Dare We Say It? Economic Indicators Improve for Commercial Real Estate

Ross Moore has changed his outlook for the better in these last few weeks of 2010.

As national chief economist for commercial real estate services company Colliers International, Moore follows about 100 economic indicators that keep his finger on the pulse of the economy and the commercial real estate industry. And since the beginning of the fourth quarter, that pulse has quickened.

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Jobs & Recovery :: Still the Story

Deal Flow Mushrooms, But Real Estate Recovery Hinges on Job Growth

The nation’s credit markets are showing early signs of stabilizing after the long and harsh economic crisis, and deal volume across the commercial real estate spectrum is increasing. But the job market remains volatile, and until it shows greater strength, the office, multifamily and other property types will continue to suffer.

That’s the conclusion of economists from New York-based research firm Reis. The national unemployment rate in October was 9.6%, according to the U.S. Bureau of Labor Statistics, and economists project that it will creep upward in the coming months.

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Right-Sizing :: Reduce & Re-Use

While most retailers are reducing square footage to save money on the bottom-line, the concept can be applied across markets. Reducing unnecessary space can save money, energy, and open up many more options for retailers, non-profits, churches, and even residential use. Why have vacant space that sits empty when it can be re-used in other ways (generating income? or goodwill?) or reduced all-together. Trendy now, but a solid move.

Retailers Look to Small Stores for Bigger Profits

The change reflects two trends in the retail world: Chains looking for new ways to cut costs in the sour economy, and consumers demanding a less sprawling shopping experience as they spend with greater purpose. [...more...]

Commercial real estate lending has loosened up?

For those looking for financing, maybe now is the time to move into the market. As you can read the report below from Retail Traffic, it is a good news/bad news scenario. For churches looking to obtain financing, there is still great opportunity with private equity and specialty lenders.
Very informative article here...

Liquidity for Retail Assets Increases Even as Fundamentals Lag

Commercial real estate lending has loosened up considerably in the past six months, leading to more acquisition activity and making it easier for borrowers facing maturity to refinance their loans. And most industry experts feel that liquidity will only increase in 2011.

The bad news, however, might be that the capital marketplace has recovered from the credit crunch a bit too quickly, with many transactions spurred on by record low interest rates rather than improving property fundamentals. [...more...]

Phoenix area sales rise for office, industrial buildings

The financial gridlock that has frozen Phoenix-area commercial-real-estate sales over the past three years has begun to break up, according to brokerage-firm executives...[...more...]

Commercial real estate market stagnant, brokers report

Third-quarter average rent for retail properties was $15.71 per square foot, down from $17.37 a year earlier.

Of particular concern, the company said, was the notable increase in available "big-box" space, which CB defines as single-tenant retail properties of at least 10,000 square feet...[...more...]

Power Shifts to Tenants as Economy Brakes Amid Glut of Vacancies

Roughly 25% of the nation’s leased office space is set to expire in 2011 or 2012 and tenants are moving into the driver’s seat in negotiating new terms with landlords already pressured by a glut of vacant space... [...more...]

Bank Watch: Regulator Says Bankers, Not Bricks, Main Reason Behind Most Bank Failures - CoStar Group

...While it is clear that commercial real estate and construction and land development loans have figured in most every bank failure in the last couple of years, it is also becoming evident that bad bank management and, in some cases, outright deceit, were at the core of many of the banks' problems...[...more...]

Office Market Vacancy Expected to Peak in Fourth Quarter

Though demand for office space remained weak, the second quarter delivered the first positive net absorption in a year and a half thanks to a limited amount of space being returned to the market. [...more...]

Lenders increase efforts on bad loans

After months of relative inaction, a number of commercial real-estate lenders have increased their efforts to dispose of poorly performing mortgage loans, Phoenix-area real-estate analysts said.

The uptick in lender activity began a few weeks ago...[...more...]

CRE & Inflation

As a Hedge Against Inflation, Commercial Real Estate Investment Remains a Smart Play

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Bidwill seeks rezoning for 129 acres near University of Phoenix Stadium in Glendale

Offices, hotels and apartments could take root on 129 acres surrounding University of Phoenix Stadium, home to the Arizona Cardinals.

The Arizona Cardinal Football Club LLC, managed by Bill Bidwill, the team's owner, has submitted applications to Glendale to rezone the land from agriculture to mixed-used development for two projects, Sportsman's Park West and Sportsman's Park East. [...more...]

Apartments Stage a Comeback as Renters Return in Surprising Numbers

Phoenix may not be quite there, but this looks good for the overall picture...read below...

After two years of rising vacancies and slumping rents, apartment owners have reason to be cheerier these days.

