Monday, December 14, 2009
Thursday, November 19, 2009
Wednesday, October 7, 2009
Tuesday, October 6, 2009
Saturday, October 3, 2009
Friday, October 2, 2009
Wednesday, September 23, 2009
Commercial Sales Down, Leases Up in 2008
Daily Real Estate News | September 23, 2009 | Share
REALTORS® specializing in commercial real estate experienced a slowdown in sales transaction volume in 2008, but also reported an increase in commercial leasing volume, according to the 2009 National Association of REALTORS® Commercial Member Profile.
The study’s results represent REALTORS® who practice commercial real estate, a group that comprises more than 81,000 of NAR’s 1.2 million members. The survey shows that the median sales volume in 2008 was down nearly 10 percent since 2006, resulting in a 13.6 percent decline in median income. However; the results also showed a 33-percent increase in commercial leasing volume during the same two-year period.
REALTORS® Commercial Alliance Committee Chair Robert Toothaker said that, despite the fact that commercial real estate activity has suffered, the typical NAR commercial member was doing slightly better than might be expected. “Because most of our members are involved in transactions of under $5 million, the decline in business was not quite as sharp as the drop in investment-grade transactions,” he said. “The flow of funds from regional banks hasn’t slowed as dramatically, leaving some credit available for commercial transactions; however, credit has tightened further in 2009, and continues to curtail commercial real estate lending activity. NAR continues to advocate on behalf of its commercial members to increase liquidity to commercial real estate and ensure overall economic recovery.”
The median number of transactions for REALTORS® practicing commercial real estate in 2008 was eight, unchanged from 2006. Transaction volume for commercial members was $2,024,900 in 2008, down from $2,248,700 in 2006. Sixty-five percent reported a volume greater than $1 million; and nearly a quarter had a transaction volume of $50 million or more in 2008. Leasing volume for commercial members in 2008 was $244,300, slightly higher than the $183,600 reported in 2006.
The median income in 2008 was $99,900, down from $115,600 in 2006. Brokers earned a median of $129,500, while sales agents earned $70,100. Commercial members in the business for two years or less earned a median of $30,200, while those with three to five years of experience earned $63,700. For six to 15 years, the median was $94,700, while members in the business for 16 years or more earned $147,700.
The median dollar value of sales transactions in 2008 was $544,100. The amount was slightly higher among brokers ($629,500) compared to sales agents ($423,500); and varies with experience – those with less than two years experience had a typical sales transaction value of $181,800, well below the $689,900 among those with 16 to 25 years experience. The median square footage of sales transaction in 2008 was 14,000.
Leasing dollar value for commercial members was typically $128,900 in 2008. Commercial members with fewer than two years experience had a typical leasing dollar value of $64,200; those with 16 to 25 years experience had a typical transaction value of $213,200. The median square footage of leasing transactions in 2008 was 4,300.
Most commercial members are compensated on some sort of commission basis. Forty-five percent of commercial members are compensated through a split commission arrangement, 33 percent receive all of the commission, and another 9 percent receive a salary plus a share of the profits.
Three-quarters of NAR’s commercial members bring in 50 percent or more of their annual income from real estate. Income from leasing activity falls well below income from sales. In 2008, 49 percent of commercial members said they received half to all of their income from commercial sales; 19 percent indicated none of their annual income came from commercial sales. Income from leasing was far less, only 24 percent earned half to all of their income from leasing commercial property in 2008; 28 percent earned none of their annual income from leasing.
Fifty-six percent of commercial members said none of their income came from personal commercial real estate investments; only 8 percent made half or more of their income from their personal investment in commercial real estate.
Source: NAR
REALTORS® specializing in commercial real estate experienced a slowdown in sales transaction volume in 2008, but also reported an increase in commercial leasing volume, according to the 2009 National Association of REALTORS® Commercial Member Profile.
The study’s results represent REALTORS® who practice commercial real estate, a group that comprises more than 81,000 of NAR’s 1.2 million members. The survey shows that the median sales volume in 2008 was down nearly 10 percent since 2006, resulting in a 13.6 percent decline in median income. However; the results also showed a 33-percent increase in commercial leasing volume during the same two-year period.
REALTORS® Commercial Alliance Committee Chair Robert Toothaker said that, despite the fact that commercial real estate activity has suffered, the typical NAR commercial member was doing slightly better than might be expected. “Because most of our members are involved in transactions of under $5 million, the decline in business was not quite as sharp as the drop in investment-grade transactions,” he said. “The flow of funds from regional banks hasn’t slowed as dramatically, leaving some credit available for commercial transactions; however, credit has tightened further in 2009, and continues to curtail commercial real estate lending activity. NAR continues to advocate on behalf of its commercial members to increase liquidity to commercial real estate and ensure overall economic recovery.”
The median number of transactions for REALTORS® practicing commercial real estate in 2008 was eight, unchanged from 2006. Transaction volume for commercial members was $2,024,900 in 2008, down from $2,248,700 in 2006. Sixty-five percent reported a volume greater than $1 million; and nearly a quarter had a transaction volume of $50 million or more in 2008. Leasing volume for commercial members in 2008 was $244,300, slightly higher than the $183,600 reported in 2006.
The median income in 2008 was $99,900, down from $115,600 in 2006. Brokers earned a median of $129,500, while sales agents earned $70,100. Commercial members in the business for two years or less earned a median of $30,200, while those with three to five years of experience earned $63,700. For six to 15 years, the median was $94,700, while members in the business for 16 years or more earned $147,700.
The median dollar value of sales transactions in 2008 was $544,100. The amount was slightly higher among brokers ($629,500) compared to sales agents ($423,500); and varies with experience – those with less than two years experience had a typical sales transaction value of $181,800, well below the $689,900 among those with 16 to 25 years experience. The median square footage of sales transaction in 2008 was 14,000.
