Commercial real estate loan prices up in 2012, study says

Image courtesy of Thinkstock.

 

Prices for CRE loan sold through DebtX grew strongly in 2012, but closed the year flat. 

Prices for commercial real estate loans (CRE) sold through DebtX grew in 2012, but closed the year flat, according to the Boston-based marketplace for loans.

Last year, prices for impaired performing loans rose 9.1 percentage points and prices for non-=performing loans rose 11.5 percentage points, making 2012 a very strong year in the CRE secondary loan market, DebtX said.

For December, DebtX Data reported the estimated price of whole loans securing the commercial mortgage-backed securities (CMBS) universe fell to 89 percent, off from 89.4 percent on November 30. Loan values closed the year at 86.1 percent, the survey said.

The weighted average monthly price of impaired performing loans sold through DebtX’s marketplace remained unchanged at 80.5 percent in December. Prices were 71.3 percent in December 2011.

Among non-performing loan prices, the weighted average monthly price was 52.6 percent in December, up from 52.2 percent in November 2012. Prices were 41.1 percent in December 2011.

The company’s Loan Liquidity Index, a monthly barometer of liquidity for pools of loans sold at DebtX, was 108.2 in December, down from 108.4 in November. The Index was 94.9 in December 2011.

For the original post visit: http://www.bizjournals.com/boston/real_estate/2013/02/commercial-real-estate-loan-prices-up.html

Naples real estate experts: housing market on the rise

The Naples area overall median closed price increased 17 percent from $175,000 in 2011 to $204,000 in 2012.

That's the remarkable percentage real estate experts kept coming back to today at the Naples Area Board of Realtors media conference.

The numbers reflect home listings and sales in Collier County excluding Marco Island.

"I think 2012 will end up being one of the pivotal years that got us going in the right direction," said Mike Hughes.

Overall closed sales increased 9 percent from 8,345 units in 2011 to 9,121 in 2012.

Overall closed sales increased 22 percent from 1,689 units in fourth quarter 2011 to 2,061 units in fourth quarter 2012.

Hughes said that increase when not as many people are here gives the area momentum going into season when Naples is packed.

Overall pending sales rose 6 percent from 10,070 in 2011 to 10,683 in 2012.

Kathy Zorn said there might be occasional clouds and rain but her prediction for 2013 is "strong and sunny."

Overall inventory decreased 13 percent from 7,581 listed properties in 2011 to 6,557 listed properties in 2012.

Brenda Fioretti said having 6,557 properties for sale on the market is the lowest since tracking started six years ago.

Wes Kunkle, the board's president, said commercial real estate is following the positive trends of the Naples housing market.

For the original post visit: http://www.news-press.com/article/20130118/RE/130118006/Naples-real-estate-experts-housing-market-rise

Real estate prices climb in Tel Aviv region since 2000, but lag elsewhere

Real estate prices in Tel Aviv increased 71% between 2000 and 2011.

Real estate prices in Tel Aviv increased 71% between 2000 and 2011 after adjusting for inflation, while rises elsewhere were much lower - and there were even some decreases.

According to a report by the IDC Herzliya's Gazit Globe Real Estate Institute, a main reason was a lack of new homes planned for the Tel Aviv region relative to the population.

The report's findings will be presented tomorrow at an IDC conference called "How to burst the real estate bubble." The report was put together by Prof. Zvi Eckstein, dean of the IDC School of Economics; Dr. Efrat Tolkowsky, head of the Gazit Globe institute; and research assistant Nitzan Tzur.

"[Residential] planning is very thin in the center of the country in percentage terms compared to the outskirts, and this pushes prices up in the center," says Tolkowsky. "So when you want to talk about solving high housing prices, you mainly need to address the price increases in the center of the country - unless Israel wants high prices in the center as a way to push people into the periphery."

While there's little residential planning in the center, there's plenty of planned commercial and office space, say the researchers. The latter properties pay municipal tax rates five times the residential rate.

The price of a square meter of commercial real estate didn't change between 2000 and 2011. But commercial real estate now sells for 50% the price of residential real estate in the center. The shift stems from the surplus of commercial real estate, which the local authorities authorize via their role as planning authorities.

The researchers propose several ways to address the problem. These include massive residential construction in the center by forcing local authorities to approve existing plans, and changing the incentives inherent in municipal tax rates.

But Tolkowsky isn't sure the answer is to try to create new viable urban centers.

"The concentration of populations within mega-urban centers is a global phenomenon. In England, too, people are disturbed by the migration from the north and the excessive demand in London. Something about the way the global economy is structured is pulling in this direction, and the question is whether we want to fight this phenomenon, and if so, what alternative we're offering," says Tolkowsky.

"Over the last decade transportation has improved - the north and the south have gotten closer to the center and theoretically are supposed to have become better residential alternatives. I'm skeptical about the option of creating several attractive cities within Israel."

For the original post visit: http://www.haaretz.com/business/real-estate/real-estate-prices-climb-in-tel-aviv-region-since-2000-but-lag-elsewhere.premium-1.485268

Real Estate deal includes Taunton industrial Park

TAUNTON - A commercial real estate company has brokered a $90 million deal with a private investment/consulting firm that includes two warehouses at Taunton’s Myles Standish Industrial Park.

