Archive for February 2012
Motivated Seller BOV / BPO
Located in Beamont – Riverside County. 12 Unit multi-family building for sale. Mostly 2 BD / 1 BA. Great investment opportunity. Well maintained building; good neighborhood.
Michael Duhs- Managing Broker
Direct (949) 939-8352
30262 Crown Valley Parkway, Suite B518
Laguna Niguel, CA 92677
Commercial Real Estate Vacancy Rates Improve
According to the National Association of REALTORS®’ quarterly commercial real estate forecast, all of the major commercial real estate sectors are seeing improved fundamentals, but multifamily housing is becoming a landlord’s market, commanding bigger rent increases. These trends also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey.
Lawrence Yun, NAR chief economist, said vacancy rates are improving in all of the major commercial real estate sectors. “Sustained job creation is benefiting commercial real estate sectors by increasing demand for space,” he said. “Vacancy rates are steadily falling. Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest.”
NAR forecasts commercial vacancy rates over the next year to decline 0.4 percentage point in the office sector, 0.8 point in industrial real estate, 0.9 point in the retail sector and 0.2 percentage point in the multifamily rental market.
“Household formation appears to be rising from pent-up demand,” Yun said. “The tight apartment market should encourage more apartment construction. Otherwise, rent increases could further accelerate in the near-to-intermediate term.”
The Society of Industrial and Office REALTORS® shows a notable gain in its SIOR Commercial Real Estate Index, an attitudinal survey of 297 local market experts.
The SIOR index, measuring the impact of 10 variables, jumped 8.3 percentage points to 63.8 in the fourth quarter, following a gain of 0.6 percentage point in the third quarter. The index remains well below the level of 100 that represents a balanced marketplace, which was last seen in the third quarter of 2007.
Most market indicators posted advances in the fourth quarter, but 71 percent of respondents said leasing activity is below historic levels in their market — an improvement from 83 percent in the third quarter. Only 29 percent report there is ample sublease space available.
Office and industrial space remains a tenant’s market — 87 percent of participants feel that tenants are getting a range of benefits ranging from moderate concessions to deep rent discounts.
Construction activity is still low, with 95 percent of experts reporting it is below normal, and 83 percent said it is a buyers’ market for development acquisitions; prices are below construction costs in 78 percent of markets.
Participants are broadly expecting stronger conditions for the current quarter, with two out of three expecting market improvement.
NAR’s latest Commercial Real Estate Outlookoffers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.
Vacancy rates in the office sector are projected to fall from 16.4 percent in the current quarter to 16.0 percent in the first quarter of 2013.
The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5 percent; New York City, at 10.0 percent; and New Orleans, 12.4 percent.
After rising 1.6 percent in 2011, office rents should increase another 1.9 percent this year and 2.4 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year.
Industrial vacancy rates are likely to decline from 11.7 percent in the first quarter of this year to 10.9 percent in the first quarter of 2013.
The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.8 percent; Los Angeles, 4.9 percent; and Miami at 7.6 percent.
Annual industrial rent is expected to rise 1.8 percent in 2012 and 2.3 percent next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.
Retail vacancy rates are forecast to decline from 11.9 percent in the current quarter to 11.0 percent in the first quarter of 2013.
Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 5.1 percent; and Long Island, N.Y., at 5.4 percent.
Average retail rent should rise 0.7 percent this year and 1.2 percent in 2013. Net absorption of retail space is projected at 9.9 million square feet this year and 23.9 million in 2013.
The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.7 percent in the first quarter to 4.5 percent in the first quarter of 2013; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are New York City, 1.8 percent; Minneapolis and Portland, Ore., each at 2.5 percent; and San Jose, Calif., at 2.7 percent.
After rising 2.2 percent last year, average apartment rent is expected to increase 3.8 percent in 2012 and another 4.0 percent next.
For professional expertise with offices in Los Angeles, San Diego, Orange County, Riverside, and San Bernardino, Sacramento, San Francisco, Oakland, San Jose — commercial real estate, 1031 exchange, investment property, commercial real estate REO’s, apartments for sale, retail shopping centers for sale, offices for sale, industrial for sale, nationwide commercial BOV’s, nationwide commercial broker price opinion BPO’s, nationwide commercial BPO’s, or asset management, please contact Michael Duhs, Managing Director of East West Commercial, at Michael.Duhs@EastWestCommercial.com or (949) 939-8352. Visit us at http://www.EastWestCommercial.com.
