said.
Outside of the U.S. real estate lending tends to be tighter and is still “very focused on prime, leased assets only,” Cushman said in the report.
http://www.bloomberg.com/news/2011-10-05/new-york-beats-london-as-top-spot-for-real-estate-investment-on-financing.html
Investments grew 166 percent to $29.7 billion in the New York area in the 12 months through August, compared with a year earlier. Investment in greater London increased 2.4 percent to $27.2 billion, according to the report based on data compiled by the New York-based broker and Real Capital Analytics Inc. Buyers are drawn to cities like New York and London because of a greater focus on the “biggest and best,” Cushman said in the report. The trend will continue in the next six months, it said.
Outside of the U.S. real estate lending tends to be tighter and is still “very focused on prime, leased assets only,” Cushman said in the report.
http://www.bloomberg.com/news/2011-10-05/new-york-beats-london-as-top-spot-for-real-estate-investment-on-financing.html
Monday, September 12, 2011
Rush to Restaurant Real Estate Brings 53% Increase
The Cheapest restaurants in America are luring activist investors who are betting companies from Ruby Tuesday Inc. (RT) to Cracker Barrel Old Country Store Inc. (CBRL) can make more money selling their own real estate than food.
The 10 biggest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar, according to data compiled by Bloomberg. With the restaurants slumping twice as much as the Standard & Poor’s 500 Index this year, firms from Biglari Holdings Inc. (BH) to Carlson Capital LP and Becker Drapkin Management LP are agitating for board seats at eateries with fixed assets that are worth an average of 53 percent more than the companies themselves. Ruby Tuesday has $1 billion of such assets, twice its market value.
The economy expanded 0.7 percent in the first half of this year, the weakest stretch since the recovery began in June 2009. As job growth stalled last month, a RBC Capital Markets survey showed one-third of Americans now plan to spend less dining out in the next 90 days, the largest proportion in almost a year.
The 10 biggest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar, according to data compiled by Bloomberg. With the restaurants slumping twice as much as the Standard & Poor’s 500 Index this year, firms from Biglari Holdings Inc. (BH) to Carlson Capital LP and Becker Drapkin Management LP are agitating for board seats at eateries with fixed assets that are worth an average of 53 percent more than the companies themselves. Ruby Tuesday has $1 billion of such assets, twice its market value.
The economy expanded 0.7 percent in the first half of this year, the weakest stretch since the recovery began in June 2009. As job growth stalled last month, a RBC Capital Markets survey showed one-third of Americans now plan to spend less dining out in the next 90 days, the largest proportion in almost a year.
Thursday, August 11, 2011
Investors willing to Step Into Distressed Situations
Investors willing to step into distressed situations with fresh capital are seeing a surge in business now that lenders are showing a greater willingness to rework deals.
Take the case of Mesa West Capital. The Los Angeles-based private lender this year has originated about $600 million in loans, already topping its previous record year in 2007, when its volume hit $498 million. The firm is on pace to hit $1 billion by the end of December, according to Jeff Friedman, the company's co-founder and co-chief executive.
Part of the new business comes from rising sales volume in the commercial-real-estate market.
http://online.wsj.com
Take the case of Mesa West Capital. The Los Angeles-based private lender this year has originated about $600 million in loans, already topping its previous record year in 2007, when its volume hit $498 million. The firm is on pace to hit $1 billion by the end of December, according to Jeff Friedman, the company's co-founder and co-chief executive.
Part of the new business comes from rising sales volume in the commercial-real-estate market.
http://online.wsj.com
Wednesday, February 9, 2011
Wall Street Boosts Borrowers as Real Estate Bond Market Returns
Randy Waesche was running out of time to retire debt he took on to build a Marriott hotel in downtown New Orleans. Then Citigroup Inc. showed up.