Cushman & Wakefield, which represented the seller — Boston-based Exeter Realty Capital Partners — said in a release that the deal also involved another six “distribution and flex buildings” within Franklin’s Forge Park.

The properties collectively are referred to as The Suburban Boston Industrial Portfolio, according to Cushman Wakefield.

Flex facilities are considered semi-permanent, in that they can be re-designed for a variety of uses, including distribution, storage or manufacturing.

Taunton’s Myles Standish Industrial Park has long been recognized as a premier industrial park in Massachusetts.

It is managed and supervised by the non-profit Taunton Development Corporation (TDC) in cooperation with MassDevelopment, a project development and lending company that works with both public and private sector entities.

TDC president Louis Ricciardi said Thursday that he was not yet familiar with the deal and therefore could not identify the two high-bay facilities mentioned in the press release.

Ricciardi said it’s common practice for the TDC to initially sell land that is later leased, purchased and traded among various investors.

At a certain point, he said, “it’s beyond our involvement.”

The MSIP this past year grew by another 200 acres when it acquired land previously considered part of the former Paul A. Dever State School.

Ricciardi said the $90 million deal shows the Taunton area “remains at the top of the list for investment” in terms of industrial development.

With the addition of phases IV and V, Ricciardi said the park now has more than 1,000 acres of land at its disposal.

Ricciardi said road construction is still underway within the park’s latest land addition and that no company has yet to establish itself on a parcel.

But he also said there is growing interest in the property.

A message left with a spokesman for Cushman Wakefield was not returned.

Source: http://www.tauntongazette.com/newsnow/x346790121/Real-Estate-deal-includes-Taunton-industrial-Park

Landmark Dividend Launches Commercial Real Estate Division and Offers Solutions to Property Valuation Issues

Landmark Dividend launches Commercial Real Estate Division and is pleased to offer custom-tailored solutions to its commercial real estate clients; enabling them to receive full value for their cellular tower or billboard asset and ensuring the sale or refinance of their property proceeds without complication.

El Segundo, CA (PRWEB) July 25, 2012

The increasing number of issues surrounding the sale of property with billboard or cellular tower leases has prompted Landmark Dividend to launch a Commercial Real Estate Division to serve the needs of commercial property owners and realtors who are experiencing difficulties with lenders and the valuation of their property.

Commercial realtor, Ian Martin Grusd encountered issues when his client was seeking to sell an investment property with multiple cell towers. “The banks were unwilling to loan any money against the value of the towers, which was affecting my ability to get the price my client desired for the property. We couldn’t walk away from the value of the leases, so we were backed into a corner.” That’s when Grusd discovered Landmark Dividend, the national industry leader in cellular and billboard ground leases.

Grusd was able get an immediate top dollar offer for the cellular ground leases that was customized to meet his client’s unique needs. Said Grusd, “Landmark’s professionals worked with us to get the agreement we needed at a price that my client was very pleased with. Their process was transparent; their paperwork was simple and didn’t require legal expertise to understand. Best of all, we closed very quickly.”

“Understanding the needs of the property owner and structuring a deal to meet those needs has enabled Landmark to become the partner of choice for organizations and individuals seeking to capitalize billboard and cellular ground leases. Our experience in this industry, access to capital, focus on innovation and superior service enables us to provide exceptional value for our clients,” states Jeffrey Knyal, CEO of Landmark Dividend.

Founded by Jeffrey Knyal and Arthur P. (Tim) Brazy, Jr., Landmark Dividend is comprised of a group of wireless-industry veterans with more than 100 years of combined experience. The company specializes in providing financial solutions to cellular and billboard leaseholders. To learn more about the services Landmark Dividend offers its clients, please visit http://www.LandmarkDividend.com or call (800) 832-0731.

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/7/prweb9734680.htm

State commercial real estate surges

Connecticut's commercial real estate conditions are on the upswing, according to a survey released Tuesday.

The Farmington Bank/ODMD Commercial Real Estate Index, released quarterly, doubled in the most recent survey compared with levels of a year ago. The second-quarter survey showed confidence in the state's commercial real estate market at the highest level since data were first tracked in 2010.

"The fact that the 'future expectations' component is now outpacing readings on the current commercial real estate picture is seen as a bullish sign for the local market," said Peter Gioia, vice president of the Connecticut Business and Industry Association.

The "current conditions" component of the survey was recorded as 19.7 in the second quarter, up from 17.8 in the first quarter. Meanwhile, "future expectations" drew a reading of 24.3, up from 21.6 in the first part of the year.

Only 12 percent of survey respondents said Connecticut's economy could be rated "good" or "excellent" today.

Twenty percent, though, thought the economy would be hitting its stride in the third quarter.

The report pointed out that a decline in consumer spending so far in 2012 could put the damper on retail sales going forward. Only 19 percent of people polled found the current retail climate in Connecticut "good" or "excellent."

Meanwhile, a sluggish demand for labor statewide has resulted in hiring stagnation, according to the report.

"Employers seem to be adopting a 'wait and see' approach to permanent future hires given the heightened level of overall economic uncertainty," the report said. Only 7 percent of poll respondents characterized economic conditions overall as being rosy.

While exports have helped prop up the state's economy recently, the report warned that economic problems resulting from Europe's fiscal crisis could affect businesses going forward.

The survey was based on 86 respondents, including real estate professionals and economic-development experts from around the state.