Leasing dollar value for commercial members was typically $128,900 in 2008. Commercial members with fewer than two years experience had a typical leasing dollar value of $64,200; those with 16 to 25 years experience had a typical transaction value of $213,200. The median square footage of leasing transactions in 2008 was 4,300.
Most commercial members are compensated on some sort of commission basis. Forty-five percent of commercial members are compensated through a split commission arrangement, 33 percent receive all of the commission, and another 9 percent receive a salary plus a share of the profits.
Three-quarters of NAR’s commercial members bring in 50 percent or more of their annual income from real estate. Income from leasing activity falls well below income from sales. In 2008, 49 percent of commercial members said they received half to all of their income from commercial sales; 19 percent indicated none of their annual income came from commercial sales. Income from leasing was far less, only 24 percent earned half to all of their income from leasing commercial property in 2008; 28 percent earned none of their annual income from leasing.
Fifty-six percent of commercial members said none of their income came from personal commercial real estate investments; only 8 percent made half or more of their income from their personal investment in commercial real estate.
Source: NAR
Tuesday, September 22, 2009
From Realtors News
Commercial Prices Continue to Drop
Commercial real estate prices fell 5.1 percent from June to July, according to Moody's/REAL Commercial Property Price Indices.
The index has been sliding steadily compared to last year and is down 30.8 percent compared to July 2008 and 38.7 percent below its peak in October 2007.
The volume of transactions also declined with sales during the first seven months of the year, averaging 375 per month, compared to 1,100 per month in 2008.
Source: The Associated Press (09/22/2009)
Commercial real estate prices fell 5.1 percent from June to July, according to Moody's/REAL Commercial Property Price Indices.
The index has been sliding steadily compared to last year and is down 30.8 percent compared to July 2008 and 38.7 percent below its peak in October 2007.
The volume of transactions also declined with sales during the first seven months of the year, averaging 375 per month, compared to 1,100 per month in 2008.
Source: The Associated Press (09/22/2009)
Wednesday, September 2, 2009
WOW too long
OK, you know it's been a long time when you can't remember your blogger password... YIKES. September hit yesterday, caught me off guard. The past few weeks have been crazy busy with calls, showings, listings. But you'll note, not too much closing going on. I do believe that's around the corner. Whenever the other activities pick up, the closings are traditionally next. Keep your fingers crossed that that doesn't change. Below is something fun I found, so I thought I'd share:
1895 8th grade final exam
Take this test and pass it on to your more literate friends..
What it took to get an 8th grade education in 1895...
Remember when grandparents and great-grandparents stated that they only had an 8th grade education? Well, check this out. Could any of us have passed the 8th grade in 1895?
This is the eighth-grade final exam from 1895 in Salina , Kansas , USA . It was taken from the original document on file at the Smokey Valley Genealogical Society
and Library in Salina , and reprinted by the Salina Journal.
8th Grade Final Exam: Salina , KS - 1895
Grammar (Time, one hour)
1. Give nine rules for the use of capital letters
2. Name the parts of speech and define those that have no modifications.
3. Define verse, stanza and paragraph
4. What are the principal parts of a verb? Give principal parts of 'lie,''play,' and 'run'
5. Define case; illustrate each case.
6 What is punctuation? Give rules for principal marks of punctuation.
7 - 10. Write a composition of about 150 words and show therein that you understand the practical use of the rules of grammar.
Arithmetic (Time,1 hour 15 minutes)
1. Name and define the Fundamental Rules of Arithmetic.
2. A wagon box is 2 ft. Deep, 10 feet long, and 3 ft. Wide. How many bushels of wheat will it hold?
3. If a load of wheat weighs 3,942 lbs., what is it worth at 50cts/bushel, deducting 1,050 lbs. For tare?
4. District No 33 has a valuation of $35,000. What is the necessary levy to carry on a school seven months at $50 per month, and have $104 for incidentals?
5. Find the cost of 6,720 lbs. Coal at $6.00 per ton.
6. Find the interest of $512.60 for 8 months and 18 days at 7 percent.
7. What is the cost of 40 boards 12 inches wide and 16 ft.. Long at $20 per metre?
8. Find bank discount on $300 for 90 days (no grace) at 10 percent.
9. What is the cost of a square farm at $15 per acre, the distance of which is 640 rods?
10. Write a Bank Check, a Promissory Note, and a Receipt
U.S. History (Time, 45 minutes)
1 Give the epochs into which U.S. History is divided
2. Give an account of the discovery of America by Columbus
3. Relate the causes and results of the Revolutionary War.
4. Show the territorial growth of the United States
5. Tell what you can of the history of Kansas
6. Describe three of the most prominent battles of the Rebellion.
7. Who were the following: Morse, Whitney, Fulton , Bell , Lincoln , Penn, and Howe?
8. Name events connected with the following dates: 1607, 1620, 1800, 1849, 1865.
Orthography (Time, one hour)
[Do we even know what this is??]
1. What is meant by the following: alphabet, phonetic, orthography, etymology, syllabication
2. What are elementary sounds? How classified?
3. What are the following, and give examples of each: trigraph, subvocals, diphthong, cognate letters, linguals
4. Give four substitutes for caret 'u.' (HUH?)
5. Give two rules for spelling words with final 'e.' Name two exceptions under each rule.
6. Give two uses of silent letters in spelling. Illustrate each.
7. Define the following prefixes and use in connection with a word: bi, dis-mis, pre, semi, post, non, inter, mono, sup.
8. Mark diacritically and divide into syllables the following, and name the sign that indicates the sound: card, ball, mercy, sir, odd, cell, rise, blood, fare, last.
9. Use the following correctly in sentences: cite, site, sight, fane, fain, feign, vane , vain, vein, raze, raise, rays.
10. Write 10 words frequently mispronounced and indicate pronunciation by use of diacritical marks
and by syllabication.
