Check out a training opportunity for investors, what to discuss when renewing a lease, and a few other things to read and learn. Don't miss our May edition of Business Success newsletter!
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Tuesday, May 28, 2013
Retail Rent Growth Finally Takes Root Across U.S. Metros
Change is on its way in Retail rent. Read about it below...
Absorption, Vacancy Benchmarks Continue to Drift Sideways As Retailers Shake Out Closed Stores
Following a recent string of relentlessly unexciting market trends in retail real estate over the past several quarters comes this distinctly positive news for retail property owners -- quoted asking rents have finally turned upward across all retail property types in the U.S. for the first time since 2008.
"This is a symbolic victory," said CoStar real estate economist Ryan McCullough, who co-presented the First-Quarter 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar's analytics and economic forecasting company.
This reversal of bad fortune for landlords, which started with rental rate increases in higher-end institutional retail and a few scattered metros of several quarters ago, is the culmination of 2 ½ years of steady fundamentals recovery in retail, he said.
"We’re finally to the point where the average asset is showing steady rent growth again," McCullough said.
Mulvee made note that the 70% of U.S. retail markets that reported positive rent growth during the first quarter represents "a true turning point for the market" into a broad-based recovery.
Without getting too carried away, it should be clearly noted that plenty of challenges remain for owners, tenants and retailers. Rents aren't going to shoot upward and fundamentals are continuing to improve slowly or move sideways.
Muted absorption appears to be the new normal, with a light 17 million square feet in net absorption for the first quarter, down slightly from a year ago, as retailers continue to shed stores and consolidate into stronger shopping centers. Leading year-over-year demand growth are western markets such as Dallas-Fort Worth, Phoenix, Denver, Salt Lake City and San Diego.
With little new construction, vacancies continue to edge downward, with progress still slowed by about 19 million square feet of store closures tracked by CoStar - space shed by such chains as Fashion Bug and Big Lots, as well as hangover from already downsized retailers like Barnes & Noble and Blockbuster.
CoStar expects construction to pick up a bit in 2013 as shifting population opens new pockets of wealth. The first developments to come back have been outlet centers, with six centers under construction across the U.S. and another dozen in the planning stages - and some shopping centers being converted to outlet space.
Power centers and malls are at the lower end of the vacancy spectrum at about 5.9%, while neighborhood centers are starting to rebound, with total store openings exceeding closings by a fairly wide margin.
Demand for malls and especially power centers by category killer retailers such as Best Buy and Staples remains under attack by e-commerce, including the advent of Amazon.com's same-day delivery, Mulvee said. When new construction ramps up again, stronger retailers will gravitate toward the newer centers -- and power centers are like to go dark as a result, McCullough said, adding, "In 10 years, we may be saying the same thing about dead power centers as we do today about dead malls."
The broadening scope of the recovery was reflected in the sentiments of webinar attendees surveyed by CoStar following the retail market presentation:
Lisa Diehl of Diehl and Partners, LLC, of Edina, MN, said the climate for retail investment is strong in the Minneapolis market.
"We had our issues during the downturn, but we're recovering. Everyone I speak with is busier than they were last year, and have done better through May than they did in the entirety of last year. That's a positive sign of activity picking up," Diehl said.
That said, prospects are still playing it safe, she added.
"Landlords are trying to push the rents higher if they can get it. There's still some uncertainly, but things are improving," Diehl said.
John E. Crump, director with HFF in Los Angeles and an investment sales broker mainly focused on California, Arizona and Nevada markets, picked up especially on Phoenix’s relative outperformance on job growth. He found the discussion of the return of the wealth effect and positive rent growth for the first time nationally since 2008 to be of particular note.
"In the California, Nevada and Arizona markets, we are seeing much fewer distressed sales and more stabilized assets," Crump said. "There is a notable lack of product versus supply, and coupled with the ample available low price debt, pricing is at or near peak for coastal areas and improving in the Inland Empire, Las Vegas and Arizona - areas clobbered by the housing downturn."
Almost all property types are performing well with grocery/drug and top-tier malls in highest demand, and other property types following suit improved pricing.
"We foresee continued strength in the next three quarters as investor demand greatly exceeds available supply," Crump said.