Four key areas were considered: office, industrial, retail and investment real estate.

"Levels of consumer confidence and business confidence, as well as job growth, will be instrumental in determining the path of overall economic activity as we move through the balance of 2012," said Bruce Blasnik, a partner in the accounting firm O'Connor Davies Munns & Dobbins of Stamford, in a statement.

Source: http://www.theday.com/article/20120627/BIZ04/306279971/1044

Seacoast real estate still hot

PORTSMOUTH — The commercial real estate sector on the New Hampshire Seacoast continues to be one the hottest in the state and in northern New England.

According to a recent market survey report by CBRE/New England, Portsmouth continues to be a strongly sought location. In the past few months, the national grocery retailer Trader Joe's announced it will open a new store in Newington, SIG Sauer is relocating its headquarters and manufacturing to Pease International Tradeport, and Kittery Trading Post just signed a major warehousing lease in Dover.

"There is more velocity in the market and more people in the market," said Margaret O'Brien, a vice president with CBRE in Portsmouth. "More people are bullish on the economy."

O'Brien represented the landlord in the Kittery Trading Post lease. Kittery Trading Post is moving out of the former Celestica facility at Pease (where SIG Sauer is moving in) and locating its warehousing operation at the former Textron facility (250,000 square feet) at Industrial Park Drive in Dover.

"More companies are expanding or relocating, and we are seeing an uptick in activity. They aren't sitting on the sidelines," O'Brien said.

"We're seeing the best activity we've seen in years," said Michael Kane of the Kane Company, which helped broker the SIG Sauer deal. "I think that deal (SIG Sauer) spoke volumes about the strength of the economy. People are clearly hiring; we are seeing (it) all across the real estate market, though it's less so in the retail sector."

The CBRE report had the Seacoast region/Interstate 95 corridor with an office vacancy rate in 2011 at 15.4 percent, down from 18.3 percent in 2010 and ahead of the national 16.2 percent average. It's been part of a continuing trend of greater activity in the downtown Portsmouth and suburban office markets.

"The Seacoast office market has recorded positive absorption for three consecutive years, signaling that it is continuing to experience a slow and steady recovery," the report stated.

O'Brien said Pease International Tradeport remains a popular but hard-to-fill location for prospective office tenants.

"There are still pockets of office space but we've seen locations like 273 Corporate Drive completely leased," she said. Even the downtown location at 99 Bow St. has been filled.

Despite the optimism, O'Brien said, there's still enough caution in the market that there hasn't been any overbuilding of office buildings, and strong credit tenants can still negotiate favorable lease packages, including improvements and lower long-term rental rates.

By far, the industrial market is the strongest with vacancy in the Seacoast region at 11 percent, which was down from 12 percent in 2010, and it continues to outperform the Greater Boston and national industrial markets.

The reasons for the resiliency noted by the CBRE report are a small market overall (16.2 million square feet), limited land for expansion and less dependency on large multinational companies.

O'Brien said that certain parts and locations of the industrial market are very tight "with vacancies starting to fill and fewer warehousing options available."

But not everything is filling up. Seabrook has seen its vacancy rate decrease some, but it's still at 36 percent. There are still larger, antiquated buildings that are expected to languish unless building upgrades (such as large docking bays, efficient layouts and new ceiling lights) are made.

O'Brien said he believes there will be continued demand for manufacturing and warehousing facilities that could lead to development in available land areas away from Interstate 95 (where available land is almost all developed) and more toward Route 101 Hampton to Exeter and the Spaulding turnpike Dover to Rochester areas.

Kane said Portsmouth remains a draw because of its location, which can draw from three states and the economic magnet that Pease International Tradeport has become.

Kane also cited the efforts of city leaders and planners in Portsmouth who have continued to invest in the city's infrastructure — with efforts such as the State Street project — despite budget challenges.

"All these little things add up, and these investments have paid huge dividends in making Portsmouth even more attractive to companies and people who want to love and live here," he said.

Source: http://www.seacoastonline.com/articles/20120611-BIZ-206110309

Locals reap real estate benefits

As interstate investors are seeing the opportunities in Whyalla, local resident, Emilie Zimmerman is getting in on the action with two Whyalla properties under her belt.

Ms Zimmerman, and her partner Kieran Patterson purchased their first property in 2005.

"It was half a Housing Trust and we were living there for about six years and did it all up," she said.

After catching the investment bug and wanting something bigger, Emilie and Kieran rented their first property out and purchased their second house where they are currently living today.

"My cousin was actually working in a real estate place and he kept bugging us about it, 'just come and look, I think it would be great for you'," Emilie said.

"We always planned it [buying another property and renting out their existing one] but we weren't actually looking just at the time.

"But then I said, 'come on we'll go have a look.'

"Had a look through it, fell in love with it, kept an eye out, but at the time there wasn't much to choose from on the market and towards the end we just said, 'yep let's do it'."

Two years later and with two properties, they both enjoy living in the Whyalla Norrie area.

"I've always lived in it as far as I can remember but it's good, we're around a few older people, so it's more relaxing and safe," Emilie said.

"I feel like I can walk around the block and everything's fine.

"Everyone's friendly, if you see them in the front yard they say hello.

"It's a comfort zone for me and that's important.

