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.
Thursday, March 17, 2011
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!
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!
Wednesday, March 16, 2011
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.
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
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!
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!
Thursday, March 10, 2011
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!
Friday, February 4, 2011
No One Likes Change....
My office is moving from downtown Columbus to the northern suburbs. A good change, to be sure, but . . .
. . . No one likes change.
And that has never been more true among a number of my colleagues. Furniture is in, but a lot of it cannot be set up because I.T. and electric technicians are still doing their thing.
So it means work from home, or from venues with Wi-Fi. I have my pick of Panera (first choice), Bob Evans, McDonalds, Chipotle, Starbucks, Tim Hortons, and on and on.
The work goes on . . .
. . . No one likes change.
And that has never been more true among a number of my colleagues. Furniture is in, but a lot of it cannot be set up because I.T. and electric technicians are still doing their thing.
So it means work from home, or from venues with Wi-Fi. I have my pick of Panera (first choice), Bob Evans, McDonalds, Chipotle, Starbucks, Tim Hortons, and on and on.
The work goes on . . .
Subscribe to:
Posts (Atom)