"While we have room to grow, I like the favorable and consistent 'North Easterly' trends we are seeing," said Brian Capo, associate with the Marcus & Millichap office in Orlando, FL, another housing-bust market. "Lots or tenants are expanding into Florida, and this will help curb our retail vacancies."
On the investment front, the single-tenant net lease market in properties with national credit tenants is simply "white hot," with numbers surpassing even the mid-2000s boom, according to Capo.
"When a true triple-net deal is put on the market, it does not last long," Capo said. "Investors are aggressive, and meeting the seller's price points. Capitalization rate have compressed rapidly over the last 60 days, in some cases by 50 basis points, he added.
By Randyl Drummer - CoStar
Absorption, Vacancy Benchmarks Continue to Drift Sideways As Retailers Shake Out Closed Stores
Following a recent string of relentlessly unexciting market trends in retail real estate over the past several quarters comes this distinctly positive news for retail property owners -- quoted asking rents have finally turned upward across all retail property types in the U.S. for the first time since 2008.
"This is a symbolic victory," said CoStar real estate economist Ryan McCullough, who co-presented the First-Quarter 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar's analytics and economic forecasting company.
This reversal of bad fortune for landlords, which started with rental rate increases in higher-end institutional retail and a few scattered metros of several quarters ago, is the culmination of 2 ½ years of steady fundamentals recovery in retail, he said.
"We’re finally to the point where the average asset is showing steady rent growth again," McCullough said.
Mulvee made note that the 70% of U.S. retail markets that reported positive rent growth during the first quarter represents "a true turning point for the market" into a broad-based recovery.
Without getting too carried away, it should be clearly noted that plenty of challenges remain for owners, tenants and retailers. Rents aren't going to shoot upward and fundamentals are continuing to improve slowly or move sideways.
Muted absorption appears to be the new normal, with a light 17 million square feet in net absorption for the first quarter, down slightly from a year ago, as retailers continue to shed stores and consolidate into stronger shopping centers. Leading year-over-year demand growth are western markets such as Dallas-Fort Worth, Phoenix, Denver, Salt Lake City and San Diego.
With little new construction, vacancies continue to edge downward, with progress still slowed by about 19 million square feet of store closures tracked by CoStar - space shed by such chains as Fashion Bug and Big Lots, as well as hangover from already downsized retailers like Barnes & Noble and Blockbuster.
CoStar expects construction to pick up a bit in 2013 as shifting population opens new pockets of wealth. The first developments to come back have been outlet centers, with six centers under construction across the U.S. and another dozen in the planning stages - and some shopping centers being converted to outlet space.
Power centers and malls are at the lower end of the vacancy spectrum at about 5.9%, while neighborhood centers are starting to rebound, with total store openings exceeding closings by a fairly wide margin.
Demand for malls and especially power centers by category killer retailers such as Best Buy and Staples remains under attack by e-commerce, including the advent of Amazon.com's same-day delivery, Mulvee said. When new construction ramps up again, stronger retailers will gravitate toward the newer centers -- and power centers are like to go dark as a result, McCullough said, adding, "In 10 years, we may be saying the same thing about dead power centers as we do today about dead malls."
The broadening scope of the recovery was reflected in the sentiments of webinar attendees surveyed by CoStar following the retail market presentation:
Lisa Diehl of Diehl and Partners, LLC, of Edina, MN, said the climate for retail investment is strong in the Minneapolis market.
"We had our issues during the downturn, but we're recovering. Everyone I speak with is busier than they were last year, and have done better through May than they did in the entirety of last year. That's a positive sign of activity picking up," Diehl said.
That said, prospects are still playing it safe, she added.
"Landlords are trying to push the rents higher if they can get it. There's still some uncertainly, but things are improving," Diehl said.
John E. Crump, director with HFF in Los Angeles and an investment sales broker mainly focused on California, Arizona and Nevada markets, picked up especially on Phoenix’s relative outperformance on job growth. He found the discussion of the return of the wealth effect and positive rent growth for the first time nationally since 2008 to be of particular note.
"In the California, Nevada and Arizona markets, we are seeing much fewer distressed sales and more stabilized assets," Crump said. "There is a notable lack of product versus supply, and coupled with the ample available low price debt, pricing is at or near peak for coastal areas and improving in the Inland Empire, Las Vegas and Arizona - areas clobbered by the housing downturn."