Remember years ago when homeowners were selling high priced homes in the San Francisco Bay Area and moving in droves to the Sacramento region? Well, get ready for the next way!
A recent Bloomberg article suggests that San Francisco is currently the hottest office market in the country, as indicated by the pending sale of a 10-story office building for $800 per square foot in SOMA (South of Market Area), a submarket where rents are up 22% over the past year. This would be the City’s highest selling price for an office building since the commercial real estate market peaked in 2007.
Follow my logic here… Bay Area jobs are coming back in a big way, led by robust increases in the technology industry. Most of these young workers, in their 20’s and 30’s, are seeking multifamily rental housing. As a result, rental demand for apartments in cities like San Francisco and San Jose is going through the roof with 2012 forecasted vacancy rates of +/- 3%. Not surprisingly, Marcus & Millichap reports that San Jose and San Francisco have taken the # 1 and # 2 spots in the National Apartments Index, behind # 3 New York.
What follows next? Well, multifamily property values are on the rise in the Bay Area with compressing investor yields (cap rates), suggesting investors will soon be looking to nearby markets for better investment returns. Given the Sacramento area was hit so hard with housing foreclosures, many people have been forced to rent apartments, which is driving region-wide multifamily vacancies below 5% in 2012.
The number of new multifamily listings for apartments in the greater Sacramento is most certainly on the rise. Here on the ground, it feels like we may have it bottom late last year in terms of apartments sale price per unit. Demand should increase from here, along with upward pressure on both rents and sale prices.
To give you an idea… an 11 unit REO apartment complex sold in South Sacramento on 6/30/11 for $34,000 per unit to a value add investor at 9.9% cap rate. The property was 91% vacant at the time and in terrible physical condition. Over the next six months, the investor rehabbed units, replaced patio decks, painted the entire property, and leased up the 10 vacant units at market rents.
After a turnaround period of only six months, this property is now back on the market with an asking price of $67,000 per unit (8.1% cap rate). Notice this cap rate is even stronger than a recent sale just two blocks away, which closed on 11/1/11, where East West Commercial Real Estate brokered the sale of a stabilized 14-unit apartment property to a foreign investor at 8.5% cap rate ($62,500 per unit). See video.
All signs are positive that Sacramento has entered a period of slow steady growth with support from nearby Bay Area influences. Now is a great time to consider investing in multifamily housing and apartments for sale while prices are still attractive.
For more information, contact Brian Jacks (916) 837-3456, Vice President and Northern California Regional Director for East West Commercial. Brian specializes in investment sales for multifamily housing and apartments throughout the greater Sacramento area. He is also proud to announce the addition of several new commercial real estate agents in the Bay Area, serving commercial and multifamily investors, landlords and tenants in the cities of San Francisco, Walnut Creek and San Jose.
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East West Commercial – Professional commercial real estate expertise with offices in Sacramento, San Francisco, San Jose, Walnut Creek, Los Angeles, San Diego, Orange County, Riverside, and San Bernardino — commercial real estate, investment property, apartments for sale, office for sale, industrial for sale, retail shopping center for sale, 1031 exchange, commercial real estate REO’s, nationwide commercial BOV’s, nationwide commercial broker price opinion BPO’s, lender services, nationwide commercial BPO’s, asset management.
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Sacramento, CA – As one of the hardest hit regions in the country, due the housing meltdown, Sacramento area apartment owners have been welcoming displaced homeowners in droves. Apartment communities have long been the safest commercial real estate investment class, since people always need a place to live no matter how bad the economy…. but consider this next fact for even more emphasis. As of 3Q11, Sacramento metro vacancies were reported at 12.4% (retail), 12.9% (industrial), and 19.8% (office). On the other hand, Sacramento metro apartments were reported at only 5.4% vacancy during the same period… after falling from 7.1% a year prior (3Q10). Plus, due to the compressing vacancy rates, apartment owners have been able to increase rents an average of 2.2% over the past year. With all this positive news, which asset class would you prefer to own right now?
