That's right! There is finally significant market activity for midsize office buildings, apartment buildings and portions of warehouse market. We have been fortunate to get some agreements for office leases, with proposals on others. Offers are being made on apartment buildings, multifamily and warehouses.We hope to announce an interesting, and for the owner, sale of a warehouse in the near future. As always, price is the driving factor, and cash will continue to be king for smaller commercial properties, as the credit market still remains inhospitable for the small investor. For more information on the current state of the commercial real estate market and commercial and investment opportunities visit our website www.floridacommercialteam.com .
Monday, November 1, 2010
Wednesday, September 29, 2010
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The Florida Commercial Team' Perspective on the Commercial Real Estate Market While the news from many quarters concerning the current state of the commercial real estate market is unsettling, the opportunity for savvy investors of commercial property has never been better. Discounted property pricing of 15 to 30% is not uncommon for distressed properties. For those investors with captial to invest, local lenders are prepared to lend under the traditional lending guidlines that existed before the latest price run up on commercial properties. Patience will be rewarded for the commercial real estate investor who has the willingness to ride out the current down market. If you are an investor wanting to take advantage of this market, you are asking yourself what and where are the best real estate opportunities? The Florida Commercial Team, with over 45 years of real estate experience in South Florida real estate, provides their clients experience,personal service and innovative real estate solutions to assist investors in making the best possible real estate investments.
Wednesday, July 28, 2010
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| Is Commercial Real Estate Bouncing Back? |
| By Ruchika Tulshyan |
| TIME |
| July 12, 2010 |
| Commercial real estate is showing signs of a market bottom, says Mike Kirby, chairman of Green Street Advisors, a Real Estate Investment Trust (REIT) research firm. Kirby tells TIME which parts of the market are turning up and who's doing the buying. You've said commercial property values are up 20% from the lows. Other reports say we're still down 40%. So where are we, really? Our view on property pricing differs from conventional wisdom. Some other indexes, published by Moody's and MIT, show that property prices went down 40% and that they've generally stayed there. But we show they're now down 25% from their peak. The reason for the difference is that their indices track transactions — ours tracks deals that haven't yet closed. It takes an awful long time for their index to capture the essence of the news going on in the market right now. Buyers and sellers of commercial property are striking handshakes at prices that are substantially above where deals are closing, and that's part of what's missing from other indices. (See pictures of retailers that have gone out of business.) Are all regions bouncing back? Manhattan and Washington, D.C., in particular, have had very robust increases in value. Everyplace else, it's been weaker. And that's probably the defining differential. Manhattan took a bigger hit, so it had further to bounce back. Some of the buying activity has been foreign, and they typically flock to those two markets first. We're also seeing some activity in San Francisco and Boston, but not to the extent we've seen in the other two. Where's the foreign money coming from? It's mainly Arab money. They've been the main source so far. The German syndicators [i.e., investment pools] are back in business. They've been toeing around the market. There's also been interest from sovereign wealth funds of all stripes. But particularly it's Middle Eastern money. What about the nagging worry that commercial real estate is the next crisis? This whole premise that commercial real estate is "the next shoe to drop" is overstated. Clearly, we have problems, since there are many mortgages out there that were underwritten using very aggressive assumptions, and those will be difficult to refinance. But the good news is, if you look at our property index, we're back to 2005 pricing. So that means that most properties that were financed in '04 and '05 are not going to be much of a challenge to get refinanced. And, yes, the '06 and '07 deals, which some indices say are still underwater, will also need to be recapitalized. The good news is, there's a very long line of capital sources that have shown up in the last nine months that are ready, willing and able to play that role. (See pictures of Americans in their homes.) But weren't there some really bad deals? Pretty much anything Blackstone sold at the peak out of its equity-office portfolio. Then there was the Archstone deal — the privatization of a blue-chip REIT at a very rich price — that did a huge amount of damage to Lehman Brothers and Tishman Speyer. There's no shortage of headlines saying, "Boy, can you believe how stupid that deal was?" but I think in general everybody's taken a small hit but nobody's bleeding too badly. (Comment on this story.) What types of properties are rebounding? The biggest increases in value are the same sectors that had the biggest decreases in value. Hotels went down the most, offices went down the second most, and those rebounded the most. Apartments got hit the least, and malls didn't get hit too terribly hard, and their rebounds have been smaller. Even with the rebound, hotel and office land investors will continue to feel the pain over the next three to four years, more than apartment land investors. (See 10 big recession surprises.) How is the rental market? You're still seeing problems in terms of vacancy rates and stagnant rental rates. But the important thing is that a recovery is visible. It may take a while to play out — real estate does tend to lag the economy, but there are positive developments. The primary driver for real estate value is the low return requirements everywhere else. So a year ago, corporate-bond yields dropped from 9% to 6%. Real estate returns are now in their mid-sevens. It's the drop in bond-market returns that makes real estate look pretty darn good right now. So it's a good time to invest now? You get a decent return, and you're buying at the bottom of the cycle. Real estate being a historically cyclical animal, you know, it's not going to be a good year next year, or even the year after — the cash flows are going to stink — but eventually, what has gone down comes back up. So we're sitting at a historically low occupancy and rental rates, but barring a double dip, there's only one way to go. |
Thursday, July 8, 2010
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30,000 SQUARE FOOT WAREHOUSE SOLD. An all cash purchase of a Hialeah warehouse has just sold in West Hialeah for $605,000. It was originally listed for $995,000. There were more than five cash offers for the 1965 warehouse located at 2755 W 8 Ave. The warehouse was used for 35 years as a dyeing factory. The lot size was 40,000 square feet.