Almost all property types are performing well with grocery/drug and top-tier malls in highest demand, and other property types following suit improved pricing.
"We foresee continued strength in the next three quarters as investor demand greatly exceeds available supply," Crump said.
"While we have room to grow, I like the favorable and consistent 'North Easterly' trends we are seeing," said Brian Capo, associate with the Marcus & Millichap office in Orlando, FL, another housing-bust market. "Lots or tenants are expanding into Florida, and this will help curb our retail vacancies."
On the investment front, the single-tenant net lease market in properties with national credit tenants is simply "white hot," with numbers surpassing even the mid-2000s boom, according to Capo.
"When a true triple-net deal is put on the market, it does not last long," Capo said. "Investors are aggressive, and meeting the seller's price points. Capitalization rate have compressed rapidly over the last 60 days, in some cases by 50 basis points, he added.
By Randyl Drummer - CoStar
Tuesday, March 26, 2013
10 Ways to Make Good Tenants Stay
As a landlord, retaining good tenants should be one of the biggest priorities. Good renters make great assets.
The good news is that keeping great renters isn’t too hard. Here are ten things to do to keep good tenants happy and in no rush to move:
1. Respond quickly to complaints about noise or reports of criminal activity, such as drug dealing.
Always enforce rules on noise. If you are aware of any crimes taking place at the rental property, take action immediately. Consult an attorney, or consider hiring a property management company that includes evictions in its services.
2. Schedule maintenance and repairs at times convenient for the tenants, and let them know in advance.
Minimize the impact of repairs and maintenance by scheduling them at the times the renters are least likely to be around, typically between 9 and 5, Monday through Friday. Let the tenants know in advance when repair work is being done, and why.
3. Provide designated parking spots and enforce parking rules.
Having a parking spot with a short walking distance to home is very important for many tenants. Assign parking spots and enforce parking rules. Send warning letters to tenants who break the rules and have their cars towed if they ignore your warning. Also, make sure the parking is well-marked and sufficient guest parking.
4. Follow through on repair requests and other commitments.
It’s simple: do what you say you’ll do. Recognize that all tenants want their repairs handled promptly, efficiently, and predictably. Remember that many tenants are “renters by choice“. They prefer to rent rather than own partly because they want someone else to be responsible for repairs. Have a repair and maintenance process that helps to consistently meet or exceed tenant expectations.
5. Give the tenants advance notice of upcoming inconveniences that you’re aware of.
If you’re aware of upcoming road closures or a planned power outage, consider sending out a newsletter, email, or a Facebook update to inform the tenants.
6. Understand that tenants want to feel safe at home.
Make sure that any outdoor areas used by tenants at night, such as a parking areas, paths, and entries, are well-lit. Keep on top of preventative maintenance and repairs.
7. Make sure all tenants follow the House Rules.
Good tenants are good neighbors. In return, they want the same consideration. They will follow reasonable rules for the property, outlined in the lease. All of your tenants should read and sign a copy of your rules when they execute the lease. Let the tenants know that rules will be enforced, and eviction can be used if necessary.
8. If you are allowing pets, make sure owners clean up after them!
Tenant retention has been shown to improve if pets are allowed, and certainly there are some great tenants out there who are also animal lovers. If tenants are allowed to keep pets, make sure the lease outlines that the tenant is responsible for all pet damages and for cleaning up after the pets. It is normal to require an additional pet deposit or additional rent.
9. Be polite, courteous, and professional.
Recognize that being a landlord requires great customer service skills. When the phone rings and the call is from a tenant who is paying thousands of dollars a year, speak politely and be helpful.
10. Create opportunities to appreciate the good tenants.
Take time to say “thank you” or send thank-you cards when appropriate. Gestures such as these go a long way in making your good tenants feel welcome and appreciated.
Good tenants know they are good tenants, and they expect to be treated that way. It’s worth the extra effort to keep them. Especially when the rent is paid on time and the property is well maintained.