"The comfort zone of knowing so many people after living here for so many years and just the size of it, that's got to mean something because if you do go to a city it's totally different."

With so much advice and information out there regarding buying and investing in properties it is important to do your research first,

"I'd say watch the markets because of all the mining boom going around, but when this boom finally does happen; watch out because so many people are going to miss out and so many new employees are going to be here looking for rentals, and they're all going to miss out," Emilie said.

"But if someone's looking into it, do your research, go from there and be careful what real estate company you go through for management."

As Whyalla's housing demand increases and with interstate and locals also choosing to purchase investment properties in the town, 'you don't know till you take the jump, I wouldn't take it back', Emilie advised.

Source: http://www.whyallanewsonline.com.au/news/local/news/general/locals-reap-real-estate-benefits/2572512.aspx

New commercial real estate firm opens in Bellingham

Retail Property Advisors, a commercial real estate brokerage specializing in properties for retail buyers, sellers, landlords and tenants, recently opened in Bellingham.

Neal Swanson, designated broker and owner of Retail Property Advisors, said the Puget Sound market has grown to the point that clients seeking to buy, sell, rent or lease retail space need a firm focused on that niche, even in secondary markets such as Bellingham.

"Clients need representatives who track new tenants and new developments and offer detailed information about the local market," Swanson said in a news release. "Retail Property Advisors also conducts an analysis of various sites and a financial analysis unique to retail properties, not just commercial property in general. We're focused on depth of knowledge within a property type, not breadth of knowledge across many properties."

Swanson offers experience representing clients that include locally owned businesses, nonprofit organizations and franchises of national companies. Previous clients include Five Guys Burgers and Fries, Go Big Paintball, Ace Hardware, Subway and the Whatcom Humane Society.

Retail Property Advisors has an office in Fairhaven at 1200 Harris St., Suite 404. For more information, call Swanson at 360-510-3325 or visit faircommercial.com.

Source: http://www.bellinghamherald.com/2012/05/17/2526066/new-commercial-real-estate-firm.html

Florida’s real estate professionals find reasons to be optimistic in first quarter

GAINESVILLE, Fla. — Florida’s real estate market outlook improved in the first quarter of 2012, according to the University of Florida.

The Survey of Emerging Market Conditions, conducted quarterly by the Kelley A. Bergstrom Center for Real Estate Studies at UF’s Warrington College of Business Administration, revealed that those in the real estate business felt optimistic because of the falling unemployment rate and because they see more activity in rental housing, such as lease signings. The unemployment rate dropped from 9.9 percent in December 2011 to 9 percent in March.

“Positive outlooks for occupancy and rent growth along with an improving employment trend are increasing our respondents’ optimism about the real estate markets in Florida,” said Timothy S. Becker, director of the Bergstrom Center.

The UF Commercial Real Estate Sentiment Index, a measure of the respondents’ own business outlook, reached its highest level since 2007. Bergstrom Center officials attributed the rise to lenders and owners sensing a better lending environment with banks as well as an improving economy.

“With billions of dollars of loans coming due over the next year, the increased lending activity is a welcome sign for real estate owners and investors looking for debt capital to refinance quality properties,” Becker said.

Property fundamentals including occupancy and rental rates improved this quarter with progress in single-family and condominium development, apartments, industrial, land investment and capital availability. Occupancy expectations were rated most favorably in the premium office market. Respondents cited a better employment outlook as the reason for optimism.

Although respondents were optimistic about the industry and the overall economy, they cited concerns about the upcoming presidential election and the state government’s financial situation.

Respondents said that significant policy changes would most likely not be in place before the November elections and not resolving those issues could lead to harsh economic results. Among those issues are the Bush tax cuts and the payroll tax break, which are both scheduled to expire after 2012, and $1.2 trillion in spending cuts that are set to take effect in 2013. Respondents also were concerned with artificially low interest rates, inflation and increased gas prices.

Overall, the survey revealed that the future for real estate in Florida looks positive, but political and economic uncertainties remain. A majority of respondents expect a slow and measured recovery until the conclusion of the presidential elections.

A total of 189 Florida professional real estate analysts and investors, representing 13 urban regions of the state and up to 15 property types, participated in the survey. The survey is done for participants in the commercial real estate market in Florida.

Source: http://news.ufl.edu/2012/05/14/housing-0512/

Real Estate Prospects in Russia Promising

The Russian real estate market was hit hard by the global economic crisis between 2008 and 2010. Growth has since returned to the market and looks set to continue, although global developments and local bureaucratic issues could create problems.

Late in 2007, many investors in Russia believed that the country was immune to what was considered "an American problem" with subprime mortgages. The breadth and depth of the global financial crisis that followed led people to become wiser, or at least more sensitive, to uncertainty elsewhere in the international community and its global effects. Europe's sovereign debt crisis and high levels of unemployment, production issues in the Far East, and continuing political unrest in Middle Eastern nations and their neighbors still feature in the media every day. There is little consensus on how to resolve these issues, although each of them affects the Russian real estate market to a certain degree.

Historically, one of the most significant global factors to influence Russian economic confidence has been the price of oil. While real estate is not quite so volatile, there is a good correlation between oil price movements and real estate rental rates.

