Posted by Donald Teel – Arizona Commercial
In today’s commercial investment environment, property taxes can be lethal. Many investors are still paying property taxes that are reflective of the market run-up of 2000-2006 and not necessarily on the current valuations of their investments.
The questions are what can you do about inflated tax valuations, where do you turn and more importantly, how can investors challenge property tax values successfully?
Continue reading “Challenging Property Tax Values”
Donald Teel
The notion of buyer’s market or seller’s market is a real phenomenon in any form of real estate investment.
Seldom can it be said that the market is both a ‘buyers’ and a ’seller’ market simultaneously. But this seems the case as we prepare to enter the second half of the 2009 commercial market.
Pinching down on Buyers is the absence of simplified capital lending, something necessary to their investment strategies. Sellers are experiencing what I call “refi shock” as banks tighten their rules for lending qualification in the wake of declining property values.
The conundrum is realized as buyers and sellers are forced to work in a market that favors both. The conundrum is one of uniquely creative transaction partnerships, where neither the buyer nor the seller can pop the cork on a Champaign bottle and light-up a victory cigar.
The Buyer vs. Seller Conundrum
This paradox of market realities or, clash of interests, is actually a moment of investment opportunities where banks can become the third party servants to buyers and sellers.
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President Barack Obama
Many experts are predicting further declines in commercial property values and performance, at least through 2009 and some are looking for recovery as late as the fourth quarter of 2010.
The Obama Administration has been funneling billions of dollars into lending institutions and dedicating billions more to the housing industry and its hoped-for recovery. This begs the question, is the President ignoring the problems now surfacing in the commercial property sector of the economy?
The short answer is yes. The longer and more complicated explanation may lie in understanding the fundamentals of the lending and insurance industries as they are the prime note holders and owners of much of the nation’s commercial real estate.
Although commercial property value declines are now underway in almost every property category, lending institutions may be free to use TARP and other funds to shore up the ailing commercial market.
A high percentage of commercial real estate owners (estimates are between 40% and 80%) will find refinancing difficult from 2009 through 2012 as 3 and 5 year note calls begin to kick-in and owners face a new set of qualifying requirements designed to reduce lender risks in commercial property lending.
Continue reading “Is the President Ignoring Commercial Property?”
Allan Woodruff, CCIM
We’ve all been hearing and reading “gloom and doom” from the media.
But we know from history that turning points come while the masses are still moaning about how bad things are.
So are we at a turning point? Are we close enough to jump back into the market?
Here are a few facts investors can consider in refining their commercial real estate investment strategies on either the buy or sell side:
- The deleveraging process will take more time as we work through the process of restoring sanity to private and corporate finances. We’ve lived through a period of very high leverage which must be unwound. Habits and attitudes must change as investors take a more realistic view on risk, increase savings and reduce spending.
- Yes, there are economic “green shoots” being seen this spring. Witness the stock market rally and an upturn in existing single-family residential (SFR) real estate sales in February. Consumer Confidence rose slightly from March to April, according to the Conference Board. SFR affordability has reached a multi-year high due to collapsed prices and interest rates at their lowest levels since about 1971. The “transition point” (the inflection point at which prices fall slower than they had been) seems to have occurred in the SFR market, so there is evidence that SFR prices will find a bottom soon. Prices are typically at early-2004 levels or lower.
Continue reading “Is It Safe To Enter the Water?”
We cannot ignore the serious potential for commercial foreclosures inherent in the financial market today. To do so would be disingenuous and a violation of ethical standards related to client fiduciary.
What is the state of the commercial foreclosure market?
Will we see mortgage defaults in the commercial sector? Will the degree of defaults parallel the residential market collapse.
Sand State Foreclosures. Nevada, Arizona, California and Florida, the so-called “sand states” are experiencing the beginning of what can only be described as a plummet (my word).
According to the Las Vegas Sun, April 2, 2009, 25% of Las Vegas commercial real estate is troubled and Commercial properties valued at a whopping $7.885 billion are in trouble in Las Vegas as casinos struggle under the weight of the recession and office buildings and shopping malls lose or are unable to find tenants.
This phenomenon is being replicated in each of the “Sand States” as the federal government’s promised mortgage financing relief continues to be illusive to commercial investors.
Continue reading “Commercial Foreclosure – Next Exit”