REI Liaison is a full service residential Property Management and Leasing company serving the St. Louis, Missouri area.
by REI Liaison Property Management
The good news is that keeping great renters isn’t too hard. Here are ten things to do to keep good tenants happy and in no rush to move:
1. Respond quickly to complaints about noise or reports of criminal activity, such as drug dealing.
Always enforce rules on noise. If you are aware of any crimes taking place at the rental property, take action immediately. Consult an attorney, or consider hiring a property management company that includes evictions in its services.
2. Schedule maintenance and repairs at times convenient for the tenants, and let them know in advance.
Minimize the impact of repairs and maintenance by scheduling them at the times the renters are least likely to be around, typically between 9 and 5, Monday through Friday. Let the tenants know in advance when repair work is being done, and why.
3. Provide designated parking spots and enforce parking rules.
Having a parking spot with a short walking distance to home is very important for many tenants. Assign parking spots and enforce parking rules. Send warning letters to tenants who break the rules and have their cars towed if they ignore your warning. Also, make sure the parking is well-marked and sufficient guest parking.
4. Follow through on repair requests and other commitments.
It’s simple: do what you say you’ll do. Recognize that all tenants want their repairs handled promptly, efficiently, and predictably. Remember that many tenants are “renters by choice“. They prefer to rent rather than own partly because they want someone else to be responsible for repairs. Have a repair and maintenance process that helps to consistently meet or exceed tenant expectations.
5. Give the tenants advance notice of upcoming inconveniences that you’re aware of.
If you’re aware of upcoming road closures or a planned power outage, consider sending out a newsletter, email, or a Facebook update to inform the tenants.
6. Understand that tenants want to feel safe at home.
Make sure that any outdoor areas used by tenants at night, such as a parking areas, paths, and entries, are well-lit. Keep on top of preventative maintenance and repairs.
7. Make sure all tenants follow the House Rules.
Good tenants are good neighbors. In return, they want the same consideration. They will follow reasonable rules for the property, outlined in the lease. All of your tenants should read and sign a copy of your rules when they execute the lease. Let the tenants know that rules will be enforced, and eviction can be used if necessary.
8. If you are allowing pets, make sure owners clean up after them!
Tenant retention has been shown to improve if pets are allowed, and certainly there are some great tenants out there who are also animal lovers. If tenants are allowed to keep pets, make sure the lease outlines that the tenant is responsible for all pet damages and for cleaning up after the pets. It is normal to require an additional pet deposit or additional rent.
9. Be polite, courteous, and professional.
Recognize that being a landlord requires great customer service skills. When the phone rings and the call is from a tenant who is paying thousands of dollars a year, speak politely and be helpful.
10. Create opportunities to appreciate the good tenants.
Take time to say “thank you” or send thank-you cards when appropriate. Gestures such as these go a long way in making your good tenants feel welcome and appreciated.
Good tenants know they are good tenants, and they expect to be treated that way. It’s worth the extra effort to keep them. Especially when the rent is paid on time and the property is well maintained.
REI Liaison is a full service residential Property Management and Leasing company serving the St. Louis, Missouri area.
by REI Liaison Property Management
Thursday, September 13, 2012
Transaction Volume at Mid-Year Trending Lower
Real estate investors have responded to an especially disappointing year economically (i.e., market uncertainty, sluggish GDP growth, and the lackluster job market) by curtailing their buying activity—or waiting on the sidelines entirely. Consequently, transaction volume during 2Q 2012 has retreated back to near the level observed in 3Q 2010. This reverses the trend seen over the last few years, where sales volumes increased throughout the calendar year. If this trend persists over the second half of 2012, transaction volume will come in below last year’s levels. A definite indicator of lukewarm investor sentiment.
Cap Rates on the Rise
Cap rates have been trending slightly upward for office deals and remain essentially unchanged from one year ago for apartments, while cap rates for retail have been declining. Still, cap rate spreads—calculated as the difference between the 12-month rolling cap rates and the 10-year Treasury yield—for all three sectors have been rising (though the spread in apartment and office are rising faster than the spread in retail). Why? Blame the global phenomenon of investor flight to quality and the safety in capital markets for the record-low levels reached by U.S. Treasuries during the second quarter.
