Tag Archives: commercial real estate

Are You Trying to be a “Jack Of All Trades” in your Business?

Being a “Jack of all trades and a master of none” is not a good strategy your business.

Payson Arizona

I frequently talk to business owners who have paid the penalties “literally”, of hiring one of their regular “vendors” to provide additional services for them that was obviously outside the “vendors” area of expertise.

 

We are all in business to make money and it is difficult to turn down business form a regular customer/client and while meeting every need of every customer may sound customer-centric, that approach often leads to not serving any customers well.

 

Being in the real estate industry, many people think real estate is real estate. All real estate is not the same. Can you think of anything that a commercial building has in common with a house? If you said they both have at least one bathroom I urge you to think how the bathroom in a commercial building resembles the bathroom in your home. Right try again.

 

Well not only are the features between a house and a commercial building different, but the marketing strategies between residential and commercial real estate is also vastly different.

 

I am a commercial real estate agent, I do know however, many very qualified residential agents, so even though people give me strange looks when they ask me to help them buy or sell their home, and I refer them to one of those residential agents, even family members.

 

Even the largest of companies can’t afford to chase every dollar—only the dollars that align with their business strategy.

 

Let me know how I can help your with your commercial real estate needs.

 









 

The views and opinions expressed in this commentary are those of Richard D Chapin, PLLC as of the date of publication and are subject to change, and do not necessarily reflect the views of Arizona Elite Commercial and/or its affiliates.

 

 

This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always seek legal and/or tax advice to obtain further information you deem necessary. I want you to be prepared.

 

2014 Should be a Strong Year for the Commercial Real Estate Industry.

The commercial real estate industry should have a strong 2014, if academic economists and former policy makers are right in their predicting that the U.S. economic growth will accelerate this year.

Payson office building near Payson Regional Hosptital

office condos in Payson Arizona

 

“2014 is going to be a better year,” Martin Feldstein, a professor at Harvard University and chairman of the Council of Economic Advisers under President Ronald Reagan, said yesterday in Philadelphia. “There is no reason for pessimism about our near future if we adopt appropriate policies.”

JPMorgan Chase & Co. (JPM) is among the Wall Street banks turning more optimistic, predicting this week the economy will expand 2.8 percent this year, an increase from its 2.5 percent estimate of a month ago and faster than the 1.9 percent it calculates for 2013.

 

Former U.S. Treasury Secretary Lawrence Summers and John Taylor of Stanford University agreed in interviews that stronger growth this year was possible even as they clashed over what more policy makers could do to speed expansion.

 

Federal Reserve Chairman Ben S. Bernanke told a recent conference that headwinds to growth may be abating, cited a healthier financial industry, greater balance in housing, less fiscal restraint and accommodative monetary policy as reasons for optimism in coming quarters.

Bernanke added, “Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts”.

 

Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets and are better-positioned to increase spending. According to Federal Reserve data, household debt-service burdens are at their lowest level in more than 30 years,. Also, according to the Fed, Household wealth relative to disposable income has surpassed its historical average. This should give consumers the confidence to spend more of their disposable income, which will result in job creation.

 

In terms of absorption of inventory, we have seen and likely will continue to see extremely low levels of new supply, 2013 essentially tied with 2011 and 2012 as the weakest year for commercial construction since the late-1970s, according to Census Bureau data.

 

Investment in commercial real estate should increase as total returns to commercial real estate have been quite strong for three consecutive years now. Those commercial real estate investors who may have felt as if they have missed the party may now conclude that it is safe to go back into the water, based on the analyst recommendations s in favor of commercial real estate we have regularly seen in both the mainstream and financial press.

 

Commercial real estate’s potential to hedge inflation and interest-rate risks may attract income-oriented investors. Commercial real estate stands out as an attractive alternative that can provide relatively high yields and some degree of inflation along with interest rate protection.