According to the latest survey of 169 markets across the U.S. by researcher Reis, the national apartment vacancy rate peaked at a record 8% in the fourth quarter of 2009 and remained unchanged in the first quarter of 2010. Asking rents increased by a scant 0.1% in the first quarter, but that was the first gain since the third quarter of 2008. [...more...]

CRE Prices Ticked Higher in April

The latest numbers from the Moodys/REAL Commercial Property Price Index (CPPI) show that prices continue to move sideways and that a bottom in pricing seems to have formed.

The CPPI shows a return of positive 1.7 percent in April for the all properties national database. The rise comes after a fall in the index in February and March. Ultimately, observers are projecting...[...more...]

Projecting the CMBS delinquency trajectory

More predictions and projections.....

"Because we live in the day-to-day analysis of the actual bricks and sticks — the collateral supporting these loans — and we see things deteriorating further before they get better, especially this year, my position has been that from now through the remainder of 2010 we will see the default rate continue to grow, potentially at a rapid pace," Innaurato said, pointing to "more and more borrowers not only having properties that are showing signs of distress but also more and more borrowers asking for debt release. And not every one of these borrowers is going to be able to negotiate or realize their hopes and expectations." [...more...]

Arizona commercial real estate brokers: Some lenders ignore crisis

Commercial real-estate brokers have coined a phrase, "extend and pretend," to describe lenders' sluggish response to the billions of dollars in bad commercial mortgages on their books... [...more...]

Church's path to God blocked by Glendale's zoning code

Hector Mendoza walked into the little church with a gun tucked into his pants. It was part of the uniform for a guy like Hector who was, to put it nicely, no choir boy.

He was more into gangbangers than Bible thumpers. At 26, he was going through life armed not with the word of God but with an AK-47, two shotguns and a pistol, none of which were registered to him. His drugs of choice: crystal meth and cocaine.  [...more...]

Real Estate Investor Sentiment on the Rise

Recovery on the Doorstep
With the U.S. economy improving, investors plan to increase their stakes in commercial real estate.

Commercial Real Estate Investor Sentiment Turns Positive: Will It Last?
For the first time since 2005, investor sentiment is on an upward trajectory. According to the National Real Estate Investor (NREI)/Marcus & Millichap Investor Outlook Study for the first quarter of 2010, respondents started to show signs of being increasingly positive about the commercial real estate market.[...more...}

10-big-commercial-real-estate-busts

As acute as the pain has been in the U.S. housing market, commercial real estate has been no stranger to trouble. Here is a glimpse of some high-profile victims that have been claimed so far. [...more...]

Would You Live in an Abandoned Mental Hospital?

condo conversion to the extreme? so, would you live here?

Would You Live in an Abandoned Mental Hospital? | Sustainability | Fast Company

Timed perfectly with the release of Shutter Island, Kjellgren Kaminsky Architecture plans to turn one of Sweden's old, ugly mental hospitals into a sustainable apartment complex. Dubbed Parkour, it offers a sense of community to residents. [...more...]

Commercial real estate tries a head fake - Feb. 4, 2010

"Extend & Pretend" seems to be a good title...can it hold water long-term?

At the encouragement of industry regulators, banks have extended the terms of many of their commercial real estate loans, hoping that property values or occupancy levels will improve before long.

"There is an element of 'extend and pretend' going on," said Tanya Azarchs, credit analyst and managing director for Standard & Poor's. "It is in their [banks'] interest to do that." [...more...]

Retail Tenants Appeal for Rent Relief

Re-negotiations...the wave of the present...

Requests for rent concessions soared in late 2008 and during the first four months of 2009, says Casey. Currently, about 5% of the company's tenants, 100 out of 2,000, receive some form of rent relief. The number of requests for help is higher than the amount granted, however. An estimated 10% to 15% of the REIT's tenants seek relief, the executive says. [...more...]

Cash remains elusive for Arizona startups

Venture-capital investing in Arizona slid more than 70 percent in the fourth quarter of 2009, providing a lackluster bookend to one of the worst deal-making years in recent history.[...more...]

In Valley, 80 mil square ft. of business space is vacant

The Valley's real estate boom-and-bust cycle left an almost unimaginable 80 million square feet of excess office, retail and industrial space on the rental market at the close of 2009 - the rough equivalent of 1,600 football fields.[...more...]

In 2010, Will Investors Who Hesitate Be Lost?

...The imbalance should result in a further decline in commercial real estate valuations. Over the next six months, Rogers predicts that property values will decline another 4% to 9%, on top of the 39% drop that's already occured since the peak in December 2007...[...more...]