Who’s buying what, where
Investors continue to be a discriminating bunch. Apartment deals this past quarter tended to show a preference for high-priced, high-quality assets primarily focused in a relatively small number of primary gateway markets. However, high prices have some investors shying away from buying existing apartments and considering other alternatives, such as development. Office pricing has also become expensive over the last few years, and it’s likely this development along with the fact that economic growth continues to disappoint and uncertainty in the marketplace persists that investor behavior is being affected. Because of the weakness in retail property fundamentals, selection bias is even stronger for retail than the other major sectors, with a select few high-quality properties trading.
Investments in Top Markets Come at a Price
A comparison of the volume-weighted 12-month rolling cap rate for the top 10 markets by transaction volume and the volume-weighted 12-month rolling cap rate for all other markets clearly shows that investors are willing to pay a cap rate premium to be in the markets with the largest volumes. This premium has been fairly consistent over the last five years. Therefore, although risk aversion persists in the current transactions market, investors prefer deals in these high-volume markets during all types of economic environments, not just the distressed environments of today. The top 10 retail markets present a somewhat different picture, however. The risk premium for high-volume retail markets is not only inconsistent; it is actually negative during certain periods, including the most recent quarter. Local factors– the trade area, the economic and demographic make-up of the consumers in the trade area, and often the characteristics of the property itself—are most important. Consequently, investors focus on local factors while less-important metro-level factors will be largely ignored and do not translate into a transaction premium. What distinguishes a top 10 market? Generally, they have better liquidity—they are large, institutional markets with many properties and a large number of market participants. They also have better market fundamentals and economic prospects.
The Year Ahead
Little is expected to change this year, particularly since continued slow economic growth is forecast. Selection bias in the market should remain as entrenched as ever, even with cap rates ticking up slightly. And, with the recovery in fundamentals failing to spur an interest in a wider swath of the market, expect the transaction volume to remain restrained over the latter half of the year.
Source: ReisReports Connie Vitucci
Cap rates have been trending slightly upward for office deals and remain essentially unchanged from one year ago for apartments, while cap rates for retail have been declining. Still, cap rate spreads—calculated as the difference between the 12-month rolling cap rates and the 10-year Treasury yield—for all three sectors have been rising (though the spread in apartment and office are rising faster than the spread in retail). Why? Blame the global phenomenon of investor flight to quality and the safety in capital markets for the record-low levels reached by U.S. Treasuries during the second quarter.
Who’s buying what, where
Investors continue to be a discriminating bunch. Apartment deals this past quarter tended to show a preference for high-priced, high-quality assets primarily focused in a relatively small number of primary gateway markets. However, high prices have some investors shying away from buying existing apartments and considering other alternatives, such as development. Office pricing has also become expensive over the last few years, and it’s likely this development along with the fact that economic growth continues to disappoint and uncertainty in the marketplace persists that investor behavior is being affected. Because of the weakness in retail property fundamentals, selection bias is even stronger for retail than the other major sectors, with a select few high-quality properties trading.
Investments in Top Markets Come at a Price
A comparison of the volume-weighted 12-month rolling cap rate for the top 10 markets by transaction volume and the volume-weighted 12-month rolling cap rate for all other markets clearly shows that investors are willing to pay a cap rate premium to be in the markets with the largest volumes. This premium has been fairly consistent over the last five years. Therefore, although risk aversion persists in the current transactions market, investors prefer deals in these high-volume markets during all types of economic environments, not just the distressed environments of today. The top 10 retail markets present a somewhat different picture, however. The risk premium for high-volume retail markets is not only inconsistent; it is actually negative during certain periods, including the most recent quarter. Local factors– the trade area, the economic and demographic make-up of the consumers in the trade area, and often the characteristics of the property itself—are most important. Consequently, investors focus on local factors while less-important metro-level factors will be largely ignored and do not translate into a transaction premium. What distinguishes a top 10 market? Generally, they have better liquidity—they are large, institutional markets with many properties and a large number of market participants. They also have better market fundamentals and economic prospects.
The Year Ahead
Little is expected to change this year, particularly since continued slow economic growth is forecast. Selection bias in the market should remain as entrenched as ever, even with cap rates ticking up slightly. And, with the recovery in fundamentals failing to spur an interest in a wider swath of the market, expect the transaction volume to remain restrained over the latter half of the year.
Source: ReisReports Connie Vitucci
Tuesday, June 12, 2012
Going Mobile
I came across this article which I think has some good points to it.
