Fast 'In Contract" Properties A Sign Of Encouragement

A lot of agents would be discouraged if they were working to put buyers into investment properties and each time they are ready to write the offer, we learn the subject property has already gone into contract. Colleague Jack Turner and I have been experiencing just this very dilemma this week as part of representation of a specific buyer. The properties that make sense, sometimes a day or two before -- sometimes just an hour or two before -- are going into contract. Disappointing? Not really, though the search continues. The reality? THIS IS GOOD NEWS! While I am frustrated (a little, I will admit) that the search continues, the positive news on this is that good, solid investment properties are coming to market, they are being priced right, and long pent-up buyers are stepping up and buying them. The market is improving, my friends. That quality properties are suddenly showing up? Good news. That they are going into contract almost immediately? Also good news.

The Case For Commercial Real Estate

The Prudential organization is well versed in commercial/investment real estate. A new report is out making the case for commercial R.E. investments. Click here to access the full report. If you have any questions, or if I can be of assistance to clarify anything you read there, please do not hesitate to contact me at: bgreer@pcreohio.com.

Seniors Housing Continues To Be Hot

Senior housing development and re-development continues to be hot. I am bullish on this like you can't believe, and have been working on such a project here in Central Ohio with my partners at Blue Rock Realty Investors. But I'm not alone in this assessment. Healthcare REITs continue to invest as the senior housing market consolidates somewhat. Read about it here.

Do You Have A Buyer For My Building?

Here is something to tickle your funny bone. Truly, the outside world thinks we commercial agents have it easy.... Yeah right. While not representative of all Sellers, it is not uncommon to have these kind of meetings (tongue firmly planted in cheek). Do You Have A Buyer For My Building%3F

Two Straight Quarters of Healthy Apartment and Condominium Building Conditions, Says NAHS

We've now experience two consecutive quarters of healthy market conditions for new and existing apartment and condominium buildings, according to the National Association of Home Builders. Read about it here. That is GREAT news! We are already seeing a return to a healthier situation here in much of Ohio.

Many Reasons Why Real Estate Market Still Slow

There are a lot of reasons real estate hasn't been moving so well the past 18 months. By some accounts, commercial/investment real estate transactions in 2010 were off some 90 percent from the previous year. Many reasons: availability of credit, buyer financial situation, tenant instability, and so on. In the residential market, many of the same issues have been present. An Ohio newspaper has a piece this week on home sales, the many ways sellers have worked to upgrade their properties so they will sell faster, and some of the impediments that continue to pop up. We are seeing an uptick in commercial/investment movement in the past 60 days, and that is a good sign. But it is regional. Not all locales across the U.S., or even around the world, are positive movement. It is a watch and wait economy. But savvy buyers who are willing to snatch up the right property at the right price will do well. That means jumping in and writing a contract and not being hesitant to pull the trigger. For sellers -- no matter whether they be commercial/investment or residential -- it means being realistic about the selling price. Far too many sellers (and their agents) still have an unrealistic view of where a property should sell. Its about the numbers folks. If it doesn't make sense as a buyer, move on. There are too many opportunities out there (not the first time I have written those words). If you are a seller, make sure your price is realistic, and your agent (assuming you are using one) is being straight with you about the market. Things are improving. But slowly...

Finally Looks Like Home

The staff is in. The boxes are (mostly) unpacked. Just a few cases of archival documents still need a home. Work continued, despite the change in routine.

The last of the boxes moved out of the last cluttered common area -- the conference room. And last week, signage in place. Ah, the little things . . .

$1 Trillion In Private Equity Looking For Businesses To Buy

While this isn't a post about commercial/investment real estate, there is quite a busy trade these days in good, solid businesses.

In fact, by some estimates, there is some $1 trillion in money held by private equity funds that are itching to invest in good businesses. After taking a couple years off, buyers are hungry for product and are awash with funds. My partners at Blue Rock Realty Advisors and I are going to be taking a second look at business opportunities with our clients, as some heavy-hitter business brokers with which we want to partner are emerging in this go-go climate.

So if you have a business with a value of at least $10 million, or even $50 or $100 million, we would like to talk to you. A long, healthy list of buyers is out there . . . .

A '1031' Did You Know Primer

Avoiding capital gains taxes are the primary reason why many investors take advantage of IRC 1031 exchanges.

But there are a host of other reasons why a 1031 tax-deferred exchange might be a smart strategic choice for owners of commercial/investment real estate:

For one, you can exchange fully depreciated property to obtain the benefit of a new depreciation schedule. Or a 1031 would work well if a taxpayers business is being relocated. Sometimes the investment property needs to be in a different geographic location in order to streamline ease of management.

Did you know that investors can exchange into property that better accommodates a taxpayer's trade or business? Sometimes it is as simple as replacing time consuming management properties with more easily managed properties.

And sometimes it just comes down to a need to replace non-income producing property with income producing property.

Many needs. One dynamic investment strategy.....

Which Investors Will Dominate in 2011?

Globe Street news has an interesting poll that asked we CRE practioners about the business climate through the remainder of this year, and which investors we think will dominate the market in 2011.

Here are the results:

50% REITs

13% Foreign Capital

12% Institutional Types

25% Private, High Net-Worth Players

This is exactly the same way I ranked the answers. Right now, to the good, iternational investors are getting more comfortable with the economy here, and are seeing opportunity and seizing it when it makes sense. Institutional investors are still sitting on their hands to a great degree for a number of reasons, but there is some money movement.