Waesche had spent six months seeking a more affordable alternative to terms being offered by his lender, a unit of Capmark Financial Group Inc. Citigroup was able to offer a better rate as the market for bonds tied to commercial mortgages revives following its 2008 collapse. The loan was completed in November, and was part of an $876 million securitized debt sale by Citigroup and Goldman Sachs Group Inc. in December.
www.bloomberg.com
Waesche had spent six months seeking a more affordable alternative to terms being offered by his lender, a unit of Capmark Financial Group Inc. Citigroup was able to offer a better rate as the market for bonds tied to commercial mortgages revives following its 2008 collapse. The loan was completed in November, and was part of an $876 million securitized debt sale by Citigroup and Goldman Sachs Group Inc. in December.
www.bloomberg.com
Wednesday, February 2, 2011
The Wawa Net Lease Market
As a relative newcomer to the net lease market, Wawa convenient store gas stations are one of the hottest sought after triple net lease investment properties in the net lease market today. With an implied credit rating of BBB- / outlook Stable, most investors understand the credit-worthiness of
this privately owned company, which is considered one of the strongest convenient store operators in the country. In 2009, Wawa was ranked No. 55 in Forbes’ America’s Largest Private Companies list. Wawa currently operates more than 570 convenient stores throughout the mid-Atlantic, 270+ of which include gasMost Wawa net leases properties offer an investor long-term security and absolutely no management responsibilities in the form of a 20-year primary term nnn ground lease. These ground leases provide additional investment security given the nature of the real estate investment made by Wawa’s real estate team, including the Wawa Engineering and Construction Department which is responsible for the design, engineering and construction of all new stores and remodels. As with any ground lease investment, a landlord should be comforted by the fact that the tenant, in this case Wawa, has made a significant capital investment in the construction of the building, which at the end of the lease will become property of the ground lease owner.
Also driving the demand and value of Wawa net lease properties is the strong real estate fundamentals of the property sites. Wawa’s real estate team has specific site select criteria, which focus on key trade area location characteristics. Wawa net lease properties are typically located at signalized corners and out-parcel/pads of shopping centers with good visibility and ingress/egress. Ideal trade area characteristics include adequate population and minimum traffic counts of at least 25,000 vehicles per day. Sites should be located on high-volume intersections near other commercial traffic generators.
Wawa's namesake is a Native American word for the Canada Goose in flight, which is also incorporated into the company's logo. Wawa owns and operates convenience stores and gasoline stations in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. These stores offer a fresh food selection under the Wawa brand including deli products, wraps, breakfast sandwiches, bakery products, fresh produce, and dairy products. The first Wawa store opened in April 1964 in Folsom, Pennsylvania.
Tuesday, February 1, 2011
Triple-Net-Lease Properties Returns are More Favorable
Triple-net-lease properties' returns are more favorable and more secure than some traditional investment vehicles
By: David Sobelman, Executive Vice President, Calkain Cos.
As published in Scotsman Guide's Commercial Edition.
Despite the economic downturn and the fact that many aspects of the commercial real estate industry still need time to season before true recovery takes place, some niche segments of the market are actually performing extremely well. In fact, some are at the same level they reached at the height of the market.
Triple-net-lease investment properties, in particular, may be a true bright spot on the commercial investment horizon. Here's why.
Triple net lease properties are probably some of the most commonly noticed commercial real estate in the market. Most of the assets are drugstores, bank branches, restaurants, home-improvement centers and the like. These are core assets that have daily users and requirements. Typically, they are single-tenant buildings where, through the lease structure, the tenant is responsible for the taxes, insurance, and maintenance and management of the building - the three "nets."
Investors have a strong appetite for passive income in today's market, as there are few alternatives for them to receive a return that is equal to or better than what net lease assets provide. Additionally, it seems that lenders are becoming more comfortable with the asset type - many transactions in today's market are using some sort of lender-provided leverage.
Mortgage brokers are an integral part of the lending process for net lease investments, especially because one lender won't provide the best rate and terms for a particular investor every time. Brokers who want to increase their business in this asset class should understand what goes into funding triple net lease properties and be aware of the market's emerging trends.
Underwriting the tenant
Like in any underwriting process, lenders consider the real estate's value first. With net lease investments, however, the current tenant's credit also is weighed heavily.
Because tenants occupying single-tenant buildings typically sign long leases - sometimes for as many as 25 years or more - lenders want to know who is actually paying the rent to support the property for that long. Therefore, the underwriting of the tenant's credit becomes a key factor for lenders considering net leased assets.