Clients of Deloitte are certainly showing greater confidence in real estate following the market's decline between 2008 and 2010. The number of commercial real estate transactions in 2011 reached $8.1 billion, comfortably overtaking pre-crisis levels. The often quoted "prime rental rate" in the office sector has increased to $1,200 per square meter per year (from the low of about $750 in 2009). Foreign investment is also increasing and financing is more readily available, although development financing is still challenging to get. The availability of funding is particularly sensitive to developments in Europe as Russian banks rely heavily on eurobonds and European syndicated loans.

The outlook for the real estate market in Russia is not only shaped by global factors, but by local considerations as well. For example, the bureaucratic process for acquiring a construction permit in Russia is much longer than in other countries internationally. According to data from the World Bank's "Doing Business 2012" publication, the Russian process for obtaining building permission comprises 51 procedures and lasts for 423 days. In comparison, the same process in the United States is composed of only 13 procedures and takes just 26 days to complete.

Making bureaucracy efficient in real estate remains an important challenge for Russia, and developers are actively seeking a simplification of the planning permission process. It remains to be seen how quickly matters will improve in Russia overall, although Tatarstan is a good example of a region where real progress is being made. If Russia makes the bureaucratic process quicker and easier, it will be hugely beneficial for the country: The market will become more attractive to potential investors, there will be more entrants into the market, and construction costs will fall. So what are the prospects for the Russian market over the next few years? The spending power and confidence of investors and everyday consumers will ultimately decide. If mortgages become more accessible and consumer incomes do not decrease, demand for apartments will certainly increase. If shop owners see consumers maintaining their spending patterns, the growth in the number of rentals will continue and the shopping center development projects that are currently frozen will "thaw." On the other hand, office managers who are preparing their next move are likely to be very wary of global trends and will act more cautiously. Their attitudes may soon change for the better, though.

Despite global issues and bureaucratic difficulties, market fundamentals have not changed. There is a shortage of high-quality real estate in Russia, so the prospects for its development remain good, and growth has returned to the real estate market already. There is still room for improvement, and factors beyond the nation's control may affect its growth, but the prospects for the Russian real estate market are promising nonetheless.

Source: http://www.themoscowtimes.com/business/business_for_business/article/real-estate-prospects-in-russia-promising/458351.html

How to Build a Real Estate Portfolio

With property prices currently sagging, more and more investors are looking towards real estate as a smart addition to an investment portfolio. Certainly there is money to be made in property, but there is also a great deal of risk involved. Education and experience are the keys to navigating the often-hazardous property market. Here's a quick guide to help you build up the right property portfolio.

Why should you invest?

Property investment carries with it numerous advantages for investors. According to broker and President of Equity First Realty, Ben Yonge, the current down market is the perfect time to capitalize in the property market.

"Real estate prices are so extremely low. Buying an undervalued or distressed piece of property usually means that it can be 'cash flowed' with a nice annual yield if the right tenants are placed," he explains. "Prices are already on the rise so holding cash-flowing properties for the next three to five years should mean substantial gains in appreciation."

Preparing your finances

Gaining the correct financing is often the key to building a great property portfolio. It's always wise to arrange financing before looking at your first property, to avoid losing out to other buyers who may have already secured financing. Many lenders will demand an up-front sum of up to 30 percent as a down payment on the loan, so ensure that you've got the money prepared before proceeding.

Know your market

Buying property is a major investment, so it's important to analyze all the facts before taking the plunge. If you plan on renting the property, Yonge says that the current rental market and total cash required are the two most important factors to consider.

"Buyers need to know where they're buying and should verify that the property can be tenanted quickly," he says. "In addition to purchase costs, buyers must also factor in the costs to bring the property to rental ready condition.

Similarly, if you plan on renovating the property in order to resell it, you should speak with a real estate agent or financial planner to ensure that the investment will be worthwhile.

Taxes

Even the brightest prospects can be sunk by a heavy tax burden. That's why it's always wise to consult a real estate attorney about the relevant taxes before closing a property deal, to identify any loopholes or money-saving measures. For example, investors may be able to sidestep capital gains taxes on an investment property if they have lived in the home for at least two of the last five years, according to the IRS.

Growing your portfolio

Once you've successfully purchased your first property, you can begin growing your investment portfolio. To help expedite the process, Yonge recommends hiring a professional. "Working with a good real estate agent, and preferably a good wholesale brokerage can save a ton of time and greatly increase the number of deals a buyer is able to analyze," he notes. It may be wise to invest in several different types of property to reduce risk in the face of market fluctuations.

Source: http://www.foxbusiness.com/investing/2012/05/10/how-to-build-real-estate-portfolio/ Read more: http://www.foxbusiness.com/investing/2012/05/10/how-to-build-real-estate-portfolio/#ixzz1uY0wzcRA

Commercial Real Estate Bouncing Back

LAS VEGAS -- Office buildings and strip malls are slowly filling up. Commercial real estate is traditionally a year and a half behind residential, but thanks to more local business owners and franchisees setting up shop, the vacancy rates are going down.

Town Square is now a mix of chains and local stores. On Saturday, the newest tenant, the Container Store, will open its first location in Nevada.

Retail is the one area in commercial real estate that is growing. Office space isn't, with nearly a quarter of all the space in the city vacant. Industrial space vacancy is at about 15 percent, which is down from a year ago. But these numbers are still significantly low compared to national averages.

One local expert says the numbers won't change until companies start hiring.