Geography (Time, one hour)
1 What is climate? Upon what does climate depend?
2. How do you account for the extremes of climate in Kansas ?
3. Of what use are rivers? Of what use is the ocean?
4. Describe the mountains of North America
5. Name and describe the following: Monrovia , Odessa , Denver , Manitoba , Hecla , Yukon , St. Helena, Juan Fernandez, Aspinwall and Orinoco
6. Name and locate the principal trade centers of the U.S. Name all the republics of Europe and give the capital of each.
8. Why is the Atlantic Coast colder than the Pacific in the same latitude?
9. Describe the process by which the water of the ocean returns to the sources of rivers.
10. Describe the movements of the earth. Give the inclination of the earth.
Notice that the exam took FIVE HOURS to complete.
Gives the saying 'he only had an 8th grade education' a whole new meaning, doesn't it?!
Also shows you how poor our education system has become and,
NO, I don't have the answers!
1895 8th grade final exam
Take this test and pass it on to your more literate friends..
What it took to get an 8th grade education in 1895...
Remember when grandparents and great-grandparents stated that they only had an 8th grade education? Well, check this out. Could any of us have passed the 8th grade in 1895?
This is the eighth-grade final exam from 1895 in Salina , Kansas , USA . It was taken from the original document on file at the Smokey Valley Genealogical Society
and Library in Salina , and reprinted by the Salina Journal.
8th Grade Final Exam: Salina , KS - 1895
Grammar (Time, one hour)
1. Give nine rules for the use of capital letters
2. Name the parts of speech and define those that have no modifications.
3. Define verse, stanza and paragraph
4. What are the principal parts of a verb? Give principal parts of 'lie,''play,' and 'run'
5. Define case; illustrate each case.
6 What is punctuation? Give rules for principal marks of punctuation.
7 - 10. Write a composition of about 150 words and show therein that you understand the practical use of the rules of grammar.
Arithmetic (Time,1 hour 15 minutes)
1. Name and define the Fundamental Rules of Arithmetic.
2. A wagon box is 2 ft. Deep, 10 feet long, and 3 ft. Wide. How many bushels of wheat will it hold?
3. If a load of wheat weighs 3,942 lbs., what is it worth at 50cts/bushel, deducting 1,050 lbs. For tare?
4. District No 33 has a valuation of $35,000. What is the necessary levy to carry on a school seven months at $50 per month, and have $104 for incidentals?
5. Find the cost of 6,720 lbs. Coal at $6.00 per ton.
6. Find the interest of $512.60 for 8 months and 18 days at 7 percent.
7. What is the cost of 40 boards 12 inches wide and 16 ft.. Long at $20 per metre?
8. Find bank discount on $300 for 90 days (no grace) at 10 percent.
9. What is the cost of a square farm at $15 per acre, the distance of which is 640 rods?
10. Write a Bank Check, a Promissory Note, and a Receipt
U.S. History (Time, 45 minutes)
1 Give the epochs into which U.S. History is divided
2. Give an account of the discovery of America by Columbus
3. Relate the causes and results of the Revolutionary War.
4. Show the territorial growth of the United States
5. Tell what you can of the history of Kansas
6. Describe three of the most prominent battles of the Rebellion.
7. Who were the following: Morse, Whitney, Fulton , Bell , Lincoln , Penn, and Howe?
8. Name events connected with the following dates: 1607, 1620, 1800, 1849, 1865.
Orthography (Time, one hour)
[Do we even know what this is??]
1. What is meant by the following: alphabet, phonetic, orthography, etymology, syllabication
2. What are elementary sounds? How classified?
3. What are the following, and give examples of each: trigraph, subvocals, diphthong, cognate letters, linguals
4. Give four substitutes for caret 'u.' (HUH?)
5. Give two rules for spelling words with final 'e.' Name two exceptions under each rule.
6. Give two uses of silent letters in spelling. Illustrate each.
7. Define the following prefixes and use in connection with a word: bi, dis-mis, pre, semi, post, non, inter, mono, sup.
8. Mark diacritically and divide into syllables the following, and name the sign that indicates the sound: card, ball, mercy, sir, odd, cell, rise, blood, fare, last.
9. Use the following correctly in sentences: cite, site, sight, fane, fain, feign, vane , vain, vein, raze, raise, rays.
10. Write 10 words frequently mispronounced and indicate pronunciation by use of diacritical marks
and by syllabication.
Geography (Time, one hour)
1 What is climate? Upon what does climate depend?
2. How do you account for the extremes of climate in Kansas ?
3. Of what use are rivers? Of what use is the ocean?
4. Describe the mountains of North America
5. Name and describe the following: Monrovia , Odessa , Denver , Manitoba , Hecla , Yukon , St. Helena, Juan Fernandez, Aspinwall and Orinoco
6. Name and locate the principal trade centers of the U.S. Name all the republics of Europe and give the capital of each.
8. Why is the Atlantic Coast colder than the Pacific in the same latitude?
9. Describe the process by which the water of the ocean returns to the sources of rivers.
10. Describe the movements of the earth. Give the inclination of the earth.
Notice that the exam took FIVE HOURS to complete.
Gives the saying 'he only had an 8th grade education' a whole new meaning, doesn't it?!
Also shows you how poor our education system has become and,
NO, I don't have the answers!
Monday, July 13, 2009
Summer time and the living is chaotic...
For real estate agents, summer is the busiest time, and this year is no exception. The residential folks are out there showing folks houses from a more limited inventory than in the past, so houses are being shown more, and the sales figures are improving. Commercial agents are dealing with the opposite issue right now, we have fewer clients, more listings to go through and more challenging financing situations. So we are working hard and hoping that the economy's slow climb out of the doldrums speeds. But for now, we are marketing, marketing, marketing. We are looking for new and better ways to get attention to our listings starting with signage, the internet, news sources, personal emails and networking. Whatever it takes. Olympia is a little better than the national markets, but our challenges are real too. We have a limited market, and we are always trying to freshen our look. So excuse me while I go and check my web site postings, edit my listings, put up more signs and contact my clients!!!