There is some standardization for rating tenants, which comes primarily from credit-rating agencies such as Standard & Poor's (S&P), Moody's Investor Service, Fitch Ratings, etc. These agencies each have their own alphanumeric system to report how a particular company is performing from a credit perspective. S&P, for instance, has ratings that begin at AAA as the best-possible credit and incrementally go down to D.
In today's lending environment, net lease tenants with an S&P credit rating of BBB or greater have a better chance of getting a lender's attention because they are seen to be less risky. Tenants with credit ratings less than BBB are perceived to be more likely to default over the term of the lease.
In fact, a Moody's study quantified this phenomenon, stating that companies with a BBB- credit rating have a 4-percent chance of defaulting on their lease within any five-year period. Conversely, a company that has rating of B- has a 43-percent chance of defaulting on its lease within the same period. As a matter of comparison, companies with AAA ratings have a 0.15-percent chance of defaulting. It is pretty clear why lenders focus their underwriting on the potential tenant's credit.
Funding net leases
Although mortgage brokers unfamiliar with this asset class may think this type of debt comes from sophisticated sources housed in a class-A skyscraper on Wall Street, the vast majority of loans for net lease investments come from banks.
Real Capital Analytics, a market-research company, recently reported that 51 percent of single-tenant acquisition transactions completed to-date in 2010 came from a traditional bank. It also reported, however, that 40 percent came from a national bank and 11 percent was from a regional or local bank.
It seems that when a recession hits, the lending environment changes to a point that sophisticated financing instruments are no longer needed to drive the market. Instead, individual relationships between borrowers, lenders and their conduits (i.e., mortgage brokers) are the primary source of transaction volume.
In addition, Real Capital Analytics reported that 30 percent of the transactions completed this past year used existing financing that was assumed by a new buyer. Anecdotally, investors active in the market at the beginning of this year did not have as many sources of capital. Those who made purchases that required financing were given financing quotes that were outrageous and did not allow the transaction to make sense to the investor. Therefore, they assumed the debt from the previous owner because the terms and interest rates were more favorable than the market at that time. Sourcing debt for net lease investments is becoming easier, however.
Gaining market share
Single-tenant properties have become so popular this past year that they comprised roughly 35 percent of all commercial real estate transactions completed in the first two quarters of the year, according to data from Real Capital Analytics. By comparison, when the market was at its peak in 2007, only 20 percent of all transactions included the asset class.
With more than $425 billion in total commercial sales in 2007 - which included $85 billion in single-tenant sales - compared to $35 billion in total sales for these past first two quarters - which included $12.25 billion in single-tenant sales - it is apparent that with fewer transactions, more people are steering toward stabilized and lower-risk properties.
Capitalization rates - or cap rates - are a quick snapshot of an investor's return. In today's market, cap rates are roughly 6 percent to 8 percent for creditworthy properties. When a basic comparison is made using other passive investments, it is fairly clear why investors are seeking to put their capital to work in the property type.
Most investors who have cash available to make passive, nonspeculative investments are using basic money-market or savings accounts to hold the cash. When returns for those investment vehicles hover around 1 percent, the investor is motivated to find alternative investments for that capital while also maintaining a steady and safe cash flow over a period of time. Net lease properties are filling that void.
Tracking trends
There are different periods where lenders will have a strong appetite for a particular tenant and less so for other tenants, and this changes over time. Brokers who stay on top of these kinds of trends in their markets and leverage their relationships with lenders can help clients find the best rates and terms at any particular moment.
As an example, Walgreen Co. drugstores - a common triple net lease tenant - have an S&P credit rating of A+. As such, lenders are comfortable with these stores' credit and viability as a longstanding tenant. At the beginning of this year, however, there were more than 450 Walgreens stores available for purchase as net lease investments.
Because most investors need financing to purchase a single store and the average sale price for a Walgreens store is about $5 million, mortgage brokers were engaged to find the best debt. Lenders, however, found that they had too many Walgreens loans on their balance sheets and started to slow down the distribution of debt for that tenant. Brokers show their value in these scenarios by finding other lending sources that aren't as saturated with one particular tenant.