"Any major jump is going to be due to employment. Really, commercial real estate is just a place to store workers while they're working. And if you do not have a demand for more workers, or if you're not hiring more workers, you just don't need more commercial real estate," said John Stater with Collier's International.

The shopping center at Eastern Avenue and Serene, just off the I-215, is booming. There is only one space open.

Rents have been at historical lows, so a lot of tenants have been able to renegotiate their rents to lower rates, while others business owners, like the dollar stores, have been able to get into buildings they previously couldn't afford.

Source: http://www.8newsnow.com/story/18217000/commercial-real-estate-bouncing-back

UK real estate deal success

MANAMA: Gatehouse Bank, a London-based wholesale Sharia-compliant investment bank, has announced the successful delivery of its realised investment in UK real estate.

This was through the sale of two properties as part of a UK student accommodation portfolio in a deal worth £34.4 million ($55.5m).

The deal represents an excellent return for Gatehouse's investors, who have benefited from an internal rate of return of 18.6 per cent during the two-year holding period, and a return on investment of 37.2pc on exit.

"Over the past two years we have invested in the student accommodation sector on behalf of our investors, confident of the excellent return potential, which we believe we have successfully delivered in the realisation of the UK student accommodation portfolio investment," said chairman Fahed Boodai.

"Gatehouse Bank was quick to seize the market opportunity to enable an impressive return on investment.

"We promised that we would deliver a solid return to our investors, and we have achieved that result yielding a 9.1pc return in the first year, and an increase to 9.7pc in the second year.

"When the time was right, we managed to deliver a successful exit result within two years, one year ahead of schedule as we have achieved our targeted returns. Importantly, we delivered the asset sale with a view to reward our investors with a profitable return on investment as a priority, rather than retain asset management fees for the additional holding period.

"Gatehouse has clearly demonstrated to its investor clients its ability to develop a commendable track record of transactional experience," he said.

"This is due to our unrivalled expertise in the market, which includes a strong UK and US real estate team of originators, analysts, asset managers and a credit and market risk team who provide end-to-end commercial real estate solutions to investors."

Source: http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=328731

REAL ESTATE DICTIONARY

Agency - Agency means a relationship in which a real estate broker or a licensee represents a client by the client’s consent, whether expressed or implied, in an immovable property transaction. An agency relationship is formed when a real estate licensee works for you in your best interest and represents you. Agency relationships can be formed with buyers/sellers and lessors/lessees.

Agent - One who acts or has the power to act for another.

APR - Annual Percentage Rate is the relationship of the total finance charges associated with a loan. This must be disclosed to borrowers by lenders under the Truth-in-Lending Act.

Appraisal – An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion value.

Appraiser – An independent person trained to provide an unbiased estimate of value.

Appreciation – An increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent.

Closing Costs - Fees and expenses, over and above the price of the property that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fees, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges. Also known as "settlement costs".

Commission – Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.

Contingency – A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding.

Contract – A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound as prescribed.

Conveyance – A term used to refer to any document that transfers title to real property. The term is also used in describing the act of transferring.

Deed – A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

Equity – The interest or value that an owner has in property over and above any indebtedness.

Ethics – The system of moral principles and rules that becomes standards for professional conduct.

Fair Housing Act – The federal law that prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status, and national origin.

FHA Loan – A loan insured by the Federal Housing Administration and made by an approved lender in accordance with the FHA’s regulations.

Home Inspection – An inspection of a home to discover damage or defects.

Homeowner’s Insurance Policy – A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks.

Interest – A charge by a lender for the use of money.

Legal Description – A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it.

Loan – A loan is a type of debt.

Market Value – The most probable price property would bring in open and competitive market under normal conditions.

Mortgage – A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.

Plat – A detailed map that illustrates the geographic boundaries of individual lots.

Private Mortgage Insurance – Insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure and deficiency.

Protected Class – Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped, and others.

Real Estate Settlement Procedures Act (RESPA) – The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees.

Real Property – The interests, benefits, and rights inherent in real estate ownership.

Regulation Z – Implements the Truth-in-Lending Act requiring credit institutions to inform borrowers of the true cost of obtaining credit.

Sales Contract – A contract containing the complete terms of the agreement between buyer and seller for the sale of a particular parcel or parcels of real estate.

Title Search – The examination of public records relating to real estate to determine the current state of ownership.

VA Loan – A mortgage loan on approved property made to qualify veteran by an authorized lender guaranteed by the Department of Veterans Affairs in order to limit the lender’s possible loss.

Abu Dhabi fund eyes Indian real estate sector

Abu Dhabi Investment Authority (ADIA), one of the world's biggest sovereign wealth funds, plans to invest directly in Indian real estate in an effort to diversify from its current strategy of ploughing money into the country through realty or private equity funds, sources familiar with the matter said.

ADIA's investments in Indian real estate to date total $400-$500m, largely through property and private equity funds, and the fund is now scouting for direct investment opportunities, one of the sources said.

The sovereign fund, whose assets range from Citigroup bonds to a stake in Britain's Gatwick airport, is close to hiring a country-dedicated fund manager from a large private equity firm to look for real estate opportunities in Asia's third-largest economy, the sources said.

ADIA recently invested $50m in an India-focused real estate private equity fund run by Red Fort Capital, one of the sources said. In January, Red Fort said it planned to raise $500m for its second India-dedicated property fund, of which it had already raised $80m.