 

As U.S. economic growth accelerates this year, according to academic economists and former policy makers, the commercial real estate industry should have a strong 2014.









The views and opinions expressed in this commentary are those of Richard D Chapin, PLLC as of the date of publication and are subject to change, and do not necessarily reflect the views of Arizona Elite Commercial Properties and/or its affiliates.

This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

Are You Out of Touch, Or is it just Me?

 Is it best practice to interrupt my client I am meeting with, when they are speaking, so I can answer my cell phone or reply to a text or read an email?

Do you mind if I answer my cell phone when you and I are in a meeting?

Being in the commercial real estate business, I generally find myself in meetings with property owners or business owners who’s schedules are very busy.

I respect their time and truly appreciate their taking time out of their busy schedule to meet with me and as such I have made it a point to shut off or put my cell phone or put it on vibrate and not answer my cell phone or read my texts or emails when I am in a meeting with them.

I instead check and respond to any texts, emails and voice mail messages that may have come in during our meeting right after the meeting.

Apparently not everyone believes this is the proper way to handle communications these days.

I recently read a post on social media by a residential real estate agent I know ( not just Facebook “friends”) who regularly boosts about how he always answers his phone (even when with clients).

In my opinion if you are at a meeting or meal, and you answer a call, you’re basically telling the person you’re meeting with that someone else is more deserving of your time than they are.

There is always a rare exception of course. A couple of years ago my dad was in the hospital scheduled to have bypass surgery in a couple days. I was flying out the day before but was still meeting business owners to discuss commercial real estate two days prior. I briefly explained the situation and apologized in advance that if the phone vibrated I would answer it. (fortunately it didn’t)

I believe if you are expecting an important phone call during your meeting and there’s no way you can reschedule it, then make sure to let the person you’re meeting with know ahead of time.

This isn’t the best scenario, but if it happens, you can say “I have to answer this” and briefly explain why before taking the call.

Am I out of touch, is it best practice to interrupt my client I am meeting with, when they are speaking, so I can answer my cell phone or reply to a text or read an email?

If so I apologize in advance if you try to call me and get a voice mail, and it takes me 20 minutes or an hour or so to call you back.

If someone schedules in advance, time out of their busy day to meet with me, I appreciate and respect their time.

Let me know how I can help you with your commercial real estate needs. If I don’t answer the phone, I will call you back as soon as I can and also give you the undivided attention you deserve.

 

Why Pay a Commission to Sell Your Commercial Property?

Do you think selling your commercial property yourself really save you money? Really?

I understand, we all want free stuff, but how much will it cost you to sell your commercial gilbert office condoproperty without a commercial real estate professional?

Going down to the local Walmart and buying one of those little red and white for sale by owner signs may work ( I would still recommend help from a residential real estate professional ), to sell a house. But that little red and white for sale by owner sign will be even less effective with a commercial property.

A commercial property is not a house, just think about it, I bet 100% of the people you know have a strong desire to live indoors ( you can’t get a bigger market than that). The percentage of people you know that have a strong desire to buy a commercial property is, wow, unless you are in the commercial real estate business, you likely can count them all on one hand.

Target marketing is required to successfully market a commercial property, mass marketing , like you do with houses for example is not enough, because the masses have no need.

I talked to a nice gentleman the other day that had put one of those red and white for sale by owner signs in the window of his commercial property. After a year and a half, all that has happen is the phone number he wrote with a black marker on the sign has faded, to the point it is difficult to read.

He didn’t seem to be concerned about the the building being unsold and vacant for over a year and a half, after all it is paid for so it wasn’t costing him anything to sit there, right.

What about taxes? What about insurance? Oh that’s true, money going out and no money coming in, sounds more like a liability than an asset! That may be a reason to pay a commission to have the building actually marketed by a commercial real estate professional.

Let me know how I can help you with your commercial property needs.