Supply and demand dictates the rate and terms of a particular tenanted-occupied building. Because of their popularity, Walgreens investments typically garner a higher interest rate. Other companies that have S&P credit ratings of A+ and similar lease terms, but higher price tags and therefore fewer buyers may have substantially lower interest rates.
Lenders, therefore, dictate rates and terms based not only on the tenant's credit, but also on subjective factors that move markets in different directions at different times. Mortgage brokers should be cognizant of these trends and have their arsenal of lending sources available for their clients as market indicators change.
Net lease properties have proven to be a strong asset class in this recovery -driven market. Lenders are seeking assets for their portfolios to maintain strong balance sheets. It's always better to have a stabilized net lease investment earning income for the lender and the investor on the books as opposed to vacant, speculative land that likely has an undetermined value for future development.
Mortgage brokers who focus on this asset class can take advantage of the new demand for these properties, as they are some of the only properties getting funded with rates and terms last seen at the height of the market.
www.calkain.com
By: David Sobelman, Executive Vice President, Calkain Cos.
As published in Scotsman Guide's Commercial Edition.
Despite the economic downturn and the fact that many aspects of the commercial real estate industry still need time to season before true recovery takes place, some niche segments of the market are actually performing extremely well. In fact, some are at the same level they reached at the height of the market.
Triple-net-lease investment properties, in particular, may be a true bright spot on the commercial investment horizon. Here's why.
Triple net lease properties are probably some of the most commonly noticed commercial real estate in the market. Most of the assets are drugstores, bank branches, restaurants, home-improvement centers and the like. These are core assets that have daily users and requirements. Typically, they are single-tenant buildings where, through the lease structure, the tenant is responsible for the taxes, insurance, and maintenance and management of the building - the three "nets."
Investors have a strong appetite for passive income in today's market, as there are few alternatives for them to receive a return that is equal to or better than what net lease assets provide. Additionally, it seems that lenders are becoming more comfortable with the asset type - many transactions in today's market are using some sort of lender-provided leverage.
Mortgage brokers are an integral part of the lending process for net lease investments, especially because one lender won't provide the best rate and terms for a particular investor every time. Brokers who want to increase their business in this asset class should understand what goes into funding triple net lease properties and be aware of the market's emerging trends.
Underwriting the tenant
Like in any underwriting process, lenders consider the real estate's value first. With net lease investments, however, the current tenant's credit also is weighed heavily.
Because tenants occupying single-tenant buildings typically sign long leases - sometimes for as many as 25 years or more - lenders want to know who is actually paying the rent to support the property for that long. Therefore, the underwriting of the tenant's credit becomes a key factor for lenders considering net leased assets.
There is some standardization for rating tenants, which comes primarily from credit-rating agencies such as Standard & Poor's (S&P), Moody's Investor Service, Fitch Ratings, etc. These agencies each have their own alphanumeric system to report how a particular company is performing from a credit perspective. S&P, for instance, has ratings that begin at AAA as the best-possible credit and incrementally go down to D.
In today's lending environment, net lease tenants with an S&P credit rating of BBB or greater have a better chance of getting a lender's attention because they are seen to be less risky. Tenants with credit ratings less than BBB are perceived to be more likely to default over the term of the lease.
In fact, a Moody's study quantified this phenomenon, stating that companies with a BBB- credit rating have a 4-percent chance of defaulting on their lease within any five-year period. Conversely, a company that has rating of B- has a 43-percent chance of defaulting on its lease within the same period. As a matter of comparison, companies with AAA ratings have a 0.15-percent chance of defaulting. It is pretty clear why lenders focus their underwriting on the potential tenant's credit.
Funding net leases
Although mortgage brokers unfamiliar with this asset class may think this type of debt comes from sophisticated sources housed in a class-A skyscraper on Wall Street, the vast majority of loans for net lease investments come from banks.