Red Fort officials could not immediately be reached for comment.

The sources did not give the name of the person ADIA is hiring and spoke on condition of anonymity as the matter has not been made public yet.

A spokesman for ADIA in Abu Dhabi declined to comment.

Large sovereign wealth funds including Singapore's Government Investment Corp (GIC) are keen to invest in Indian property as the country's cash-strapped developers seek funds to kickstart development and reduce debt.

Debt held by Indian developers hit 1.8trn rupees ($35.74bn) as of September 2011, according to a report by Infrastructure Development Finance Corp.

International private equity firms, which have invested $13bn in the Indian real estate sector since 2005, are expected to exit from up to $5bn of investments over the next couple of years, according to property consultancy Jones Lang LaSalle.

This will widen the funding gap for developers at a time when home sales are low and banks are cautious about lending to the sector.

GIC has been in talks with several Indian developers, including oil-to-steel conglomerate Essar Group's real estate arm, Equinox Realty, and developer Godrej Properties, to invest in their projects.

ADIA has expressed "keen interest" in investing in the country, India's Trade Ministry said in a statement in January, adding that it had agreed to speed up the creation of a joint working group to facilitate the fund's investment.

Real estate investments constituted between 5 and 10 percent of ADIA's overall global portfolio, according to its 2010 annual review. The real estate division is run by Bill Schwab, who joined the fund in 2009 from JPMorgan Chase.

North America and Europe accounted for a major chunk of the ADIA's investments, with 60 percent to 85 percent poured into those regions. Emerging markets constituted about 15 percent.

The fund returned 7.6 percent on an annualised basis over a 20-year period as of December 31, 2010, it said in its review.

While the ADIA does not disclose its net worth, analysts estimate its assets to range between $400-$600bn.

Source: http://www.arabianbusiness.com/abu-dhabi-fund-eyes-indian-real-estate-sector-449155.html

Dublin’s real estate prospects slightly improved

A new report has revealed that Dublin is showing signs of slight improvement in the real estate sector, while Istanbul, Munich, Warsaw, Berlin and Stockholm are the top five European cites for real estate investment.

The PricewaterCoopers (PwC) and Urban Land Institute (ULI) report notes that Europe’s economic crisis has left real estate investment and development in limbo, with little relief expected in 2012.

‘Emerging Trends Real Estate Europe’ says that the prospects for any turnaround this year hinge on how recent regulatory measures will affect banks’ willingness to make commercial loans, and whether another financial industry collapse caused by sovereign debt issues triggers a widespread release of assets by banks to investors.

It predicts that this year, property financing will become a major casualty of the measures banks take to tackle regulatory and macro-economic pressures; deleveraging will not free up capital for fresh property lending; debt will become more short-term and expensive; and the need to find alternative sources of funding will become imperative.

“The profound instability is affecting the providers of equity and debt,” said Joe Montgomery, chief executive of ULI Europe.

“We are operating in an environment that is very difficult to model. The uncertainty over the level of banks’ exposure to sovereign debt default, coupled with uncertainty over the regulatory changes introduced as a result, has caused significant elements of the capital markets to be reduced to a state of near paralysis.”

Meanwhile in 2011 Dublin was rated the lowest of the 27 cities evaluated for both investment and development prospects, according to the report.

In 2012 there is some improvement, with Dublin ranking second from the bottom on prospects for investments, fifth from the bottom for new investments and third from the bottom for development.

The general consensus, it says, is that Ireland’s economy has been through the worst, although uncertainties in the eurozone, the UK and the US, have presented a whole new set of challenges.

“The survey results indicate increased interest from international investors in Irish property and we are seeing that on the ground also,” commented Enda Faughnan, real estate partner, PwC Dublin.

“The expectation is also that the combination of the very positive changes for the property sector announced in Budget 2012 and increased activity from the banks will result in a much stronger transaction flow this year.”

Karina Corbett

Source: http://businessandleadership.com/business/item/34108-dublins-real-estate/

Real estate market rebounding: 'It's a good time to buy'

MANSFIELD -- Robin Walker wants people to be as excited about real estate as she is.

"Real estate is still a good investment," said the 2012 president of the Mansfield Association of Realtors. "The definition of investment is something that may be worth buying because it may be profitable or useful in the future.

"It is a good time to buy."

Walker said the market appears to be stabilizing after some rocky times, adding sales were up last year compared to 2010.

"I'm just excited by the year to come," she said.

Walker noted interest rates are at an all-time low.

"Our phones have been ringing," she said. "Usually, weather plays a role in real estate. When it's snowing, people don't really want to get out."

On March 1, Welcome Home grants will resume. To qualify for the money, people must not own a home.

Walker said Richland County is a prime location for homes because of its proximity to bigger cities.

"I can (live here) and work in Cleveland or work in Columbus," she said. "I can still live in a small town that is a great place to raise a family."

Research shows home sales could rise by 15 percent to 20 percent, based on people who are being approved for mortgages today versus those who were approved 10 years ago.

"A normal housing market would help fuel a continuing economic recovery, spur consumer spending and spawn more job creation," Walker said.

Walker said stabilizing and restoring the health of the housing market is critical to a broader economic recovery. Experts call for increasing lending to credit-worthy home buyers, as well as more loan modifications, refinancing and short sales to reduce foreclosures.

