Buyer vs. Seller Conundrum

Donald Teel

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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Property Performance Analysis

McCormick Place - Prescott, Arizona

McCormick Place - Prescott, Arizona

Post Sponsored by Donald Teel

What is the current state of commercial property ownership, user potential, performance and values in the Prescott, Arizona area?

Where is the commercial real estate market headed in 2009 and beyond and what should property owners be doing to focus on property performance going forward?

At Arizona Commercial, we believe it is critically important for owners of commercial property within the tri-cites of Prescott, Prescott Valley and Chino Valley to consider executing a thorough “Property Performance Analysis” or PPA, based upon changes taking place in the general market but especially with respect to changes taking place in commercial mortgage lending.

The Myth of Immunity

The tri-cities commercial real estate market is not immune from the impact of the economy on property performance in larger metro markets such as Los Angeles and Phoenix.

The local commercial market is directly impacted by the strength of the general ecomomy, unemployment, housing and most importantly, lending.

The decline in residential property values, a slowdown in new construction, the reversal of commercial appreciation rates and unemployment are all contributing to changes in the performance of all segments of the commercial real estate market.

Listen to a podcast about this topic:[audio:]

Property Performance Analysis

Arizona Commercial is currently engaged in conducting “Property Performance Analysis” (PPA) with commercial property owners as a FREE service designed to guage an owner’s financial objectives, the current financial performance of a property and the short and long term financing needs associated with the property.

Because we anticipate new challenges to commercial property performance as a direct result of the general conditions of the economy we think it imperative that owners assess their property performance situation sooner rather than later, and that they develop a sound financial plan going forward.”

Jim Pullaro – Broker, Arizona Commercial

Arizona Commercial’s PPA includes an assessment of and owners’s financial objectives measured against the quality of tenant mix, correct property use, lease performance, operating cost analysis, mortgage situation and estimations of user demand through 2010, with specific recommendations in each category.

Arizona Commercial’s PPA is like a property physical, in a sense. It measure the critical components related to the health of a commercial property and sets forth prognosis and treatment before problems begin.

Listen to a podcast about this topic:[audio:]

Refinancing and Replacing

Commercial property owners and investors are keenly aware of the need for quality “R and R” or, refinancing and replacing. These are the two keys to perpetuating long term performance.

Lenders are currently tightening requirement for new commercial loans and refinancing. Qualification requirements are more stringent and under-performing properties or, select segments (property types) within the commercial real estate market are finding it more difficult to secure financing.

A PPA can signal issues fan owner may face before they become critical and assist with pre-planning for mortgage refinancing, property replacement or, both.

Commercial real estate investments require monitoring, adjustments and sometime immediate changes in order to keep them performing. A PPA can flag areas where an owner can and should make adjustments in order to keep performance healthy.

Until recently, many properties were performing as a result of a strong demand and easy financing. Therefore, many owners ignored or postponed the need for regular property analysis. In today’s economy there is no guarantee that a property will appreciate or perform without careful “hands-on” attention and management of the components of performance.

Listen to a podcast about this topic:[audio:]

Email Donald Teel for a confidential Property Performance Analysis or, if you prefer, call him at 928.777.8100 and if you are out of state call toll free to 877.777.9100.

Commercial Foreclosure – Next Exit

foreclosure-extiWe 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.
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Centerpointe East – Amazing Industrial

2997 Centerpointe East, Prescott, Arizona - Newer Industrial

2997 Centerpointe East, Prescott, Arizona - Newer Industrial

This is but one example of the tenant-investor opportunities available in the central and northern Arizona market areas.

Centepointe East features the newest industrial property opportunities in the market and this piece is the most affordable of them all.

Property Description:

New free standing industrial building with 3 overhead doors, good parking, in new business park. Ask about Owner terms for potential purchase.

Location Description:

Located off Highway 89A between the communities of Prescott, Prescott Valley and Chino Valley, easy access to 1-40, and 1-17

Lease and Purchase Information:

There are three suites available within this building; Two 1,500 s.f. and one 2,000 s.f. Best of all they are priced at an amazing $0.25 per s.f. per month, plus NNN. In addition, this property can be purchased with a potential seller financing.

Contact me about this property or email me. If you prefer, you may call me toll free at 1-877-380-1000.