This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

 

2013 – The Year of the Commercial Real Estate Short Sale

Commercial real estate investors we should be aware that since the last big “commercial office building chandler azreal estate buying” period for commercial real estate properties was around 2008, so many of the existing 5 year fixed commercial loans used to finance those commercial real estate investments may be ballooning or becoming all due and payable in 2013.

 

Over 4,700 CMBS (Commercial Mortgage Backed Securities) with loan balances near $55 billion may need to be refinanced in 2013. A high percentage of these ballooning commercial mortgages may not have sufficient income to service the existing mortgage debt.

According to Bloomberg Financial News, there may be an additional 6,300+ non-CMBS commercial mortgage loans with balances of almost $79 billion, which may becoming all due and payable in 2013.

Things have most certainly changed since 2008 and in many cases, the existing mortgage debt on a commercial property, may currently exceed the market value in 2013 based upon the income and expenses for the commercial property. Some mortgage lenders or servicing companies may accept partial payoffs similar to a residential “Short Sale”.

 

As a result in 2013, Commercial “Short Sales” may increase.

 

This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared

 

Commercial Real Estate Market Bouncing Back

The entrepreneurial spirit appears to be alive and will as evidence by the increase in office building in chandlercommercial real estate activity we have seen the first half of this year and the recent reports there is reason to hope the commercial real estate market may be bouncing back.

 

The U.S. Labor Department released its unemployment and payrolls reading for the month of May. The bad news is that the official unemployment rate ticked up to 7.6% in May. The Bureau of Labor Statistics (BLS) data showed that 178,000 private sector payrolls were added in May.

 

In a self-reporting poll from Gallup, U.S. consumers spent more money in May than in any month since October 2008.

 

Despite the good news/bad news from labor department and BLS, minor increases in consumers spending and statistics showing a rather high failure rate for small businesses, another survey conducted by Deluxe Corp of 1,000 small business owners showed that the vast majority of them say they’d rather embrace potential failure than never try at all.

 

The survey found:

86% of the respondents believe they can do anything they set their minds to

77% say they would rather learn from failure than never try

89% describe themselves as leaders and 54% say they don’t want a boss

 

I just love the entrepreneurial mindset. This is one of the reasons I love being involved in commercial real estate, and don’t personally get involved in residential real estate at all. It’s the entrepreneurial mindset of a small business owner that is the engine that runs the economy in the free enterprise system and is the primary reason the commercial real estate market may be bouncing back.

 

This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared

Obamacare Could Lead To Boost for Commercial Real Estate

Despite many calling “Obamacare”, the largest tax ever imposed by a government on it’s Payson office building near Payson Regional Hosptitalcitizens and objections by businesses to parts of the Affordable Care Act (aka Obamacare), as many as 33% more new small businesses could be started, over the next few years as a result of the law, the WSJ reported as estimated by, The Kauffman-RAND Institute for Entrepreneurship Public Policy.

 

Why the projected increase?

 

Great business ideas aren’t limited to the affluent or the young, however without a significant savings cushion, a luxury many people don’t have. Leaving a safe corporate job with benefits, just doesn’t seem like an option, especially those with pre-existing conditions, from starting their own business is the ability to get robust and affordable health insurance. People seek out and keep corporate jobs, not because they want to, but because they feel like they have to.

 

The Affordable Care Act (Obamacare) could potentially solve that by offering people who start a businesses coverage through state or federally run marketplaces for insurance (exchanges).

 

 

The WSJ went on to say “To see that full 33% increase in new businesses, coverage from exchanges would have to be equivalent to that from corporate plans, which is unlikely in the short run. But that’s a big if. Many details of the law’s implementation have yet to be worked out”. Obamacare Could Lead To 33% More New Businesses Over The Next Few Years

 

 

This could provide a boom for commercial real estate for these new businesses, as well as industries that cater to providing products and or services to small businesses over the next few years.