Walker encouraged people facing foreclosure to seek assistance.

"There's help available. If they want to keep their home, they can get help," she said. "Call a Realtor; we can help you. We do more than just help people buy and sell homes."

Source: http://www.mansfieldnewsjournal.com/article/20120226/NEWS01/202260310/Real-estate-market-rebounding-s-good-time-buy-

Local real estate markets expected to continue to 'Spring Forward'

The local and national commercial real estate markets are expected to continue its to grow slow and steadily this year, with the economy gaining speed in 2013.

That was part of the forecast delivered by experts Thursday during the 2012 CBRE The Furman Co. Upstate Real Estate Forecast Symposium at the Peace Center for the Performing Arts.

During the 2012 forecast themed, “Spring Forward,” Brian Reed, vice president of client services at CBRE/The Furman Co., said the economy is picking up and that the local economy is actually stronger than the national economy in terms in coming back from the recession.

A lot of that strength, he said, is being driven by manufacturing growth.

“We’re a major manufacturing market and demand for manufacturing goods internationally is really kind of driving manufacturing at the local level,” he said.

Recovery of the manufacturing sector is also a reason that “clearly, the U.S. economy is expanding,” said Asieh Mansour, head of Americas Research, Global Research and Consulting for CBRE in San Francisco, CA., and a keynote speaker at the symposium.

‘There’s global demand for U.S. manufacturing and I think within that framework, Greenville is going to benefit because it has a lot of exposure to the manufacturing sector,” Mansour told GreenvilleOnline.com.

“The type of goods that it is producing are not only domestic but global and not only in the Euro-Zone, but also in many of the growing Asian and Latin American markets,” she said. “I think that’s positive. I think the growth in the U.S. economy is positive and I don’t expect a depression.”

Mansour said 2012 will still be a “transition period” for both the Greenville and national economy. But, “I think when the economy is going to be on full speed is really going to be 2013.”

Among the risk factors in that growth, aside from the Euro-zone, she said, is “premature fiscal tightening in the U.S. when the U.S. economy is so fragile.” If that happens, she said, it could impact every single market.

Thus Mansour said she was ‘very happy’ when the Congressional House decided to pass the payroll tax cut and unemployment insurance extensions.

Mansour said she is also watching oil prices.

“There’s a lot of rhetoric against Iran right now. Oil prices are now over $100 a barrel and that can impact trade, transportation costs, consumer spending, so that is another risk factor to keep an eye on,” she said.

Source: http://www.greenvilleonline.com/article/20120216/BUSINESS/302160035/Upstate-real-estate-forecast-revealed?odyssey=nav%7Chead

City real-estate values fall

Total real-estate values in the city of Charlottesville decreased by 1.22 percent last year, according to assessment figures released Tuesday by the city.

Of the city’s 13,031 taxable residential parcels, approximately 39 percent will show a decline in value, while 59 percent will show no change, according to a city news release. These figures do not include new construction and property improvements.

Reassessment notices were mailed Tuesday to all city property owners, according to officials.

This year marks only the second time since the city began keeping records that values declined overall. The first occurred in the 2010 assessments, when existing residential properties fell 2.19 percent, and total values fell 0.76 percent.

For 2012, assessments for existing residential properties declined by 3.08 percent, while assessments for existing commercial properties increased by 0.84 percent.

The average decline in value is about $10,000, according to City Assessor Roosevelt Barbour Jr., but specific numbers depend on the neighborhood.

“We’ve got a lot of sales that are under assessment, but we don’t have a lot of people losing their homes,” Barbour said. “That’s good.”

Foreclosures jumped from 43 in 2010 to 53 in 2011, an increase of nearly 25 percent, Barbour said, adding that Charlottesville is still seeing fewer foreclosures than other localities.

Barbour, whose office reviews previous assessments and sales information to determine property values each year for tax purposes, has said the decline can be chalked up to the “continuing slow economy.”

The assessor divides the city’s residential properties into 47 different sections, and Barbour said only one section — a part of Belmont just west of Avon Street — saw an assessment increase.

This year’s decline follows an increase of 0.63 percent last year, largely due to new construction.

Downward real estate trends are also straining the city budget. Officials are working to find a way to close an estimated $1 million to 2 million deficit, caused partly by declining real estate revenue.

City budget officials are projecting real estate revenues of about $49.9 million for fiscal year 2013, a drop of about 1.1 percent, or about $550,000, from the current budget. Officials projected real estate revenue of about $50.4 million in the current year, but that number was also revised downward by 1.4 percent.

Other revenue streams — particularly meals and lodging taxes — are performing better than expected, which helps to balance out the stagnant or falling real estate revenue, officials said.

“… We see no overall negative impact due to the decline in assessments on the fiscal year 2012 budget,” city spokesman Ric Barrick said in an email.

Property owners who have not received an assessment notice by Monday or those with questions can contact the assessor’s office at 970-3136.

Assessment numbers are accessible on the city’s website at http://realestate.Charlottesville.org.

Property owners who wish to discuss an assessment must do so by March 1 to be eligible for a review.

Albemarle County plans to finalize its assessments today.

Source: http://www2.dailyprogress.com/news/2012/jan/31/city-real-estate-values-fall-ar-1653961/