Private, high net-worth investors are coming out the woodwork, capitalizing on opportunities left and right, and have been a solid alternative to traditional lenders who are still largely absent from the commercial/investment real estate market. Finally, real estate investment trusts (REITs) are uncorking a boatload of money that has been building up for the past 2-3 years, during which time many REITs withdrew from acquisitions and dispositions. Their pend up demand for new product, enormous sums of cash on hand, and product that with each passing week is becoming more and more of a bargain is prompting REITs to pull the trigger.

'CRE Act 'Aims To Make Equity Investments More Attractive Via Tax Breaks

The International Council of Shopping Centers (ICSC) is aggressively lobbying the U.S. Congress in support of legislation to provide short term tax incentives to jump start re-investment in commercial real estate.

A good idea that is long overdue, IMHO.

I can envision the House of Representatives jumping on this, though in the Senate it will be a tougher sell, as many individuals in the political party that controls that body of Congress tend to sneer at, and disbelieve, the power of such tax breaks.

The CRE Act offers tax incentives that would make new equity investments far more attractive. The key provision is that 80 percent of the newly invested capital must be used to reduce the outstanding balance on the commercial loan, with the balance to be used for capital improvements such as increased energy efficiency, and leasehold improvements to attract new tenants.

HR 1147 is a no-brainer that should be passed if this Congress and the White House is serious about the economy. I do want to take a closer look at the legislation to make sure there are no legal landmines, nor bizarre strings attached that make implementation problematic.

But on its face, it is a win-win for everyone in my book.

Industrial Picking Up Steam In Numerous Markets

Multifamily investments have been the rock star of the commercial real estate investment pool for some time, showing solid returns and -- unless it is poorly managed -- stable or steady increases in value, in most markets.

The bottom line? People have got to live somewhere. And now, with housing starts at a dead stop and the economy still languishing, folks who have lost their homes are either renting houses, or in many cases to save a buck going back to an apartment. Which competes with younger people in the workforce getting their first apartment. Hence the pressure on multifamily properties that keeps rents, and values, up. How do we know? How often to you see signs that say "free heat" or "free TV" or "free washer/dryer" if you sign a lease? The giveaways are gone because owners and managers no longer need those enticements.

So today it is interesting to note that industrial properties in certain markets of the U.S. appear to be picking up in value. Plus, institutional investors appear to be gravitating more toward the industrial sector, which is raising quite a few eyebrows.

Along the eastern seaboard, a 613,000-square-foot distribution center in Baltimore sold for $26.4 million -- a 35 percent increase over the last time it traded in 2009.

We are starting to see this elsewhere as well, as long languishing industrial assets begin to see more tenant activity, which in turn, spurs activity from investors. Even last year, institutional observers noted that as liquidity returns and buyers start looking around for opportunities, the industrial sector would be poised to improve significantly. In Europe, investors there are excited because the industrial sector also has a rosy outlook.

All in all, industrial is picking up. In Ohio, there are improvements in both occupancy and sales values. Like any other real estate, it all comes down to location, location, location. Some areas are anemic where it comes to property values, but overall industrial continues to improve. I won't call it "the new multifamily," as some others are doing. But it bears watching!

U.S. REITs Nervously Watch Japan

As the world watches events unfold in Japan, and our hearts go out for the Japanese people affected by homelessness, cold, hunger and the fear of what is happening at a badly damaged nuclear power plant, business still plods on.

And U.S. REITs are nervously watching the island nation and its ability to climb up from the abyss of this disaster. True, Japanese REITS have been hammered far harder, but American real estate investment trusts have significant financial commitments in Japan.

Time will tell, but the devastation is significant there. I know people who have family there. They are safe and did not lose their home -- they live in Tokyo -- but uncertainty over the nation's infrastructure, and the ability to obtain vital needed services is top of mind.

The Japanese people are resilient, but it will take time. For now, most critical is getting the power plant situation under control even as rescue workers continue to search for possible survivors.

I'm On Twitter Now

Well, jumping a little later than some, but still jumping. I am on Twitter now and will be sending out periodic tweets about investment real estate issues, trends and alerts.

You can find me at the following Twitter address: BrentGreerRE

Blue Rock Partner Jack Turner Starts A Blog

My partner in Blue Rock Realty Advisors, Jack Turner, has just put up a new blog, titled "Jack Turner's Realty Investment World."

He is of the same philosophy as I -- its not about transactions, but about finding the right high quality fit, the appropriate solution, for our real estate investor clients. Jack's background is a little different than mine; in addition to brokerage, he has wide-ranging experience in development and construction.

I have already linked Cash On Cash to his new site. Among his first posts are ongoing discussions on the use of self-directed IRAs to purchase investment real estate. While I have posted here a couple of times on the subject in the past, Jack has included commentary on some of the more recent regulations and restrictions of such.

Check out Jack's new blog soon, and often. I am confident it will be worth the trip! And drop him a note or comment to say hello. I remember launching Cash On Cash . . . I wondered whether anyone was taking the time to look at it after all of the effort getting it ready to publish. Jack is going through the same trials. But the product is sharp and -- knowing him -- will also be rich with useable information.

Congrats on the new initiative my friend!

Colleague Is Planning A Central Ohio Home Show

A colleague of mine in the business, and a good friend, Bill McCorkle, has announced the first ever "Polaris Home Show." It is a new homes show kicking off in May after what has been a snowy, wet, rainy miserable winter (yes I know I'm tempting fate as winter is not yet over...).

The show is set for May 19-22 at Little Bear Village, his home and golf course development in southern Delaware County, Ohio. Did I mention golf? Why yes I did! A few years ago, Bill and company developed a really nice nine hole, Par 3 executive course at the center of his development.

Several prominent Central Ohio builders are all ready lined up. In addition to being a talented investment agent and developer, Bill is an outstanding marketer. So far, this is looking to be a fantastic event. I plan to be there. If you are in the area, check it out!