U.S. Commercial Property Prices Fell for Second Straight Month in January

March 30, 2011

U.S. Commercial Property Prices Fell for Second Straight Month in January

U.S. commercial property prices slipped for the second straight month in January, as distressed real estate sales weighed on values, according to Moody’s Investors Service.

The Moody’s/REAL Commercial Property Price Index slumped 1.2 percent from the previous month and 4.3 percent from a year earlier. It’s up 4.2 percent from an eight-year low in August, Moody’s said in a statement today.

The U.S. economy grew at a 2.8 percent annual rate in the fourth quarter, helping boost demand for office, retail and industrial space and apartments. Price increases are being held back by the number of distressed properties on the market, said Christopher Cornell, an economist at Moody’s Analytics Inc. in West Chester, Pennsylvania.

“Choppiness in the CPPI is starting to subside as the bottoming process” that started in the fourth quarter of 2009 continues, Tad Philipp, director of commercial real estate research at Moody’s, said in the statement. “However, some choppiness will remain as the share of distressed transactions continues to be elevated.”

During the commercial real estate boom, many investors bought property with high levels of debt. The recession led to rising vacancies and falling values, making it difficult for landlords to refinance. The delinquency rate on loans packaged and sold in commercial mortgage-backed securities rose to a record 9.2 percent in February, according to a March 15 report by Moody’s.

‘Slack in Supply’

“Most demand drivers for commercial real estate have reached bottom, including office-using employment,” Cornell said in a telephone interview before the report was issued. “The underlying demand for commercial real estate has begun its turnaround, but you’re not going to see much price appreciation until the slack in supply is taken up.”

Investors are becoming more confident about buying commercial property as the economy grows, according to a survey conducted by PricewaterhouseCoopers LLP’s New York-based unit.

“Signs of recovery are boosting optimism among owners and buyers for 2011,” said the report released yesterday. “The pace at which the U.S. economy is improving, however, has been slow and uneven at best.”

Investment-Grade Properties

Prices for investment-grade properties in the U.S. fell 1.1 percent in January from the previous month, CoStar Group Inc., a real estate data service based in Washington, said March 9. Valueswere up 11 percent from January 2010 and down 33 percent from the peak in June 2007, according to the company.

CoStar, unlike Moody’s, tracks transactions of less than $2.5 million. CoStar also limits its index to class A and B offices, the highest-quality buildings; retail and industrial properties built since 1990; and multifamily buildings of 30 units or more.

Commercial property values rose 1 percent in February compared with the previous month and 20 percent from a year earlier, Green Street Advisors, a real estate research company in Newport Beach, California, said March 4. Prices are down 17 percent from the August 2007 peak.

Green Street’s index includes deals that are in negotiation or under contract, while Moody’s tracks completed sales.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Source: www.bloomberg.com

By: Brian Louis – Mar 22, 2011 10:47 AM ET

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Commercial Real Estate Debt Levels Fall — Again

March 18, 2011

Commercial Real Estate Debt Levels Fall — Again

Mortgage Bankers AssociationThe level of commercial mortgage debt fell by $12.1 billion during the last three months of 2010, marking the fifth straight quarter that the amount of debt backing commercial real estate has fallen, according to data released Thursday by the Mortgage Bankers Association.

In all, there was $2.4 trillion in commercial mortgage debt outstanding — sitting on the books of everything from banks to insurance companies to holders of commercial mortgage backed securities — at the end of the year, the MBA said.

Debt Forecast

While the level declined, it fell by the lowest amount since the end of the third quarter in 2009 as banks began to wade back into the lending world. Still, it’s hard to think that overall debt will grow any time soon, with countless properties holding outsized billions upon billions of loans made in 2006 and 2007. As those loans come due or are worked out, their debt loads tend to shrink.

Commercial real estate debt is a broad category that includes mortgages tied to office space, hotels, apartments, retail and industrial property. Broken down, the amount of multifamily lending actually increased by $3 billion — the second straight quarter that it grew — as U.S.-backed Fannie Mae and Freddie Mac enlarged their portfolios.

Source:  The Wall Street Journal

By: Eliot Brown

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What To Consider To Have The Best Florida Commercial Real Estate Property

March 14, 2011

What To Consider To Have The Best Florida Commercial Real Estate Property

Normally, if you are trying to set up your new business, Florida would be the best place. If you are planning to put up your new business, expert says that you are required to have the right Florida commercial real estate property.

This would serve as your foundation for your business. The building will serve as your existence in the local market and you should consider getting the right one to guarantee a steady cash flow of profit and success that marks a productive venture.

There are hundreds of Florida commercial real estate properties that are available for your business. But of course it is very important to pick the best property in the market that perfectly fits your budget, as well as your venture.

Good location

Location should be your vital concern when looking for the right Florida commercial real estate property for your business in the city. You have to try doing feasibility study and observe the different city and areas in Florida with potential of having more market for your [products and services.

Aside from the number of consumers, it is also important to consider the accessibility of your business to your potential market. It should be located in a place where there is a ready access to transportation and routes to make it accessible to the local and international consumer. You have to consider the trade routes and potentials delivery method to the local especially if you are dealing with the production and distribution business.

Determine the features and attributes of the commercial real estate property

Entrepreneurs should always consider picking the Florida commercial real estate property with facilities and features that perfectly fits with the operation of your business. When searching for the right commercial property, you have to personally check on the facilities that is included in the area, as well as other features like the interior and exterior facilities, divisions, floor plan and layout and so on.

Online search of the Florida commercial real estate property can be a good start n since you do not have to allot most of your time in making the search. All you have to do is visit different real estate sites s on the internet that showcases these commercial properties. These sites usually provide complete descriptions on the property so that you will be able to get an overview about the property. This will help you determine if the property perfectly fits your business or not.

There may be times that the investor could not make their own decision about the Florida commercial real estate that they are planning to acquire. And they are usually afraid of d making a decision because they are not quite sure if they are making the right move or not. And because of this it would be best they will hire a real estate agent that will aid them in buying the right commercial property. The realtor can help you in deciding what is best for you.

Source: stockmarketsreview.com

By: Ella Ayson

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