Commercial Real Estate Finance

Archive for the ‘Niche Property Types’ Category

We rarely do a post about parking garages, though it is an asset class we are familiar with, and have worked on to obtain financing on behalf of our clients.  Many people live in the suburbs and commute to work.  On days in which they may have client meetings, they have to drive downtown, and ostensibly find a safe place to park their car.  This generally means finding an acceptable parking garage that is close to your destination but that also won’t burn a hole in your pocket.  With that said, here are the top ten most expensive median monthly parking rates in global financial centers.You might want to avoid working in, or even visiting these places after reading this…unless you have a company card of course.

Singapore

10. Singapore - $192.89

9. Dubai - $240.00
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Baron Hanson is the principal and lead consultant for RedBaron Consulting and Goal Line PR, a branding, strategy, and turnaround management firm based in Charleston, South Carolina. Hanson completed undergraduate and graduate studies at Harvard University, which included real estate finance and urban planning coursework. Goal Line PR recently launched OpenPop-UpShops.com, a global SSL website project linking CRE executives with Pop-Up Shop tenants and big-box retailers worldwide. He can be reached via Baron@OpenPop-UpShops.com, and @openpopupshops via Twitter and Facebook.

About a year ago, we wrote on the phenomenon of the Pop-Up Shop. We referred to it as a new phenomenon, when really it is anything but. Thanksgiving pumpkins and Christmas trees are sold via temporary roadside stands each year like clockwork. Concert memorabilia, event concessions, and even fireworks are sold via temporary tables, tents, or trailers. Vendors pop-up shop and close down according to event demand. In fact, The Super Bowl is one gigantic Pop-Up Shop. It lasts about three weeks all-in inside a different retail venue each year. The Masters Tournament is a seven-day Pop-Up Shop, only this store is held inside the same historic venue in perpetuity. Weddings are perhaps the second most profitable one-day-only Pop-Up Shops in history. Election Day precincts are of course number one. At this juncture in CRE history, it is time to apply the timeless idea of Pop-Up retail to appropriate empty spaces. Read the rest of this entry »

A “desert island” is one that is uninhabited by humans.  Usually this is because it hasn’t been discovered yet, the terrain is too tough to develop, or it is simply is too far away from a mainland to realistically support an economy. But what happens when islands that are created nearby a mainland for the sole purpose of development and occupancy by humans goes indefinitely uninhabited?  Perhaps those qualify as ‘deserted desert islands’. And if you want the scenic view of the economic crisis, deserted desert islands might be the place to start.  While Florida might provide you with some (oily) sand, vacant shoreline buildings, and some stalled beachfront developments, it is nothing compared to the picture above. That picture is of “The World,” a cluster of man-made islands off the coast of Dubai.  Read the rest of this entry »

Between sitting in front of computers all day at the office, smart phones glued to our hands, and now the iPad adding a whole new means for accessing media, our lives have literally gone digital.  For most businesses our constant access to the internet has been a godsend and I wouldn’t claim that this isn’t the case for commercial real estate as a whole, but for the retail sector this hasn’t necessarily been the case. Read the rest of this entry »

Most real estate professionals operate in a particular asset class because it is the one they know best.  Whether they happen to have been exposed to it first, or cut their teeth on it through experience, it seems to hold true.  But lets be objective here for a moment.  After having suffered what seems to be the worst of the economic downturn, and its subsequent impact on all types of commercial real estate, we sit in a very unique spot in terms of being able to assess which asset class is the most recession proof.  Let’s take a look at a few of the top candidates: Read the rest of this entry »

In a recent article in the Wall Street Journal it is suggested that while malls and office parks have suffered from the real estate swoon that has been talked to death at this point, there is a sector of commercial real estate that really has not been hit all that hard.  And it isn’t some niche asset class like medical office buildings or student housing, but rather a class of commercial assets defined by their lease structure, rather that the type of tenant they house. Read the rest of this entry »

As the economy tanked and left most of us twiddling our thumbs, big football schools such as Texas and Louisiana State University bet their on-field accomplishments would translate into increases in operating revenue, and boy were they right.  They bet big in real estate by building out their stadiums and the returns on investment taste almost as good as a national championship.

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Regardless of where you live in the United States, one thing is likely true.  There is a highway, bridge, state road or some other modicum of vehicular transportation in disrepair.  After suffering through one of the worst (in terms of snowfall and damage) winters in the Mid-Atlantic’s history, those potholes, sinkholes, bathtubholes and entire-kitchen-holes are getting greater in number.  The bottom line is that the United States’ aging infrastructure is in need of massive repair.

So how do we go about fixing this problem? A private equity fund may have to buy our bridges and invest ongoing capex in them, lest they become Palin-esque and lead to nowhere. Read the rest of this entry »

In times like these, savvy real estate owners all sing a similar tune.  Why build when you can buy for half the cost (or at least significantly below replacement cost)?  And this is a good question.  Yet despite the cyclical nature of real estate, land is bought and sold at all times during the cycle. And this got us to thinking.  If an asset like land, which by nature does not produce income, can continue to change hands, then what are the real drivers of modeling a land deal? How speculative is it really?

That got us thinking even more (we try not to think too much… it makes us tired) about other similar markets for assets of a speculatively priced nature.  Fine art is one particular commodity/asset class that comes to mind. So let’s examine the similarities and differences between pricing for raw land in the realm of real estate, and the pricing of fine art in the world of the aristocrat. Read the rest of this entry »

I’ve become increasingly interested in agricultural investments. Although Farmland makes up only about 1% of institutional real estate investments, it is an asset class that has strong fundamentals. According to research by UBS Agrivest[1], agriculture investments provide:

- Competitive returns with a strong income component

- Low return variability

- Diversification benefits

- Effective hedge against inflation

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