Here is a piece of it.
Going Green | American Apartment Owners Association
By Brett D Furniss
What does this consumer love affair with mobile phones mean to property managers? It means we better get in the game in the mobile realm. Regular websites have worked really well for a while, but change has come again. New renters are going to want to use their smart phones to search for rentals near them (aided by GPS), fill out rental applications, pay application fees, and put down deposits. They want the whole rental process available from their mobile phones.
What specifically does this mean? It means we better have mobile websites that allow them to do this; the mobile websites need to include only succinct information potential renters would want when on the go. It also means we need a mobile application (a custom company “app”) that customers can put on their devices so we own some real estate on their phones. Trends show that home internet connections are on the way of landline phones; the new battleground is the mobile phone. We need to be on as many as possible.
A mobile website is critical when consumers search for property management companies from their smart phones. Will yours come up? If it does, can consumers easily find rental homes, contact you (even text you!), and do everything you want them to do (like they can when you see them in your office or when they are in front of their home computer?)
An app is critical to sealing the relationship with customers. How can they remember you when they are on their mobile phones? Your app (with your company logo) sitting with the rest of the apps they use everyday is a good start. This is a good way to build mindshare and also to make it easy for your customers to contact you and refer you to their friends. Not an apps believer? Apps are set to be a $36B business by 2015- a lot of people use them and will be using them!
Change is hard, but the mobile revolution is not going away. If making a property management company last long term is the goal, mobile websites and apps are now “must-haves”!
Here is a piece of it.
Going Green | American Apartment Owners Association
By Brett D Furniss
What does this consumer love affair with mobile phones mean to property managers? It means we better get in the game in the mobile realm. Regular websites have worked really well for a while, but change has come again. New renters are going to want to use their smart phones to search for rentals near them (aided by GPS), fill out rental applications, pay application fees, and put down deposits. They want the whole rental process available from their mobile phones.
What specifically does this mean? It means we better have mobile websites that allow them to do this; the mobile websites need to include only succinct information potential renters would want when on the go. It also means we need a mobile application (a custom company “app”) that customers can put on their devices so we own some real estate on their phones. Trends show that home internet connections are on the way of landline phones; the new battleground is the mobile phone. We need to be on as many as possible.
A mobile website is critical when consumers search for property management companies from their smart phones. Will yours come up? If it does, can consumers easily find rental homes, contact you (even text you!), and do everything you want them to do (like they can when you see them in your office or when they are in front of their home computer?)
An app is critical to sealing the relationship with customers. How can they remember you when they are on their mobile phones? Your app (with your company logo) sitting with the rest of the apps they use everyday is a good start. This is a good way to build mindshare and also to make it easy for your customers to contact you and refer you to their friends. Not an apps believer? Apps are set to be a $36B business by 2015- a lot of people use them and will be using them!
Change is hard, but the mobile revolution is not going away. If making a property management company last long term is the goal, mobile websites and apps are now “must-haves”!
Monday, December 5, 2011
Course - How to Increase your Fees through Market Analysis
This is a great end of the year training for the real estate professional right here in Dallas, Texas. Sign up today so you don't miss this 2011 training opportunity. Be current on the latest market analysis techniques and be geared with the resources to propel your business in 2012!
