Commercial Estates

Like all the other sectors in the properties market, the commercial real estate market is feeling the effects of the housing lending disaster. Vacancy rates for retail, office and industrial properties are rising. With the decrease in rental income, building owners are finding it hard to generate enough income to pay off mortgage loans. Some lenders are beginning to put foreclosed properties on the market. Tighter credit has slowed the sales in the urban property market. Reis Inc., a New York-based real estate research firm, recently estimated that nationwide prices for office deals were down 11 percent from last year, while retail property prices were off 4 percent and warehouse property prices were down 7 percent. Foreclosed property is now being offered at substantial discounts, way below the lots’ original prices. There’s no indication that the market will be improving soon, so debt restructuring might be a better solution to the real estate problem.

Image Source: www.en.promocionescabildo.com
Lease Vs Buy
Many businesses reach a point in which they are curious as to whether it would be beneficial for them to purchase a building rather than continue to lease space. While every business is different there are a few common factors that should be taken into consideration when evaluating whether buying a building space would be better than continuing to lease space. We will take a look at some of the pros and cons to purchasing compared to continuing to lease space.

The Next Step While the evaluation of the leasing vs. buying space decision seems somewhat overwhelming, there is help.  Getting advice and assistance from a commercial real estate professional who is involved in the business day in and day out can significantly improve not only the accuracy of any analysis, but in general simplify the process.  Many of the lease vs. buy factors can only be decided by you, but having a helping hand in the areas where space expertise is important will assure you of making the best possible decision.

They have just completed development of their fourth industrial building, the South California Logistics Centre in Victorville Califronia and theya re now in the process of securing a LEEDS certification from the environmental board. LEED cvompliant buildings are mainly environmentally friendly buildings that minimize taxing the environment and have active measures to do so. The facility has large skylights that minimizes the need for lightin in the daytime and has totally energy efficient lighting fixtures installed within them. They have also recently completed the Global Access Business Center which is similarly rated as a Class-A facility with better, more efficient environmentally friendly buildings that cater to the needs of companiues such as Newell, Rubbermaid, GE, Pratt & Whitney, FedEx, Goodyear Tires and Rubber Co., M&M/Mars and may other multi-national firms as they seek better greener facilities in green developments that have begun to sprout all over the US.

In efforts to recover from the devastation that resulted from the 9-11 attacks on the US mainly in Manhattan where the World Trade Center Buildings stood, the New Yorn and New Jersey Port Authority (which owns the land on which the new Freedom Towers are being built on) have released a statement that Beijing Vantone Real Estates has expressed a nonbinding agreement to lease property on the Freedom Tower which is steadily rising from the ruins of the former WTC.

Port Authority chairman Anthony Coscia said, “China Center’s expression of interest in the Freedom Tower, even before we begin our formal leasing program, strengthens our conviction that the World Trade Center site is a world-class business location. Serious interest from the China Center is a major milestone in our efforts to secure Freedom Tower tenants from around the world.”

This boosts the confidence of developers that the Freedom Towers is to become a viable commercial space for many global businesses that they are seeking tenants for.

Developemnts such as the one planned for Lowry Range, Colorado is currently getting more attention as more and more businesses go green. Viability studies are under way by Lend Lease Communities, their planned community would sport a solar generation facility that would provide for part the community’s energy needs. The proposed mixed use development is hailed to be one of Colorado’s first green development projects that would place them as one of the country’s green communities as we aim to become more environmentally-friendly starting with our communities.

They were taxed heavy during past hurricane seasons with losses amounting to billions in terms to property damage. This year, even with the 2008 hurricane season forecast still very well unknown, they breathe a sigh of releif for the past three years has been good to them with not much of the monster storms that damaged most of their properties in the Florioda area. They are hoping again for good conditions this year as they start to recover from their problems. They just hoep they get away with it again for another year of profits to aloow them to recover fully from the huge amounts of cash they lost due to storm damage.

Donald Trump, one of the US’s leading commercial developers turned TV celebrity has spoken on the current status of developemtns in the US and says that the opportunities for world-class developemtns has moved overseas in such areas that are still to see the cutting-edge developments that most US city’s already have.

“The problem that I see with the United States is that we’re no longer respected, we really aren’t,” lamented Trump, pointing out that there is plenty of blame to go around, starting with the political leadership. “I think that [perception] can be changed. We have the greatest people, the greatest businesses.”

We now hear of cutting edge and fast paced developments in Russia, China and India where the happenigs have shifted to and he blames the government for that eventuality.

The problem is that the U.S. has diplomats negotiating trade agreements with China and Japan, not seasoned business professionals and deal makers, argues Trump. “I’ve watched this for years, where Japan would just rip us. By the way, they [the Japanese] tell me, ‘I can’t believe we’re getting away with it.’” It’s much the same with the Chinese, says Trump.

Excerpts from NREIOnline.com, one of the leading real estates news portals around.

The sub-prime credit market troubles has been one of the most devastating financial disasters in recent hiostory in the US and the effects are rippling around the world. Many financial banks were affected globally and they have been suffering ever since the bubble burst. The trend was forseen and the many small time to medium sized firms engaged in real estates were affected except for the condo and investment property areas. Many investment properties boomed as single house prices became so low but people who have been wanting to purchase them not having enough financial might to get them. With the foreclosure level at a high 1 million homes adding to that a couple hundred thousand more of late payments, no end to the financial market crunch is seen in the future. Developers have had to put projects on hold due to huge surplus of inventories that have yet to be turned into liquid resources that is for reinjection into their cash flows. Let us just hope that there is ehough money left for these firms to continue functioning for tommorow when the time comes for development to boom again as markets begin to recover, sometime soon.

In Shanghai, China, an approximate amount of 4.68 billion dollars from the social security fund was invested in the real estate industry sector. According to the reports, the former party chief of China Chen Laiangyu was arrested and this aroused from an 18-month investigation. The first few details of the fraud was obtained way back in June 2006. So where did the money go? According to formal investigations, the money went to different companies such as the Bailian Group and the Feidan Investment. Both were based in Shanghai. The bulk of the outsourced finances were used on building property and highways.

It is forecasted that global investments in commercial properties will fall to 17 percent this year which is attributed to the continuing crisis experienced by the commercial property financing that is dragging the market to record level lows. The weight of global debts also began affecting deals which is forecasted to be the trend in 2008. With the uncertainty of commercial property markets around the world and the still frozen debt market are all contributory factors to the percentage fall.There is optimism however that prime real estate markets will be spared from the current slowdown and more mature markets are expected to recover by the second half of 2008. It has been observed that there is less money circulating in the market which is brought about by the reduced number of active debt backed investors.