Paul Silverstein, Broker-Vice President, Commercial Division with RE/MAX Advance Realty, who represented the seller, had received numerous offers for the property within the first 10 days of placing it on the market. “ Local and international investors are keeping a close eye on the South Florida commercial market and are ready to pounce on any property that is perceived to be under the current market value” he said. “The offers that came in were from Brazilian, Ecuadorean and Columbian buyers, but it was a local investor that ended up with the property.”
Tuesday, July 6, 2010
The Upside of the Downside!
A commercial real estate price index, developed by the Massachusetts Institute of Technology Center for Real Estate (MIT/CRE), posted a staggering 18.1 percent drop in the second quarter. The index, which collects commercial real estate purchase and sales data from leading real estate firms, is now down 22 percent for the year and 39 percent from its peak in Q2 2007. The information was released by MIT/CRE Monday to the dismay of commercial property investors nationwide.
These numbers do not bode well for owners of income producing buildings who may need to refinance soon. Shrinking valuations will make it harder for buildings to qualify for institutional financing in this tight credit environment. Banks have significantly decreased their loan-to-value ratios (LTV) as a result of the credit squeeze and the unpredictable markets. The combination of tighter lending criteria and lower appraisals will result in a large number of buildings that will fail to get refinanced.
This is a half a trillion dollar problem and the government can offer only nominal assistance; the public has no more appetite for bail-outs. The situation is dire indeed; investors are left hoping for a rebound that they know won’t come.
All the bad news, however, is a harbinger of good news. The very best financial professionals know that pessimism is a bullish indicator. A market bottom, by definition, is the moment of maximum pessimism.
The sheer magnitude and the incredible speed of the price declines could be an indication that sellers have capitulated and now believe that getting out is more important than getting their price. It is worth noting that the 18.1 percent drop reported by MIT/CRE is the steepest in the 25 year history of the index and that the peak to trough decline of 39 percent is considerably worse than the 27 percent decrease reported during the last great commercial real estate meltdown in the 1980s. Further, the commercial property collapse has now eclipsed the downturn in residential real estate which is off 30 percent from its highs. The best bad news of all, however, is that the supply side index of prices sellers would be willing to accept plummeted 18.5 percent to a new record low. Who could be blamed for considering that number a white flag of surrender?
Predicting a bottom is a fool’s errand but it would be equally foolish not to watch for signs of recovery. Hidden and overshadowed by all the bad news in the report is the fact that sales actually picked up over the last 3 months. Transaction volume showed a nice increase in the 2nd quarter, the first such up-tick in nearly 14 months.
I don’t know when the turn around will happen, but I do know that a predominantly bearish sentiment is a bullish indicator and that just because something is counterintuitive doesn’t mean it’s wrong.
Saturday, May 1, 2010
Green Construction promotes efficiency
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America’s buildings and infrastructure would become more efficient – reducing greenhouse gas emissions and cutting energy consumption – if a plan outlined by the Associated General Contractors of America is adopted, the organization claims.
The plan outlines measures designed to increase demand for green projects and infrastructure capacity and improve building efficiency and green construction practices.
“Green construction holds the promise of delivering some of the most sweeping environmental improvements our country has ever experienced,” said David D’Hondt, executive vice president of the association’s Washington state chapter, in a news release. “The reality is that you can’t simply wish for a greener future, you have to build it.”