Real Capital Analytics, a market-research company, recently reported that 51 percent of single-tenant acquisition transactions completed to-date in 2010 came from a traditional bank. It also reported, however, that 40 percent came from a national bank and 11 percent was from a regional or local bank.
It seems that when a recession hits, the lending environment changes to a point that sophisticated financing instruments are no longer needed to drive the market. Instead, individual relationships between borrowers, lenders and their conduits (i.e., mortgage brokers) are the primary source of transaction volume.
In addition, Real Capital Analytics reported that 30 percent of the transactions completed this past year used existing financing that was assumed by a new buyer. Anecdotally, investors active in the market at the beginning of this year did not have as many sources of capital. Those who made purchases that required financing were given financing quotes that were outrageous and did not allow the transaction to make sense to the investor. Therefore, they assumed the debt from the previous owner because the terms and interest rates were more favorable than the market at that time. Sourcing debt for net lease investments is becoming easier, however.
Gaining market share
Single-tenant properties have become so popular this past year that they comprised roughly 35 percent of all commercial real estate transactions completed in the first two quarters of the year, according to data from Real Capital Analytics. By comparison, when the market was at its peak in 2007, only 20 percent of all transactions included the asset class.
With more than $425 billion in total commercial sales in 2007 - which included $85 billion in single-tenant sales - compared to $35 billion in total sales for these past first two quarters - which included $12.25 billion in single-tenant sales - it is apparent that with fewer transactions, more people are steering toward stabilized and lower-risk properties.
Capitalization rates - or cap rates - are a quick snapshot of an investor's return. In today's market, cap rates are roughly 6 percent to 8 percent for creditworthy properties. When a basic comparison is made using other passive investments, it is fairly clear why investors are seeking to put their capital to work in the property type.
Most investors who have cash available to make passive, nonspeculative investments are using basic money-market or savings accounts to hold the cash. When returns for those investment vehicles hover around 1 percent, the investor is motivated to find alternative investments for that capital while also maintaining a steady and safe cash flow over a period of time. Net lease properties are filling that void.
Tracking trends
There are different periods where lenders will have a strong appetite for a particular tenant and less so for other tenants, and this changes over time. Brokers who stay on top of these kinds of trends in their markets and leverage their relationships with lenders can help clients find the best rates and terms at any particular moment.
As an example, Walgreen Co. drugstores - a common triple net lease tenant - have an S&P credit rating of A+. As such, lenders are comfortable with these stores' credit and viability as a longstanding tenant. At the beginning of this year, however, there were more than 450 Walgreens stores available for purchase as net lease investments.
Because most investors need financing to purchase a single store and the average sale price for a Walgreens store is about $5 million, mortgage brokers were engaged to find the best debt. Lenders, however, found that they had too many Walgreens loans on their balance sheets and started to slow down the distribution of debt for that tenant. Brokers show their value in these scenarios by finding other lending sources that aren't as saturated with one particular tenant.
Supply and demand dictates the rate and terms of a particular tenanted-occupied building. Because of their popularity, Walgreens investments typically garner a higher interest rate. Other companies that have S&P credit ratings of A+ and similar lease terms, but higher price tags and therefore fewer buyers may have substantially lower interest rates.
Lenders, therefore, dictate rates and terms based not only on the tenant's credit, but also on subjective factors that move markets in different directions at different times. Mortgage brokers should be cognizant of these trends and have their arsenal of lending sources available for their clients as market indicators change.
Net lease properties have proven to be a strong asset class in this recovery -driven market. Lenders are seeking assets for their portfolios to maintain strong balance sheets. It's always better to have a stabilized net lease investment earning income for the lender and the investor on the books as opposed to vacant, speculative land that likely has an undetermined value for future development.
Mortgage brokers who focus on this asset class can take advantage of the new demand for these properties, as they are some of the only properties getting funded with rates and terms last seen at the height of the market.
www.calkain.com
Wednesday, January 26, 2011
China Lead in Real Estate Market Worldwide
Net Lease Market News
http://www.crunchyroll.com/pulse/refusing-to-leave-40538
China had $197.1 billion of transactions in real estate market last year, 23 percent more than in 2009, the New York based company said in a statement today. That represented 34 percent of the $582 billion of deals worldwide, down from 41 percent the previous year as Chinese authorities sought to prevent the property market from overheating.