Article contributed by Brian Jacks http://www.linkedin.com/
Data Source: Marcus & Millichap 3Q11 market update http://www.marcusmillichap.com/
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Asset Management / REO Brokerage Services
For more than two decades we have provided extraordinary service to assist our clients in disposing of and purchasing real estate assets in the California marketplace. East West Commercial Real Estate specializes in assisting lenders sell their special assets / ORE across multiple asset classes: apartments, retail, office and industrial.
East West Commercial Real Estate is pleased to announce that Ryan Misaresh, LEED AP represented LD Entertainment in the lease of Class A office at Mani Brothers’ 9000 Sunset building in West Hollywood. LD leased 6,878 square feet, in a four year deal, which represents nearly a full floor of the building. After undergoing a recent full remodel, 9000 Sunset is positioned as one of the premier entertainment office buildings in the “Entertainment Capital of the World.” Possessing a strong understanding of LD Entertainment’s needs and dynamic business model was essential in finding the proper fit for this rapidly growing production and distribution company, whose recent releases include the blockbuster action film “The Grey” with Liam Neeson, as well as “Biutiful,” “I Love You Philip Morris,” and “The Collector.”
This top rate space with sweeping 270 degree views of the Los Angeles basin was a match made in heaven between LD’s rise to prominence which now warrants a top rate office environment, and a landlord in a position to provide it, with minimal TI’s, in the heart of the creative capitol of the world.
Built in 1963 and featuring 144,802 square feet, 9000 Sunset is owned and managed by Mani Brothers and was represented by Greg Camacho of Camacho Commercial.
Ryan Misaresh is a Los Angeles commercial real estate broker specializing in lease and investment transactions for retail, shopping centers, multi-family and mixed use properties. Mr. Misaresh is part of the firm East West Commercial Real Estate, a commercial real estate services company with offices throughout California including, Los Angeles, San Francisco, San Diego, San Jose, Orange County, San Jose, Sacramento, Oakland, and Walnut Creek. East West Commercial Real Estate provides brokerage and asset management services for retail, shopping centers, office, industrial, apartments, medical office, self storage, senior housing, and hospitality. For more information, contact Ryan Misaresh at 213-309-3279 or Ryan.Misaresh@EastWestCommercial.com or http://www.eastwestcommercial.com/
www.REIClub.com – What Is Commercial Real Estate Investing? Here’s A Quick Video On The Many Types of Investments And Their Benefits. Hi, this isFrank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got quick video on the many types of commercial real estate and some quick benefits to each. TYPES OF COMMERCIAL REAL ESTATE – Multi-Family Apartment Buildings – Self Storage – Mobile Home Parks – Retail Space – Office Buildings – Industrial, Manufacturing and Warehouses – Land Development – Hotels and Resorts – Health Care Facilities DIFFERENCES BETWEEN COMMERCIAL AND RESIDENTIAL – VALUATION – Residential: Purchase – land value and property value, Rent – FMR – determined by area – Commercial: Purchase – determined by income potential, Rents are determined by $/sq.ft, demand vs. supply – FINANCING – Residential: Smaller deposit, 100% loan to purchase, lower rates, but not as easy to get seller financing – Commercial: 30% deposit, higher rates, but better chance of leveraging – seller financing or using OPM. – RENTAL COMMITMENT – Residential: 1 year with option to renew, tenant quality fluctuates, vacancies hurt – Commercial: 3-20 Years, annual rent increase, better tenants, more flexibility with vacancy – MANAGEMENT – Residential: Most of the time YOU are the manager, time consuming, not budgeted for management – Commercial: Property management expenses built right into the valuation of property, professional companies to manage the building …
Bank Owned / REO Commercial Real Estate Land, Orange County, CA
This Bank Owned / REO 5,040 square foot available parcel is rectangular shape. Various commercial real estate uses — retail , shopping center, office uses. The land benefits from approximately 42′ of frontage along West 1st Street, and approximately 118 feet on North C Street. First Street is a major commercial thoroughfare in Tustin which is close to the 55 Freeway and Interstate 5.
The land is flat and is ready for development.
155 West 1st Street Tustin, CA 92780
Northeast Corner of West First Street and North C Street
In the hub of business activity for the City of Tustin
Close proximity to Freeways 5, 55, 22, 57
Within 10 minutes to County of Orange offices and the Anaheim / Irvine Business and Industrial districts