How to Increase your Fees through Market Analysis
Start: December 15, 2011
Venue: The Colonnade, 5 Star Conference Center
Phone: 214-638-5525
Address: 15301 Dallas Parkway, Addison, TX, United States, 75001
Price:
Two Day 15 Hour Courses – $185 Member / $200 Non-Member
How to Increase your Fees through Market Analysis – $135 Member / $150 Non-Member
Legal & Ethics – $90 Member / $105 Non-Member
Registration:
PDF Registration Form
Course Information:
Location: The Colonnade, 5 Star Conference Center
MCE Parking Information & Directions
Instructor: Alex Johnson, CCIM
Course Content:
• Why is Market Analysis necessary
• Market Analysis Tools & Resources
• Components of Market Analysis
• Site Selection Case Study
• Tenant Representation Case Study
• BRING YOUR LAPTOP TO CLASS (FREE WI-FI)
How to Increase your Fees through Market Analysis
Start: December 15, 2011
Venue: The Colonnade, 5 Star Conference Center
Phone: 214-638-5525
Address: 15301 Dallas Parkway, Addison, TX, United States, 75001
Price:
Two Day 15 Hour Courses – $185 Member / $200 Non-Member
How to Increase your Fees through Market Analysis – $135 Member / $150 Non-Member
Legal & Ethics – $90 Member / $105 Non-Member
Registration:
PDF Registration Form
Course Information:
Location: The Colonnade, 5 Star Conference Center
MCE Parking Information & Directions
Instructor: Alex Johnson, CCIM
Course Content:
• Why is Market Analysis necessary
• Market Analysis Tools & Resources
• Components of Market Analysis
• Site Selection Case Study
• Tenant Representation Case Study
• BRING YOUR LAPTOP TO CLASS (FREE WI-FI)
Thursday, December 1, 2011
3rd Quarter Real Estate Progress & Update
Recovery is progressing at different rates for various sectors despite slow economic growth. Apartments are still doing well, Office vacancies are declining slightly, and Retail vacancies are moored at 20-year highs.
Fears of a second recession have receded somewhat, but all eyes are still on Europe and on some aspects of the domestic economy.
Vacancy forecasts are largely unchanged since early 2010. Expectations have ratcheted downwards, however, for the most bullish rent growth forecasts.
Apartment Market Summary
Third quarter data shows that national vacancies fell by 30 basis points, from 5.9% to 5.6% as seen in the chart to the left. The apartment sector posted positive net absorption of roughly 36,000 units; this is a pullback relative to the first half when net absorption averaged around 43,000 units.
Although both asking and effective rents have increased for seven consecutive quarters, it now seems apparent that the most optimistic 2011 forecasts of between 4 to 5 percent national rent growth will not materialize for the year.
Office Market Summary
We should not deemphasize positive developments that show that the health of the office sector is improving. Completions rose in the third quarter along with rents increasing fairly consistently over the last four quarters.
Vacancies continued to decline, falling by 10 basis points from 17.5% in the second quarter to 17.4% in the third. Occupied space rose by roughly 6 million square feet, with positive leasing activity speeding up relative to the first half of the year.
Retail Market Summary
Retail vacancies remained stubbornly high at 11 percent in the third quarter, moored at a level unseen in two decades. We expect a modest rise in vacancies by the end of the year to 11.1 percent, and the only reason why vacancies haven't risen even more is that completions have essentially dried up.
The pace of deterioration is slowing, even when one examines figures across metro markets. Pockets of recovery continue to manifest showing relatively robust increase in year-over-year growth however; national figures have yet to consistently show heartening results.
Courtesy of REIS Reports
Fears of a second recession have receded somewhat, but all eyes are still on Europe and on some aspects of the domestic economy.
Vacancy forecasts are largely unchanged since early 2010. Expectations have ratcheted downwards, however, for the most bullish rent growth forecasts.
Apartment Market Summary
Third quarter data shows that national vacancies fell by 30 basis points, from 5.9% to 5.6% as seen in the chart to the left. The apartment sector posted positive net absorption of roughly 36,000 units; this is a pullback relative to the first half when net absorption averaged around 43,000 units.
Although both asking and effective rents have increased for seven consecutive quarters, it now seems apparent that the most optimistic 2011 forecasts of between 4 to 5 percent national rent growth will not materialize for the year.
Office Market Summary
We should not deemphasize positive developments that show that the health of the office sector is improving. Completions rose in the third quarter along with rents increasing fairly consistently over the last four quarters.
Vacancies continued to decline, falling by 10 basis points from 17.5% in the second quarter to 17.4% in the third. Occupied space rose by roughly 6 million square feet, with positive leasing activity speeding up relative to the first half of the year.
Retail Market Summary
Retail vacancies remained stubbornly high at 11 percent in the third quarter, moored at a level unseen in two decades. We expect a modest rise in vacancies by the end of the year to 11.1 percent, and the only reason why vacancies haven't risen even more is that completions have essentially dried up.
The pace of deterioration is slowing, even when one examines figures across metro markets. Pockets of recovery continue to manifest showing relatively robust increase in year-over-year growth however; national figures have yet to consistently show heartening results.
Courtesy of REIS Reports
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