The plan identifies things that public officials, developers and the construction community must do to lessen the impact of construction on the environment. They include: doubling existing energy efficiency tax credits for commercial buildings, passing the Building Star program that invests $6 billion in improving the efficiency of commercial buildings this year, and speeding up reviews and boosting local tax credits for green building projects.
The chapter unveiled the plan during a tour of construction of a green building in Seattle, which will serve as incubator space for startup green construction technology firms.
D’Hondt noted that new city-by-city construction employment figures, released Thursday, show just how much those new opportunities are needed.
Nationwide, 310 metropolitan areas lost construction jobs, including those in the tri-county area.
Between March 2009 and March 2010, Fort Lauderdale lost 8,400 construction jobs, a 21 percent drop. Miami lost 6,000, falling 15 percent to 39,600 from 33,600 jobs.
West Palm Beach fell 21 percent, to 22,900 from 29,100 jobs.
Read more: AGCA: Green building plan would create jobs - South Florida Business Journal:
Wednesday, March 24, 2010
PAUL SILVERSTEIN NAMED 2009 TOP COMMERCIAL
PAUL SILVERSTEIN NAMED 2009 TOP COMMERCIAL
REAL ESTATE BROKER IN FLORIDA
March 2010 - RE/MAX INTERNATIONAL honors Paul Silverstein as Top Commercial Agent with the most commissions earned on commercial real estate transactions for 2009.
Mr. Silverstein has been a commercial agent for more than 30 years and represents a national and international clientele. He is currently the Broker-Vice President, Commercial Division with RE/MAX Advance Realty.
“Last year was a challenging time for the commercial real estate industry,” said Anthony Askowitz, Owner of RE/MAX Advance Realty. “The fact that Paul was able to thrive in that market is a tribute to his abilities as a realtor and the quality of the relationships he has with his clients.”
Mr. Silverstein is a member of the Master Broker’s Forum and recipient of several prestigious awards, including the Platinum Club, 100% Club, Executive Club & Lifetime Achievement Award, and is Green Certified by the United States Building Council (USBC).
According to Mr. Silverstein, “I attribute my success to both hard work and a strong internet presence.” His website, (floridacommecialteam.com), Facebook & Linked-In profiles have all generated leads that led to listings and sales.
For more information please contact Paul Silverstein at 305-794-9773 or email him at paul@floridacommercialteam.com.
Top Commercial Realtor for 2009
PAUL SILVERSTEIN NAMED 2009 TOP COMMERCIAL
REAL ESTATE BROKER IN FLORIDA
March 2010 - RE/MAX INTERNATIONAL honors Paul Silverstein as Top Commercial Agent with the most commissions earned on commercial real estate transactions for 2009.
Mr. Silverstein has been a commercial agent for more than 30 years and represents a national and international clientele. He is currently the Broker-Vice President, Commercial Division with RE/MAX Advance Realty.
“Last year was a challenging time for the commercial real estate industry,” said Anthony Askowitz, Owner of RE/MAX Advance Realty. “The fact that Paul was able to thrive in that market is a tribute to his abilities as a realtor and the quality of the relationships he has with his clients.”
Mr. Silverstein is a member of the Master Broker’s Forum and recipient of several prestigious awards, including the Platinum Club, 100% Club, Executive Club & Lifetime Achievement Award, and is Green Certified by the United States Building Council (USBC).
According to Mr. Silverstein, “I attribute my success to both hard work and a strong internet presence.” His website, (floridacommecialteam.com), Facebook & Linked-In profiles have all generated leads that led to listings and sales.
For more information please contact Paul Silverstein at 305-794-9773 or email him at
Friday, January 29, 2010
THE FUTURE LOOKS UP
- National recession focused on households and banks
- Soft housing markets limit migration into Florida 2010
- Broken nest eggs
- Hometown Democracy
- Improving migration trends
- Stronger housing markets
- Higher rates limit the expansion
- Average annual population growth 200,000 +/- 50,000 depending on business cycle
Thursday, January 14, 2010
Small and regional banks remain most vulnerable to deeply troubled commercial real estate.
Small and regional banks remain most vulnerable to deeply troubled commercial real estate.
The commercial real estate sector is currently under the greatest stress since the CRE crash in the early 1990s. Following its normal pattern of lagging the residential housing cycle by approximately one year, the CRE sector peaked toward the end of 2007. Since then CRE prices have plunged by approximately 35%.