About 95 percent of investments in Chinese real estate market in 2010 were land deals for development projects, according to the statement. The largest was the purchase of a site in Nanjing for $1.78 billion.
The U.S. commercial real estate market has taken longer to recover from the financial crisis than Asia and Europe. The $55.3 billion of U.S. deals made in the last three months of 2010 made it the strongest quarter since 2007.
Among the biggest U.S. transactions was the $1.36 billion purchase of 111 Eighth Ave. in Manhattan by Google Inc. in December and Boston Properties Inc.’s $684 million acquisition of Boston’s John Hancock Tower, according to RCA.
With just over 1.3 billion people (1,330,044,605 as of mid-2008), China is the world's most populous country.
As the world's population is approximately 6.7 billion, China represents a full 20% of the world's population so one in every five people on the planet is a resident of China.
By the late 2010s, China's population is expected to reach 1.4 billion. Around 2030, China's population is anticipated to peak and then slowly start dropping.
China had $197.1 billion of transactions in real estate market last year, 23 percent more than in 2009, the New York based company said in a statement today. That represented 34 percent of the $582 billion of deals worldwide, down from 41 percent the previous year as Chinese authorities sought to prevent the property market from overheating.
About 95 percent of investments in Chinese real estate market in 2010 were land deals for development projects, according to the statement. The largest was the purchase of a site in Nanjing for $1.78 billion.
The U.S. commercial real estate market has taken longer to recover from the financial crisis than Asia and Europe. The $55.3 billion of U.S. deals made in the last three months of 2010 made it the strongest quarter since 2007.
Among the biggest U.S. transactions was the $1.36 billion purchase of 111 Eighth Ave. in Manhattan by Google Inc. in December and Boston Properties Inc.’s $684 million acquisition of Boston’s John Hancock Tower, according to RCA.
With just over 1.3 billion people (1,330,044,605 as of mid-2008), China is the world's most populous country.
As the world's population is approximately 6.7 billion, China represents a full 20% of the world's population so one in every five people on the planet is a resident of China.
By the late 2010s, China's population is expected to reach 1.4 billion. Around 2030, China's population is anticipated to peak and then slowly start dropping.
Friday, January 21, 2011
Brooklyn Showed Some Improvement in 2010
Commercial property sales in Brooklyn showed little improvement in 2010 even as the volume of sales surged in Manhattan.
There were 778 commercial real-estate transactions in Brooklyn in 2010, down from 805 in 2009, according to a new report by commercial-brokerage firm Terra CRG LLC.
TerraCRG: Commercial Real Estate Stabilizing
Terra CRG just released its 2010 report on the state of the commercial real estate market in Brooklyn. According to the report, the billion dollars or so in sales is about in line with 2009 number. While you can check out data on retail and multi-family sales here, we were particularly interested in the levels at which developable property was changing hands. Despite cries of oversupply and a handful of high-profile projects going belly up, developers apparently have not lost their appetite for North Brooklyn. Williamsburg had the highest number of sales (8) and the highest dollar volume ($20,597,593). As the chart above shows, Williamsburg and Greenpoint also put up the highest numbers on a price-per-buildable-square-foot basis. Interesting.
There were 778 commercial real-estate transactions in Brooklyn in 2010, down from 805 in 2009, according to a new report by commercial-brokerage firm Terra CRG LLC.
TerraCRG: Commercial Real Estate Stabilizing
Terra CRG just released its 2010 report on the state of the commercial real estate market in Brooklyn. According to the report, the billion dollars or so in sales is about in line with 2009 number. While you can check out data on retail and multi-family sales here, we were particularly interested in the levels at which developable property was changing hands. Despite cries of oversupply and a handful of high-profile projects going belly up, developers apparently have not lost their appetite for North Brooklyn. Williamsburg had the highest number of sales (8) and the highest dollar volume ($20,597,593). As the chart above shows, Williamsburg and Greenpoint also put up the highest numbers on a price-per-buildable-square-foot basis. Interesting.
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