Get Adobe Flash player
Archives

Shopping Centers

Los Angeles County apartment market will gain traction as rehiring efforts boost rental household formation and completions. Los Angeles Apartment Sales will pick up.

Cap rates were pushed down for Class A and well-located Class B product to 6-percent range. Cap rates for assets with some level of distress and located in perimeter areas will average above 7 percent in the early part of 2011.

2011 Market Outlook

· 2011 NAI Rank: 11, Up 2 Places. Los Angeles into the top 10 apartment market.

· Employment Forecast: 1.5% gain.

· Vacancy Forecast: 4.4 % this year.

· Rent Forecast: Rents will advance 2.7%.

For investment sales information with commercial real estate in Los Angeles, San Diego, Orange County, Riverside, San Bernardino — Apartments for Sale, investment property, commercial REO’s, commercial bpo’s, commercial bov’s, and commercial broker price opinions, please contact Michael Duhs, Managing Director of East West Commercial at www.EastWestCommercial.com or (949) 939-8352.

As Reported by Marcus & Millichap in the 2011 Annual Report.

Share

Inland Empire apartment operations will strengthen in 2011 as payroll expansion resumes and the pace of new construction remains constrained. Job gains will become a primary driver of renter demand growth. Total employment will post net gains for the first time since 2006, and occupancies will continue to rise, led by strong absorption.

Apartment Investment activity in the region will continue to improve in 2011 as long-term hold buyers purchase bank-owned assets. Opportunities to acquire REO listings and value-add properties will remain prevalent. Cap rates for these assets will average in the mid-7 percent to low-8 percent range this year. Demand for assets closer to Los Angeles County employment centers will outstrip supply.

2011 Market Outlook

· 2011 National Rank: 32, Up 5 Places. Inland Empire kept the market in the bottom 1/3 of the ranking.

· Employment Forecast: Total employment in the two-county region will expand by 1.5%.

· Vacancy Forecast: Average vacancy rate will fall approximately 100 basis points this year to 7%.

· Rent Forecast: Effective rents will increase 2.2%.

· Investment Forecast: Although REO and top-tier deals will dominate sales this year, some unique opportunities will emerge.

For investment sales information with commercial real estate in Los Angeles, San Diego, Orange County, Riverside, San Bernardino — Apartments for Sale, investment property, commercial REO’s, commercial bpo’s, commercial bov’s, and commercial broker price opinions, please contact Michael Duhs, Managing Director of East West Commercial at www.EastWestCommercial.com or (949) 939-8352.

As Reported by Marcus & Millichap in the 2011 Annual Report.

Share

As Reported by Trepp

Defaults on commercial real estate loans are beginning to play a larger role in the failure of FDIC-insured institutions than construction loans, according to Trepp LLC.

Six banks closed by the government on Friday – three of which were in Georgia — had $152 million of nonperforming loans, 44% of which were CRE mortgages. Roughly 37% of the NPLs were construction loans.

“We have seen a shift over the last several quarters with commercial mortgages contributing to a larger portion of the distress” said Matt Anderson of Foresight Analytics and a resident CRE expert at Trepp.

The failure of the six banks brings the total for this year up to 125. Last year the Federal Deposit Insurance Corp. closed 140 bank institutions.

As of June 30, banks and thrifts held $1.01 trillion of CRE loans (not including multifamily loans) on their books with 4.28% considered  seriously delinquent, up from 2.89% a year ago, according to FDIC figures.

Banks also held $383 billion of construction and development loans with  16.9 % considered seriously delinquent (90-days or more past due), compared to 13.5% a year ago.

Meanwhile, FDIC has 829 banks with $403 billion in assets on its “problem” list.

_________________________________

For professional expertise with Los Angeles, San Diego, Orange County, Riverside, and San Bernardino — commercial real estate, investment property, commercial REO’s, commercial BOV’s, commercial broker price opinion 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.

Share

U.S. Office Vacancy Analysis 2nd Qtr 2010 (http://www.socalofficerealestateblog.com)

Decreased Office Rents Spur Orange County Market

According to the OC Register article dated August 15, 2010,“Rent Cuts Inject Life into Market”, Erika Chavez reports that the Orange County commercial real estate market has been hit hard especially for the first two quarters of 2010. Office vacancy rates have increased from 18.2% from the 1st quarter to 18.4% in the 2nd quarter.

Businesses aggressively signed leases for a reported additional 200,000 square feet causing these elevated vacancy rates for the 2nd quarter. Last year, the average asking rent was estimated at $2.30 per square foot whereas today, it falls right at $2.06 per square foot. Despite the heavy economical blow, the Orange County rental market has seen a glimpse of hope on the horizon.

Landlords are now offering extensive cuts on rent just to entice a steady stream of customers. Businesses are taking advantage of these rent cuts and seeing the potential opportunity for growth and expansion while it is still affordable.

Office Vacancy Rates Remain High Nationwide

Even though renters are eager, the nationwide vacancy rate rose 3.4 percentage points in the last year. Orange County is 4th in the category of most aggressive rent cuts. Leading the nation in rent cuts for the year is Phoenix up 4.2 percentage points, Palm Beach, FL, up 4 percentage points, and Fairfield, Conn, up 3.5 percentage points. Reports have stated that in Orange County office rents have fallen by 1.5% between the 1st and 2nd quarters of this year. These OC cuts are the most drastic by big landlords amongst the 82 nationwide markets surveyed. After 2nd quarter reports came in, Orange County had 20.7% of vacant office space.

On a nationwide scale, these astronomical vacancies have risen for a 10th consecutive quarter which has not been seen by our country for over 17 years. It is going to take a while to see any changes in this bleak market. Landlords are hoping to entice renters with discounted rent rates; however, it will take a lot more than discounted rate to turn the Orange County commercial market around.

__________________________________________________________

For assistance with Commercial Real Estate — investment sales, asset management, commercial REO, commercial BOV’s, commercial broker price opinion. Contact Michael Duhs, Managing Director of East West Commercial at Michael.Duhs@EastWestCommercial.com or http://www.EastWestCommercial.com or (949) 939-8352.

Share

2009-2011

Share


inflation.us What will happen to vacant commercial buildings as the economy begins to unwind? The Answer is right in front of my eyes. They will be destroyed.

Share