Tuesday, July 7, 2009
Thursday, June 25, 2009
An article worth reading
For Those with Money: "You Won't Find a Better Time to Be a Buyer"
Cash Will (Again) Be King as Slower Than Expected Recovery Will Create its Own Set of Opportunities, According to Commercial Real Estate Professionals
http://www.costar.com/News/Article.aspx?id=F4083E78D1B9157E51BCE8BED74B8400
Cash Will (Again) Be King as Slower Than Expected Recovery Will Create its Own Set of Opportunities, According to Commercial Real Estate Professionals
http://www.costar.com/News/Article.aspx?id=F4083E78D1B9157E51BCE8BED74B8400
Tuesday, June 23, 2009
The market
I was speaking to a retailer yesterday and she said she thought the news of the recession had been somewhat overblown for our market. I agree. She said she has found if she doesn't read the paper or watch TV, all is well. I understand where she's coming from, but I think it is important to stay in touch. However, I do think we in Thurston County are somewhat protected, and our housing slump seems to have leveled out, now I'm feeling a shift in the office market. I am negotiating leases, and looking for space, and having other agents tell me...oh we just leased that. Business is happening. Prices have come down on rents, which for some is good news and for others Horrible news. My sympathies to the property owners who are taking this hit, but I think we all knew it was coming, we have been fairly inflated in this market for some time. Anyway, the boat's still rocking, waves are striking, and I'm curious to see where we end up leveling out.
Friday, June 5, 2009
New/Old Digs
This week I have returned to working at RE/MAX Parkside Commercial. I enjoyed getting to know the folks at Colliers very much. They have a good group over there, but I think I'm more of an independent spirit than the corporate type. So here I am.
I think I'm just in time to begin seeing the uptick in the residential market, according to the agents around me and the leveling out of the commercial one. We are seeing the prices on leases dropping, vacancies rising and all in all a more challenging market. However, keep in mind... out of those challenges is born opportunity. It's time to buy, it's time to lease. You won't see deals like this again for a while. So think expansion, think market share. And give me a call!!!
I think I'm just in time to begin seeing the uptick in the residential market, according to the agents around me and the leveling out of the commercial one. We are seeing the prices on leases dropping, vacancies rising and all in all a more challenging market. However, keep in mind... out of those challenges is born opportunity. It's time to buy, it's time to lease. You won't see deals like this again for a while. So think expansion, think market share. And give me a call!!!
Tuesday, May 26, 2009
Italian Food
Manganos Ristorante
(360) 456-2212 Another new business I have had the recent pleasure of enjoying is Mangano's. Mangano's is the first Italian Restaurant in this area that reminds me of my family's cuisine when I was growing up. In a word -- it's GREAT!!! I have eaten there a couple of times now and have never been disappointed. This last time, I simply indulged in Spaghetti and Meatballs; so good, they almost made me cry. It was as delicious or better than my Momma's... Please don't tell her I said so. Anyway, everyone should give it a go, you won't regret it.
Mangano's is at 9323 Martin Way in Lacey.
Tuesday, May 19, 2009
WHITTLE
Two weeks or so ago a new business opened in downtown Olympia. It is aptly called Whittle. Whittle is one of the coolest places I've come across in a long time. You get to go in, pick your wood, pick your design, then proprietor, Kyle Flynn, goes to work to help you create your masterpiece, toy or household item. My first two items will be a clock and a cutting board. My daughter's will probably be a puzzle of her new little sister's name (her father's wife just had a new baby). I am excited and energized by something new and creative in downtown Olympia.
Find Whittle on the Web at www.whittleoly.com or in downtown Olympia at 116 Capitol Way North.
Wednesday, May 13, 2009
Opportunities
New investment opportunities are beginning to pop up. Slowly but surely, sellers are putting their feelers out for buyers. Landlords are making their properties more appealing to tenants. If you've been waiting to buy or lease new space, it's time to start looking. If the housing market was any indication, this softness will not last for long and will not be the end of the world. So buyers and lessees... rev your engines, it's time to start looking.
Monday, May 4, 2009
Busier
The phones have started ringing again. This is great news. The better news is the calls are coming from tenants with real businesses. Whenever this happens, it is a good sign. It is still taking longer to settle the tenants into spaces, but that's because there are so many spaces available. The days of there's one or two for every tenant are gone. Now there are 10-12 or more. So if you're a landlord, take this to heart and make your space the best one out there. The tenants are coming, be prepared!!!
Wednesday, April 15, 2009
Valuing your property
I heard a rumor today that appraisals are coming in lower than sale prices. This can be a real problem when trying to sell your building. It is imperative that the sale price you assign to your property reflects a price that banks will loan on the property.
There are a number of different ways to evaluate how much your property is worth. But the safest bet is to not marry yourself to just one methodology and to find an agent who can evaluate the property on a number of playing fields. With this in mind, I have recently enlisted the aid of an experienced appraiser to add value to valuations. For a very reasonable price, she will give you a "mini-appraisal."
Once you have her input, I will help you look at the market in which your building is located and together we can figure out how to price your property to sell, lease or hold.
There are a number of different ways to evaluate how much your property is worth. But the safest bet is to not marry yourself to just one methodology and to find an agent who can evaluate the property on a number of playing fields. With this in mind, I have recently enlisted the aid of an experienced appraiser to add value to valuations. For a very reasonable price, she will give you a "mini-appraisal."
Once you have her input, I will help you look at the market in which your building is located and together we can figure out how to price your property to sell, lease or hold.
Monday, April 13, 2009
What can I give my clients?
I am always looking to add value to my services. Right now, I help evaluate worth, help prepare contracts, market properties, find tenants, find buyers, negotiate leases and purchases, help new businesses with marketing plans, advise on locations, and write about businesses. I am looking for ideas of what folks need in this market to make their businesses tick better. Please let me know if you have ideas or suggestions.
Monday, March 30, 2009
Plaxo and Facebook, finally giving in
So we're all in this together. This being the economic crunch; it's a crisis, it's crazy, corrupt, cranky, creative, and crusty... I'm sure there are more adjectives, but you don't want to push a point too far. My business is based largely on referral work, past clients who send me to their colleagues and friends. This is a wonderful way to get business, and it's been very good to me, and I hope it continues forever. However, in this economic time, it is necessary for business (including mine) to reach out and touch new business, new pipelines in order to stay afloat. So I have picked up my pace. I'm attending more events, more Rotary meetings, and I have joined Plaxo and Facebook. Connection, connection, connection. Keeping in front of your potential clients, letting them know you are available to work for them. This is where the creative comes in when describing the times we are in. We need to be creative in our marketing, our connections and our strategies. So get out there. NOW!
Wednesday, March 18, 2009
Island Recession
OK, so I made light of my vacation and said I would check on the commercial real estate on Kauai... but I really did. When the helicopter shuttle driver was a real estate agent, who had to get a "real" job, I decided it was something that needed doing. So, the long and short of it. It's not good. Vacancies looked to be about 40% for retail. There is a for sale sign every 10 feet in some neighborhoods. The first thing people let go of? Vacations and Vacation homes. So if you do have money to spend, now's the time... hmmm seems like I've said that before...
Monday, March 2, 2009
Exploring Commercial Real Estate in Hawaii
So it has been a year since I've had a vacation, and I felt it was time to change that. I will be leaving town tomorrow to check out Kaua'i. I've never been to any of the Hawaiian islands, but everyone tells me that I will not want to come back. I'll let you know. Meanwhile, if you need help, Dante Gomez, my worthy colleague, will be happy to show buildings, answer questions or write up contracts. Please feel free to call him at 360-259-9597.
Thursday, February 19, 2009
Location x 3
When I am working with a small business to determine where they should locate, I have basic and important questions. But recently with the shift in the market to being a buyer's market, I have put some thought into how this affects the landlord/seller. How can you sell your location???
When a business is looking for a location, they have differing needs, so the questions they look at need to be flipped to tell a landlord or seller how to target for their locations. Putting yourself in the other person's shoes can give you valuable insight about your marketing strategies.
1. For the tenant/buyer: What is most important? Visibility, walk-by traffic, security, highway access etc. So as a landlord/seller: where are you? what are its benefits? how can you market them? By far this is number 1 on just about every tenant's list, and it's the least flexible thing about any location, so you need to know what your location's attributes are and play them up.
2. For the tenant/buyer: What is your budget? For the landlord/seller: How much do you need to derive from this transaction? What is your bottom line?
3. For the tenant/buyer: How many employees do you need to accomodate? What is the work environment you are hoping for? For the landlord/seller: How can you make your space the most flexible? What are ways to give the most bang for the buck?
4. For the tenant/buyer: How long of a lease are you comfortable with? What kind of lease are you comfortable with? Newer/smaller businesses are often confused by the nnn lease, more savvy tenants understand the need for passing through the expenses. For the landlord/seller: How flexible can you be in your leasing options?
5. For the tenant/buyer: How is your financial situation? Do you look good on paper? How experienced are you? When a landlord is renting a space, they are truly loaning a space to a tenant and therefore needs to know that the tenant is credit worthy. For a landlord/seller: Do not be inflexible, but do insist on accountability. It will save you headaches and possible legal problems in the long run.
When a business is looking for a location, they have differing needs, so the questions they look at need to be flipped to tell a landlord or seller how to target for their locations. Putting yourself in the other person's shoes can give you valuable insight about your marketing strategies.
1. For the tenant/buyer: What is most important? Visibility, walk-by traffic, security, highway access etc. So as a landlord/seller: where are you? what are its benefits? how can you market them? By far this is number 1 on just about every tenant's list, and it's the least flexible thing about any location, so you need to know what your location's attributes are and play them up.
2. For the tenant/buyer: What is your budget? For the landlord/seller: How much do you need to derive from this transaction? What is your bottom line?
3. For the tenant/buyer: How many employees do you need to accomodate? What is the work environment you are hoping for? For the landlord/seller: How can you make your space the most flexible? What are ways to give the most bang for the buck?
4. For the tenant/buyer: How long of a lease are you comfortable with? What kind of lease are you comfortable with? Newer/smaller businesses are often confused by the nnn lease, more savvy tenants understand the need for passing through the expenses. For the landlord/seller: How flexible can you be in your leasing options?
5. For the tenant/buyer: How is your financial situation? Do you look good on paper? How experienced are you? When a landlord is renting a space, they are truly loaning a space to a tenant and therefore needs to know that the tenant is credit worthy. For a landlord/seller: Do not be inflexible, but do insist on accountability. It will save you headaches and possible legal problems in the long run.
Sunday, February 15, 2009
Real Estate Close-Up: Portland
Real Estate Close-Up: PortlandBy J.W. ELPHINSTONE, AP Business Writer J.w. Elphinstone, Ap Business Writer Fri Feb 13, 2:33 pm ET
If occupancy rates are high, it's a landlord's market, right?
Not in Portland, Ore., where property owners, fearful of the uncertain economy, are sweetening deals even though vacancies are well below national averages.
Some landlords are knocking off a chunk on rents just to keep tenants in place for the next five years. Others are calling tenants two years before lease expirations to persuade them to stay.
What raises eyebrows is that supply and demand in Portland's commercial real estate market isn't out of whack. New construction was mostly kept under control during the boom and demand has stayed steady.
If landlords are getting anxious in Portland, imagine the discounts property owners are giving in the hardest-hit markets like Las Vegas, Miami or the Inland Empire in California.
"Looking at Portland, it's a national trend. It's nothing unique to the city," said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services.
So what gives?
"It's all about butts in the seats and if you don't have butts in the seats, you don't have demand," said David Squire, an executive vice president at Grubb & Ellis Co. "So landlords are shorting rental rates."
Already, the national recession has left a mark. The Northwest city shed 18,000 jobs last year and it's expected to lose about that many this year, said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services. Portland's unemployment rate clocked in at 8.1 percent in December, and some major employers, including Intel and Nike, have announced massive layoffs this year.
All this is sending shivers through office landlords in Portland. They are giving up many of the gains they made in the past few years on rents just to keep their buildings full, Squire said. Since the end of 2004, asking rents jumped more than 14 percent for the best quality offices, Grubb & Ellis data showed. Now, landlords are discounting up to 15 percent, and sometimes more, on rents.
That normally wouldn't make sense in an office market with a 12 percent vacancy rate, well below the national average of 15 percent. The rate is even lower for the best quality buildings in the downtown at 6 percent. And the next wave of construction won't be delivered to the market until late 2010, so inventory is in check.
"The worst-case scenario should be flat rents," Squire said. "But landlords are jumping the gun. They're saying a tenant is better than no tenant at all."
Owners of shopping malls and strip centers are feeling similarly jittery. They have kissed a number of retailers goodbye because of bankruptcies. Wick's Furniture, Linens 'n' Things, Circuit City and Mervyn's all shuttered stores in Portland, said Marc Strabic, a senior associate at CB Richard Ellis Inc.
As a result, retail developers have tabled a host of projects for the next year or two. The only development on the immediate horizon is Progress Ridge Town Center, a grocery-anchored center in nearby Beaverton, Ore. It's expected to open at the end of 2009.
"Existing product is getting absorbed because the new projects were never built," Strabic said.
That has helped keep the retail vacancy rate low at about 6 percent, compared with the national average of 8.7 percent, Nadji said. He expects the rate to increase to 7 percent by the end of the year.
The city's policy of restricting sprawl limits retail zoning and makes it hard for big box retailers to find space, Strabic said. Even if retailers close stores, like Macy's, they often leave the Pacific Northwest ones open.
Meanwhile, the industrial market started losing momentum the second half of last year. Many manufacturers, the same ones that fueled growth just a year and a half ago, are downsizing their space needs, said Stuart Skaug, a senior associate at CB Richard Ellis.
But the vacancy rate is still hanging tough at 8.6 percent versus the average national vacancy of 10.1 percent. However, that rate is expected to climb to about 10 percent, Nadji said, because the industrial sector is wading through a hefty amount of new supply. Since 2006, about 8.2 million square feet of industrial space has come online, a construction pace Nadji calls "robust."
This has industrial landlords scrambling to lock in tenants for the long term. They're renewing leases early and giving a month's free rent or reductions in rent.
"It's not an easy pill to swallow," Skaug said, "but if it means you have a tenant in place for another five to 10 years, that's the best they can do."
Aside from the downtown where condos sprouted like weeds during the housing boom, Portland's apartment market is healthy with a 5 percent vacancy rate, Nadji said. The national vacancy rate for apartments stood at 6.7 percent at the end of the year.
But job losses will likely eat into rent growth this year and vacancy will inch up as renters double and triple up to save on rent. But the deterioration in the apartment market won't be as bad as in the office or retail markets, which will feel the worst of the recession.
"It's not going to be nearly as bad as many markets around the country," Nadji said, "but Portland won't be able to skirt the downturn."
Copyright © 2009 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.
Copyright © 2009 Yahoo! Inc. All rights reserved.
If occupancy rates are high, it's a landlord's market, right?
Not in Portland, Ore., where property owners, fearful of the uncertain economy, are sweetening deals even though vacancies are well below national averages.
Some landlords are knocking off a chunk on rents just to keep tenants in place for the next five years. Others are calling tenants two years before lease expirations to persuade them to stay.
What raises eyebrows is that supply and demand in Portland's commercial real estate market isn't out of whack. New construction was mostly kept under control during the boom and demand has stayed steady.
If landlords are getting anxious in Portland, imagine the discounts property owners are giving in the hardest-hit markets like Las Vegas, Miami or the Inland Empire in California.
"Looking at Portland, it's a national trend. It's nothing unique to the city," said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services.
So what gives?
"It's all about butts in the seats and if you don't have butts in the seats, you don't have demand," said David Squire, an executive vice president at Grubb & Ellis Co. "So landlords are shorting rental rates."
Already, the national recession has left a mark. The Northwest city shed 18,000 jobs last year and it's expected to lose about that many this year, said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services. Portland's unemployment rate clocked in at 8.1 percent in December, and some major employers, including Intel and Nike, have announced massive layoffs this year.
All this is sending shivers through office landlords in Portland. They are giving up many of the gains they made in the past few years on rents just to keep their buildings full, Squire said. Since the end of 2004, asking rents jumped more than 14 percent for the best quality offices, Grubb & Ellis data showed. Now, landlords are discounting up to 15 percent, and sometimes more, on rents.
That normally wouldn't make sense in an office market with a 12 percent vacancy rate, well below the national average of 15 percent. The rate is even lower for the best quality buildings in the downtown at 6 percent. And the next wave of construction won't be delivered to the market until late 2010, so inventory is in check.
"The worst-case scenario should be flat rents," Squire said. "But landlords are jumping the gun. They're saying a tenant is better than no tenant at all."
Owners of shopping malls and strip centers are feeling similarly jittery. They have kissed a number of retailers goodbye because of bankruptcies. Wick's Furniture, Linens 'n' Things, Circuit City and Mervyn's all shuttered stores in Portland, said Marc Strabic, a senior associate at CB Richard Ellis Inc.
As a result, retail developers have tabled a host of projects for the next year or two. The only development on the immediate horizon is Progress Ridge Town Center, a grocery-anchored center in nearby Beaverton, Ore. It's expected to open at the end of 2009.
"Existing product is getting absorbed because the new projects were never built," Strabic said.
That has helped keep the retail vacancy rate low at about 6 percent, compared with the national average of 8.7 percent, Nadji said. He expects the rate to increase to 7 percent by the end of the year.
The city's policy of restricting sprawl limits retail zoning and makes it hard for big box retailers to find space, Strabic said. Even if retailers close stores, like Macy's, they often leave the Pacific Northwest ones open.
Meanwhile, the industrial market started losing momentum the second half of last year. Many manufacturers, the same ones that fueled growth just a year and a half ago, are downsizing their space needs, said Stuart Skaug, a senior associate at CB Richard Ellis.
But the vacancy rate is still hanging tough at 8.6 percent versus the average national vacancy of 10.1 percent. However, that rate is expected to climb to about 10 percent, Nadji said, because the industrial sector is wading through a hefty amount of new supply. Since 2006, about 8.2 million square feet of industrial space has come online, a construction pace Nadji calls "robust."
This has industrial landlords scrambling to lock in tenants for the long term. They're renewing leases early and giving a month's free rent or reductions in rent.
"It's not an easy pill to swallow," Skaug said, "but if it means you have a tenant in place for another five to 10 years, that's the best they can do."
Aside from the downtown where condos sprouted like weeds during the housing boom, Portland's apartment market is healthy with a 5 percent vacancy rate, Nadji said. The national vacancy rate for apartments stood at 6.7 percent at the end of the year.
But job losses will likely eat into rent growth this year and vacancy will inch up as renters double and triple up to save on rent. But the deterioration in the apartment market won't be as bad as in the office or retail markets, which will feel the worst of the recession.
"It's not going to be nearly as bad as many markets around the country," Nadji said, "but Portland won't be able to skirt the downturn."
Copyright © 2009 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.
Copyright © 2009 Yahoo! Inc. All rights reserved.
Friday, February 13, 2009
Marketing 2009 Style
In 2009, the marketing landscape has altered, we are cold calling, we are networking, we are pitching and we are spending money. Marketing properties is a job again. Your property should be on at least two Web Sites, there should be a targeted marketing effort, your agent should be well connected in the community, and believe it or not, good signage is still our best tool. Your agent should also be honest with you about your market placement, are you at the right price? Or is your agent just saying what you want to hear and leaving you overpriced in a down market? Or are you not listening to their advice? It's hard to hear and to tell bad news. But product placement and marketing are the tricks today. Buyers and tenants are not driven by emotion, it's all economics. If you hear otherwise, let me know.
The hardest part -- none of this will guarantee a tenant or a buyer, but if you mix good marketing with the right product at the right price, you've got a place to start and your chances of a lease or sale will greatly improve.
The hardest part -- none of this will guarantee a tenant or a buyer, but if you mix good marketing with the right product at the right price, you've got a place to start and your chances of a lease or sale will greatly improve.
Tuesday, February 3, 2009
What is a Tenant Representative?
1. As the title implies, a tenant rep represents the tenant’s side in a negotiation for a lease.
A good tenant's rep can also be the landlord's rep, but should do all of the following for the tenant's side of the table.
2. A real and ethical tenant rep will send the tenant an exhaustive list of all of the listings that might suit the tenant.
3. A tenant rep will show the tenant the properties they are interested in and help them to analyze the location for their particular business.
4. A good tenant rep will be knowledgeable about the community and its business needs, and if she/he is not, they will be honest about it and bring in professionals to assist the tenant in their decision making.
5. A tenant rep will be knowledgeable about the leasing market and will show the tenant comparable leasing situations that will help the tenant and the rep to determine a reasonable lease rate for the properties of interest.
6. A tenant rep will freely interpret the language of leasing to the tenant. Such as “what is a nnn lease?”
7. A tenant rep will draft a letter of intent outlining the tenant’s proposal to the landlord. The letter of intent is an industry standard way to begin negotiations on a leased space.
8. A tenant rep will put the tenant’s interests first and negotiate reasonably and fairly on behalf of the tenant.
9. A tenant rep will be familiar with leases and their language and help review the lease the tenant is expected to sign. Then the tenant rep will recommend that the tenant take the lease to their attorney for additional review.
10. A tenant rep will make referrals to reputable attorneys, inspectors and contractors.
11. A tenant rep is most often paid by the landlord with whom they negotiate the lease, but sometimes the tenant will negotiate a lease with a landlord who does not have agency representation of their own and in this case, the tenant will pay the rep’s fee.
12. Ideally the work a tenant rep does is governed by a contract into which both parties agree to work exclusively together to accomplish the tenant’s goals.
A good tenant's rep can also be the landlord's rep, but should do all of the following for the tenant's side of the table.
2. A real and ethical tenant rep will send the tenant an exhaustive list of all of the listings that might suit the tenant.
3. A tenant rep will show the tenant the properties they are interested in and help them to analyze the location for their particular business.
4. A good tenant rep will be knowledgeable about the community and its business needs, and if she/he is not, they will be honest about it and bring in professionals to assist the tenant in their decision making.
5. A tenant rep will be knowledgeable about the leasing market and will show the tenant comparable leasing situations that will help the tenant and the rep to determine a reasonable lease rate for the properties of interest.
6. A tenant rep will freely interpret the language of leasing to the tenant. Such as “what is a nnn lease?”
7. A tenant rep will draft a letter of intent outlining the tenant’s proposal to the landlord. The letter of intent is an industry standard way to begin negotiations on a leased space.
8. A tenant rep will put the tenant’s interests first and negotiate reasonably and fairly on behalf of the tenant.
9. A tenant rep will be familiar with leases and their language and help review the lease the tenant is expected to sign. Then the tenant rep will recommend that the tenant take the lease to their attorney for additional review.
10. A tenant rep will make referrals to reputable attorneys, inspectors and contractors.
11. A tenant rep is most often paid by the landlord with whom they negotiate the lease, but sometimes the tenant will negotiate a lease with a landlord who does not have agency representation of their own and in this case, the tenant will pay the rep’s fee.
12. Ideally the work a tenant rep does is governed by a contract into which both parties agree to work exclusively together to accomplish the tenant’s goals.
Thursday, January 22, 2009
Empty Space and Lease Rates in Thurston County
Leasing is a tricky deal. Landlords need to keep their rates at a level pursuant to the value at which the building was purchased. But tenants need to keep their rates at a level with the income of their business. When these two goals are at odds, the result is generally empty space.
This year, I am counseling my landlords to review their rates, think about what they can live with that will make their properties the most attractive in the market. The number of "for lease" signs around town is not a mirage. We have a glut of empty space. It used to be just office space, but now I'm seeing more and more retail space as well. Warehouse space is leasing, but mainly just the smaller spaces. We have a huge amount of large empty warehouses out there as well.
If you want your space to float to the top, ask me what it will take... I am more than happy to sit down with you and go over your leasing plan. Each space is individual, each location special, leasing is not a one size fits all marketing effort. So tailor your property appropriately, and you can attract those few tenants floating around looking for your space.
This year, I am counseling my landlords to review their rates, think about what they can live with that will make their properties the most attractive in the market. The number of "for lease" signs around town is not a mirage. We have a glut of empty space. It used to be just office space, but now I'm seeing more and more retail space as well. Warehouse space is leasing, but mainly just the smaller spaces. We have a huge amount of large empty warehouses out there as well.
If you want your space to float to the top, ask me what it will take... I am more than happy to sit down with you and go over your leasing plan. Each space is individual, each location special, leasing is not a one size fits all marketing effort. So tailor your property appropriately, and you can attract those few tenants floating around looking for your space.
Wednesday, January 21, 2009
Buildings in Downtown Olympia
This morning I was asked if I knew any buildings in downtown Olympia for sale. If I could get $1 for every time someone asks me this question, I would be rich. There is a myth that downtown Olympia is not doing well. There are only 2 buildings in downtown Olympia listed as on the market right now. Both of them are close to going to auction, both of them are huge, both of them are overpriced for the amount of work required, neither of them would work for a bank loan.
My 2 cents.
Finding a building in downtown Olympia IS possible, but it is all about who you or your agent knows and patience. You need to have a good relationship with someone who does this for a living. We are the only ones who have the patience and the reason to keep checking back in with the building owners. So, find an agent who is connected to building owners downtown, put the word out quietly, and then wait.
My 2 cents.
Finding a building in downtown Olympia IS possible, but it is all about who you or your agent knows and patience. You need to have a good relationship with someone who does this for a living. We are the only ones who have the patience and the reason to keep checking back in with the building owners. So, find an agent who is connected to building owners downtown, put the word out quietly, and then wait.
Tuesday, January 20, 2009
Thurston County Economy 101
Well, it's January 2009, and for better or worst, we have entered a new time in our economic vitality.
In my travels around the community and various civic involvements, I am frequently asked, "how's the commercial market?"
Since entering this arena, the question has pervaded my life, and I have various levels of answers, so this morning when contemplating how I can most help my clients and friends using my knowledge of the market and research skills, I decided I would dedicate this blog to keeping everyone abreast of my observations and insights on the Thurston County commercial market.
I would like to start this ongoing process with a little description of the basic economics of this market.
Olympia is the Capitol of the State of Washington. It is home to two four-year colleges and one two-year college. Much of the state government is located in Olympia, which makes Thurston County home to its employees. We are also just south of one of the largest military installations in the country, Fort Lewis. We are 90 minutes from the Pacific Ocean and roughly 90 minutes from the Cascade mountain range. We have a stable workforce, a stable economy and high quality of life. Our values have not dropped like others, but we are feeling some of the crunch of the international economic crisis. Our unemployment rate is fairly low and fairly steady and even it has risen to 5.8 percent in the past three months.
All of that said, our home values have not dropped anywhere near the national average and our commercial real estate has slowed, but less signficantly then elsewhere. If you are a buyer looking for a deal, they are out there if you look hard and work with an agent who has your best interests at heart. If you are a tenant looking to expand or contract your space, now is the time. If you are a seller, and you can hold on. HOLD on. If you need to sell, be realistic, and your property will move, maybe even quickly.
In my travels around the community and various civic involvements, I am frequently asked, "how's the commercial market?"
Since entering this arena, the question has pervaded my life, and I have various levels of answers, so this morning when contemplating how I can most help my clients and friends using my knowledge of the market and research skills, I decided I would dedicate this blog to keeping everyone abreast of my observations and insights on the Thurston County commercial market.
I would like to start this ongoing process with a little description of the basic economics of this market.
Olympia is the Capitol of the State of Washington. It is home to two four-year colleges and one two-year college. Much of the state government is located in Olympia, which makes Thurston County home to its employees. We are also just south of one of the largest military installations in the country, Fort Lewis. We are 90 minutes from the Pacific Ocean and roughly 90 minutes from the Cascade mountain range. We have a stable workforce, a stable economy and high quality of life. Our values have not dropped like others, but we are feeling some of the crunch of the international economic crisis. Our unemployment rate is fairly low and fairly steady and even it has risen to 5.8 percent in the past three months.
All of that said, our home values have not dropped anywhere near the national average and our commercial real estate has slowed, but less signficantly then elsewhere. If you are a buyer looking for a deal, they are out there if you look hard and work with an agent who has your best interests at heart. If you are a tenant looking to expand or contract your space, now is the time. If you are a seller, and you can hold on. HOLD on. If you need to sell, be realistic, and your property will move, maybe even quickly.
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