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Commercial Real Estate Archives

Uncertainty may be cooling the CRE market

Economic and political uncertainties are continuing to suppress commercial real estate values in California and around the country according to a growing number of industry experts. Commercial property prices dropped by 0.3 percent in June, and falls were observed in all five core property segments. The decline marks the second consecutive month that values on the online real estate company Ten-X's pricing index have fallen. However, commercial property prices remain near record highs and have more than doubled since 2010 according to Real Capital Analytics.

Performing due diligence before buying commercial property

Prospective purchasers of California commercial real estate most likely do not look forward to performing due diligence, but they make the effort because they know that taking shortcuts in this area can cast a long shadow. Poring over documents may not provide much in the way of excitement, but the information this kind of research can yield about the legal, financial and physical condition of a property could be crucial.

CRE refinancing growing more complex

California commercial real estate developers may already have felt the impact of credit constraints and Dodd-Frank regulations on their ability to refinance their projects. Hesitant lenders, a scarcity of loan funds and growing piles of required paperwork have made it a difficult, time-consuming process to refinance commercial real estate.

Commercial property loans up, despite higher interest rates

Those who are thinking about purchasing commercial real estate in California may be encouraged to learn that commercial real estate lending activity is strong amidst growing interest rates. In fact, commercial lending is growing faster than other types of loans, such as retail and unsecured loans.

Sales figures suggest that CRE markets are cooling

The commercial real estate markets in major California cities like Los Angeles, San Diego and San Francisco have been extremely active in recent years, but property sales data for the first quarter of 2017 suggests that investor enthusiasm is waning. First-quarter property sales in New York City were down by 58 percent compared with the same period a year ago, according to data released by the brokerage firm Cushman & Wakefield. Analysts say that overbuilding and political uncertainty may be to blame.

Growing businesses don't always have to relocate

As many California entrepreneurs can probably attest, it can be challenging to sell commercial real estate. So business owners who have discovered that their enterprises are outgrowing their current facilities might want to consider a few other alternative plans before making the huge commitment to move.

Optimism about CRE persists despite interest rate hikes

Many California real estate developers have prospered in recent years as major markets like Los Angeles and San Francisco have thrived. Commercial property prices in other gateway cities have also risen sharply since the 2008 financial crisis, and both entrepreneurs and leading executives expect this rapid growth to continue. However, government regulators have raised questions about lax underwriting standards, and the Federal Reserve has once again started to raise interest rates to keep inflation in check and curb risky borrowing.

California commercial real estate shortage most acute in Pasadena

A shortage of available office and retail space is impacting prices in several California markets, and rents in areas like Pasadena have increased by as much as 25 percent over the last 12 months as a result. Much has been written by industry experts in recent years about the struggling and sluggish retail sector, but brokers report that vacant stores in Pasadena are rarely available for long. The vacancy rate for Class A office space in the city sits at 12 percent, but a lack of new construction has caused Class B and Class C vacancies to fall to just 6 percent.

How rising interest rates could benefit California investors

According to reports, in December 2016, the Federal Open Market Committee voted to raise interest rates 25 basis points and plans to raise rates three more times during 2017. While the market had been expecting the increase, many commercial real estate investors have concerns that the change may bring about a negative impact on the commercial real estate market. However, these fears may be unfounded.

Southeast real estate boom attracts investors across the US

California investors may be interested to know that the Southeast region of the U.S. is experiencing an unprecedented economic boom. This has led to a record number of real estate closings for developers in the region, according to industry insiders.

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