Commercial Real Estate Finance

Posts Tagged ‘Economy’

Imagine two office buildings of equal size, quality, and leasable space, sitting right next to each other. As far as anyone is concerned, these properties are identical. Now, imagine their landlord sells both properties–but rakes in far more money for one building than for the other. Why would this happen?

Even if these properties are physically identical, there is one essential feature that counts toward an asset’s value more than anything else: tenants. Maybe–and this isn’t much of a stretch, coming out of the Recession–Building A is fully leased, while Building B is completely vacant? Even if these properties have the same capacity for revenue, the fully leased property is the only one with potential, much less certainty, of future income. It all comes down to which businesses and residents reside–or plan to reside–in a particular property.

A dilapidated shanty in the middle of Siberia could sell for 300/SF–if it had a long-term lease with Google.

Also important is the question of what other businesses are located in the area, since these help determine the financial strength of a potential tenant or buyer. For members of the real estate community–whether investors, developers, brokers, capital advisors, or pretty much anyone else–a property’s tenants and neighbors have an enormous influence in deals and decision-making. Up until this point, however, discovering detailed tenant information usually took a bit of digging.

Aziz Akin, an experienced analyst in Manhattan, believes his product can make tenant research significantly easier. This service, Buzzfile, is an online search platform that locates and identifies companies throughout the United States, providing results according to street address, company, industry, city, number of employees, and other specifics.  Read the rest of this entry »

Like the Top 10 list we looked at last Saturday, this one shouldn’t be read as a definitive ranking. The data behind this list comes from an Ernst & Young/EIU survey of European investors’ outlooks in early 2013. The numbers are available on page 10 of this PDF published by Ernst & Young. Here are the Top 10 European Markets by Anticipated Transaction Volume in 2013:

E&Y/EIU’s respondents answered the following question:

Do you agree with the following statement: overall, transaction volume in 2013 will exceed the levels seen in 2012.

10. Germany (Agree 19% / Disagree: 81%)

9. Belgium (20% / 80%)

8. Russia (33% / 67%)

7. France (35% / 65%)

6. Sweden (41% /  59%)

5. Netherlands (43% / 57%)

4. Ukraine (45% /55%)

3. United Kingdom (47% / 53%) Read the rest of this entry »

Looks like our readers and Bernanke are on the same page with this one…

See our previous polls here.

Following up on Wednesday’s Top 10 of Markets for New Retail Product, here’s a ranking of major retail markets according to their current recorded inventory. As before, this list is based on data from CoStar Group and Colliers’ 2013 Retail Outlook (click for the PDF). Here are the 10 Largest Retail Real Estate Markets in the U.S.:

10. Boston, MA (Reported inventory: 87,564,315 SF)

9. Tampa/St. Petersburg, FL (87,575,353)

8. New Jersey – Northern (92,198,983)

7. Phoenix, AZ (104,240,834)

6. Houston, TX (140,973,923) Read the rest of this entry »

Week in Review for March 30 – April 1:

- Improving home prices and a strengthening labor market suggest the U.S. economic recovery is gaining momentum. Some suggest it is time for the Fed to wind down its economic stimulus program through which it has purchased billions of dollars in securities to hold down interest rates. Others argue the Fed’s bond-buying should continue until the unemployment rate has fallen below 6.5%.

- Philadelphia-based multifamily operator Morgan Properties closes on $1.2 billion in refinancing for a portfolio of 73 properties. The refinancing, the largest in Morgan Properties’ history, was originated by Berkadia Commercial Mortgage, reports CoStar Group.  

- With the rejuvenation of many CRE markets and growing CMBS activity, buyers of higher-risk, B-rated bonds are showing increased appetite.

- The Libor scandal of the last couple years, which has triggered numerous lawsuits, investigations, and government inquiries, prompts some regulators to call for a new, more transparent benchmark for interest rates. Others, including the European Commission, hope to improve the current system, reports the New York Times.

- Philadelphia’s Equus Capital Partners announces the sale of a 330-unit student housing property in Chicago’s South Loop. The high-rise, sold for $58 million, serves Columbia College, Roosevelt University, and other Chicago schools. Equus Capital was previously known as BPG Properties, Ltd. Read the rest of this entry »

To merge or not to merge…

See our previous polls here.

Mark Morris

Partner

Fox Rothschild, LLP

Mark is an experienced real estate practitioner with a particular focus on representing clients in the hospitality industry. He routinely handles a broad range of real estate matters, including acquisitions, development, joint ventures, leasing and finance.

As co-chair of the firm’s Hospitality Practice, Mark serves as lead attorney in more than 30 transactions annually involving the sale, acquisition, development and management of full-service and limited-service hotels throughout the United States. He is skilled in the negotiation of franchise and management agreements and has worked closely with major franchise companies, such as Marriott, Choice and Hilton, in transitioning franchisees and resolving disputes.

A familiar face within the hospitality community, Mark has written and spoken on matters of interest to executives in the industry, as well as to shopping center owners and tenants. He has taught at the Institute for Paralegal Training in Philadelphia and lectured on commercial leasing topics to developers and retailers.

Mark’s leadership roles within the firm include serving as a member of the firm’s Executive Committee, managing partner of the firm’s Philadelphia office and former chair of the firm’s Real Estate Department.

In law school at Boston University, Mark received the Paul J. Liacos, Edward P. Hennessey, and G. Joseph Tauro scholarly designations.

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(This is Part Two of our interview. Click here for Part One!)

Q: Philadelphia’s office market has seen some challenges in recent years. What can be done to revive this asset type? Is the answer simply to convert office to something else (multifamily, etc.)?

It’s still a zero-sum game. There hasn’t been significant downtown construction in years. Even with limited space, there haven’t been enough projects to increase the value of that space. Right now, Philadelphia’s businesses are just trading places with each other, not absorbing more space. Many service-oriented businesses have downsized because of new technology and better efficiency, which drives down office demand. There aren’t many office-based businesses moving into the area, except to the Navy Yard, and to some extent demand driven by the universities and medical centers. Read the rest of this entry »

Who’s up for some graphs? Ryan Severino, Senior Economist at Reis, discusses conditions in the capital markets at the close of 2012, as well as expected CRE trends in 2013. Graphs aplenty!

 * Read the rest of this entry »

This ranking comes from Colliers’ 2013 retail report, which analyzes current fundamentals by both market and product type. You can see Colliers’ entire report on this PDF. In its “scorecard” section, you can also find Colliers’ outlook for grocery, restaurant, department store, auto, and hobby companies. Today, let’s look at America’s Top 10 Discount Retailers:

(Parentheses show growth according to each company’s most recent quarterly report)

10.Fred’s Super Dollar (down 2.5%)

9. Kohl’s (1.1%)

8. Walmart (1.5%)

7. Dollar General (1.6%)

6. Sam’s Club (2.7%)

5. DSW (4%)

4. Ross  (6%) Read the rest of this entry »

Continuing our series of Top 10′s focused on specific asset classes, here is our list of the Top 10 Industrial Markets in the U.S. This ranking, based on each city’s 2012 transaction volume, comes from Integra Realty Resources’ Viewpoint 2013.

10. Atlanta

9. Inland Empire

8. East Bay

7. Seattle

6. North Jersey

5. Boston

4. Dallas Read the rest of this entry »