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This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared

 

The Phoenix Office market – Prices Up Vacancy Rate Down

Commercial Real Estate prices up 5.1% Year-over-year in February and The Phoenix offices in gilbert az for leaseOffice market ended the first quarter 2013 with a vacancy rate of 19.4% according to CoStar.

Also according to CoStar, the Phoenix area office vacancy rate was down over the previous quarter, with net absorption totaling positive 152,689 square feet in the first quarter.

Rental rates ended the first quarter at $19.44, a decrease over the previous quarter.

Additionally there was 256,270 square feet still under construction at the end of the quarter.

The real estate market is heading up – The percentage of commercial property selling at distressed prices dropped in February 2013 from the previous month.

The longer you wait to get in the game, the harder it is going to be to make money.

Building costs are increasing. Buying a property below replacement cost gives you a leg up, but will become increasingly more difficult as prices continue to rise .

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This information is for informational purpose and not intended to be investment advice, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain furtherinformation you deem necessary. I want you to be prepared

 

Investing in Commercial Real Estate Now or are You Waiting for the Peak?

The commercial real estate market is on the upswing, there is no hiding that anymore. While that is n gilbert low rise office buildinggood news for existing real estate investors, finding quality acquisitions is becoming increasingly more difficult as prices continue to rise.

The rental market is strong. The commercial real estate market is on the upswing. Net absorption of available space for the three major commercial property types: office, retail, and industrial, has been positive over the past three years. According to CoStar: Commercial Real Estate prices were up 5.1% Year-over-year in February.

Builders are reentering the market. Builders build when they think they can make money. With commercial property prices and demand increasing, builders are being drawn back into the market. Apartment developers have been back for awhile now, as the rental market is as strong as it’s ever been, but now they are being joined by residential builders. This will of course lead to building costs increasing. As more is built, the need for materials and labor increases, causing prices to naturally increase as well.

The recession, and commercial real estate collapse did result in so many foreclosures that banks couldn’t release all their inventory onto the market. If they did, it would have led to even further drops in value.

Banks aren’t in the business of property management, so all that inventory they are holding back from the market is just eating away at their bottom line, and ultimately making them uneasy. This can provide a huge opportunity for the right investors

So are you going to invest in commercial real estate now or are you waiting for the peak?

The commercial real estate market is heading up, the longer you wait to get in the game, the harder it is going to be to make money.

Building costs are increasing. Buying a commercial property below replacement cost gives you a leg up. Bear in mind that distressed sales have been on the decline. The percentage of commercial property selling at distressed prices dropped to 15.9% in February 2013 from over 18% for the previous month.

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This information is for informational purpose and not intended to be investment advise, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

Commercial Real Estate Prices were up and Sales Volume Surged in 2012

Commercial real estate sales volume, rising steadily over the last four years, reached nearly $64 billion in 2012, a industrial buildings mesa22% increase from 2011 and the highest annual total since 2004 according to CoStar.

CoStar also reported that distressed sales made up only 11.5% of observed trades in December 2012, which was the lowest level since the end of 2008. This reduction in distressed deal volume has been driving higher, more consistent pricing.

While both commercial real estate and housing in Arizona clearly have been picking up steam, many local experts believe that until improvements in the nation’s overall economy and employment shift from subpar to above average, another market boom still is several years away.

The nation’s debt, jobs, consumer confidence and gross domestic product have improved, but the progress hasn’t been nearly enough to take a real bite out of the still-lingering economic woes. Metro Phoenix,for example, has only gained about 40 percent of the 234,000 jobs it lost from peak.

Arizona has reason to be optimistic. After plunging from second to 49th in terms of job growth between 2006 and 2009, Arizona climbed back to the No. 5 spot last year,

This has helped reignite the local housing market and the commercial sector has been trailing behind.

As for commercial real estate, recent job growth has prompted big improvements especially with absorption in the office and retail sectors.

eqhouseops

 

 

 

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This information is for informational purpose and not intended to be investment advise, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared