NNN Lease Market News
Westfield Group (WDC) plans to start a 1 billion pound ($1.6 billion) redevelopment at a site it owns in London’s White City area adjacent to its shopping center, as it boosts its pipeline for projects amid a recovery in sales.
The company is now seeking public feedback on plans for the redevelopment, which will include 1,700 homes and about 48,000 square meters (516,668 square feet) of retail space, the world’s biggest shopping center operator by market value said in an e- mailed release.
NNN is Also Known as Net Net Net Lease or Triple Net Lease in The Commercial Real Estate Investment Market
Wednesday, June 29, 2011
Tuesday, June 28, 2011
The NNN Lease Lucrative Investor
NNN Lease Market
Calkain NNN Lease Expert and receive the answer to your question directly to your inbox! No need to search all over the internet for you answers, leave it to the experts.
Calkain NNN Lease Expert and receive the answer to your question directly to your inbox! No need to search all over the internet for you answers, leave it to the experts.
NNN leases are also unique in their duration. Unlike a typical residential lease that lasts only 6 to 12 months, a NNN lease lasts typically 15 to 30 years. This is a huge advantage for property owners who want consistency in the monthly payments and the security of not having to worry about the constant struggle of placing tenants. NNN leases also take into consideration inflation and typically include rent increase clauses through the life of the lease term.
Typical tenants for NNN leases are Walgreens, CVS, Social Security Administration, Arbys, Pizza Hut, 7eleven, Wells Fargo and many more. These well recognized companies are willing to participate in NNN leases, because owning all of their business locations is not advantageous to their business model or growth.Many investors are looking for a safe place to put their money with the wild fluctuations in the financial market. Stable, predictable investment vehicles are increasingly hard to find, but smart investors do have choices. One of the better choices is to invest in NNN lease, which many investors also call a corporate bond combined with real estate investments that still make sense today.
Owning a NNN lease property offers a long term lease with a corporately rated tenant, opposed to an individual tenant in residential real estate. The major benefit of a NNN lease is the consistent monthly return without the hassles of being a landlord.
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Thursday, June 23, 2011
Office Lease Market Trends Report
NNN Lease Office Market News
Calkain Research provides in-depth analysis of the market. Our intimate knowledge and years of experience in the market have given us the unique opportunity to provide thoughtful leadership and perspective.
San Diego Ofiice Market
Boosted by a relatively low increase in vacancies, San Diego County’s office market improved from 17th to 11th place. “San Diego leads the group of markets ranked just outside of the top 10 with above-average marks for several indicators, including its change in vacancy, concessions and new supply.
Orlando Office Market.
The submarket, which had a 20.1 percent vacancy rate in fourth-quarter 2009, improved to 17.4 percent in 2010’s fourth quarter, said a new report from Morrison Commercial Real Estate.
That compared with a fourth-quarter 2010 vacancy rate of 19.2 percent in the Orlando market as a whole, which was worse than fourth-quarter 2009’s 18.7 percent.
Chicago Office Market
Total vacancy in the Chicago area improved slightly in the first quarter of 2011, with the downtown office market recording 575,085 square feet of positive absorption and the suburban market 417,590 square feet of positive absorption, for vacancy rates of 16.14 percent and 22.63 percent respectively.
Four leases in the downtown market eclipsed 100,000 square feet, with KPMG LLP recording the largest new lease for 260,000 square feet at the AON Center. The largest new lease in the suburban market was CVS Caremark’s 119,245-square-foot lease at 2100 E. Lake Cook Road in Buffalo Grove.
Despite the increased leasing activity, overall asking rental rates continued to tick down. Class A space in the downtown market was $31.90, down slightly from the previous quarter, while Class B rates held steady at $26.44 and Class C was down to $21.79.
NJ Office Market
Office markets have been mixed but generally steady across the District in the first quarter of 2011. The office vacancy rate rose moderately in Manhattan and Long Island (where it reached a multi-year high), but was little changed in Northern NJ. However, asking rents in all these areas moved up, and landlords reportedly scaled back on concessions. In Westchester and Fairfield counties however, office markets showed further signs of softening, as vacancy rates rose and asking rents continued to decline modestly.
NYC Office Market
The Manhattan office market is flexinits muscles and is beginning to show signs of strength and improvement. SL Green Realty Corp., the City’s largest office landlord, just reported its fourth quarter earnings. A Crain’s New York Business article reported the company’s funds from operations increased to $74.7 million or 93 cents a share, up from $69.1 million or 87 cents a share from the year prior.
Washington Office Market
Unlike other parts of the country, the Washington office market is also fueled by a growing job market. The region has the lowest unemployment rate, 6.2 percent in August, among major metropolitan areas in the country.
Metropolitan Washington has added a net of 20,000 public and private sector jobs during the past year, according to the government. Growing payrolls often prompt employers to look for more space.
Still, some experts say several looming factors could put the brakes on the sector's recovery in the region.
The best office market remained Washington, D.C., and Detroit remained the worst.
Calkain Research provides in-depth analysis of the market. Our intimate knowledge and years of experience in the market have given us the unique opportunity to provide thoughtful leadership and perspective.
San Diego Ofiice Market
Boosted by a relatively low increase in vacancies, San Diego County’s office market improved from 17th to 11th place. “San Diego leads the group of markets ranked just outside of the top 10 with above-average marks for several indicators, including its change in vacancy, concessions and new supply.
Orlando Office Market.
The submarket, which had a 20.1 percent vacancy rate in fourth-quarter 2009, improved to 17.4 percent in 2010’s fourth quarter, said a new report from Morrison Commercial Real Estate.
That compared with a fourth-quarter 2010 vacancy rate of 19.2 percent in the Orlando market as a whole, which was worse than fourth-quarter 2009’s 18.7 percent.
Chicago Office Market
Total vacancy in the Chicago area improved slightly in the first quarter of 2011, with the downtown office market recording 575,085 square feet of positive absorption and the suburban market 417,590 square feet of positive absorption, for vacancy rates of 16.14 percent and 22.63 percent respectively.
Four leases in the downtown market eclipsed 100,000 square feet, with KPMG LLP recording the largest new lease for 260,000 square feet at the AON Center. The largest new lease in the suburban market was CVS Caremark’s 119,245-square-foot lease at 2100 E. Lake Cook Road in Buffalo Grove.
Despite the increased leasing activity, overall asking rental rates continued to tick down. Class A space in the downtown market was $31.90, down slightly from the previous quarter, while Class B rates held steady at $26.44 and Class C was down to $21.79.
NJ Office Market
Office markets have been mixed but generally steady across the District in the first quarter of 2011. The office vacancy rate rose moderately in Manhattan and Long Island (where it reached a multi-year high), but was little changed in Northern NJ. However, asking rents in all these areas moved up, and landlords reportedly scaled back on concessions. In Westchester and Fairfield counties however, office markets showed further signs of softening, as vacancy rates rose and asking rents continued to decline modestly.
NYC Office Market
The Manhattan office market is flexinits muscles and is beginning to show signs of strength and improvement. SL Green Realty Corp., the City’s largest office landlord, just reported its fourth quarter earnings. A Crain’s New York Business article reported the company’s funds from operations increased to $74.7 million or 93 cents a share, up from $69.1 million or 87 cents a share from the year prior.
Washington Office Market
Unlike other parts of the country, the Washington office market is also fueled by a growing job market. The region has the lowest unemployment rate, 6.2 percent in August, among major metropolitan areas in the country.
Metropolitan Washington has added a net of 20,000 public and private sector jobs during the past year, according to the government. Growing payrolls often prompt employers to look for more space.
Still, some experts say several looming factors could put the brakes on the sector's recovery in the region.
The best office market remained Washington, D.C., and Detroit remained the worst.
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Wednesday, June 22, 2011
Commercial Real Estate Investors are Optimistic U.S. Recovery Will Continue
NNN Lease Market News
Commercial real estate investors are optimistic that a U.S. industry recovery will continue even as the economy shows signs of slowing.
A lack of new supply and low interest rates are helping to drive investor interest in commercial properties. Capitalization rates, which decline when real estate prices increase, fell in 27 of 31 markets surveyed.
Office properties led cap-rate declines in the second quarter, the report showed. The average cap rate for office buildings in central business districts was 6.95 percent, down 1.2 percent from a year earlier. Cap rates, a measure of yield, are net income divided by the sales price
Buyers are pursuing deals as the market improves, and concern that that the economic recovery will falter has deterred “very few” investors from acquiring assets.
There will be “very few additions” to the commercial- property supply in the near term, which will help absorb existing space and drive up rents as tenant demand increases, according to the report. Lease rates remain below peak levels for most property types and increased in 25 of 31 markets surveyed.
The Northeast is the strongest office market, with nine out of 10 regions surveyed in recovery or expansion this year.
Two-thirds of investors view current market conditions as favorable to sellers, and all 81 multifamily markets surveyed are expected to be out of recession by the end of the year.
http://www.bloomberg.com/news
Commercial real estate investors are optimistic that a U.S. industry recovery will continue even as the economy shows signs of slowing.
A lack of new supply and low interest rates are helping to drive investor interest in commercial properties. Capitalization rates, which decline when real estate prices increase, fell in 27 of 31 markets surveyed.
Office properties led cap-rate declines in the second quarter, the report showed. The average cap rate for office buildings in central business districts was 6.95 percent, down 1.2 percent from a year earlier. Cap rates, a measure of yield, are net income divided by the sales price
Buyers are pursuing deals as the market improves, and concern that that the economic recovery will falter has deterred “very few” investors from acquiring assets.
There will be “very few additions” to the commercial- property supply in the near term, which will help absorb existing space and drive up rents as tenant demand increases, according to the report. Lease rates remain below peak levels for most property types and increased in 25 of 31 markets surveyed.
The Northeast is the strongest office market, with nine out of 10 regions surveyed in recovery or expansion this year.
Two-thirds of investors view current market conditions as favorable to sellers, and all 81 multifamily markets surveyed are expected to be out of recession by the end of the year.
http://www.bloomberg.com/news
Brownstone Tampa Partners LLC Announced it has Acquired the Former Trump Tower
NNN Lease Market News
Mr. Trump wasn't the developer of the planned 52-story Tampa project, but he licensed his name to its Florida developer, Simdag/Robel LLC. Mr. Trump did numerous of these types of deals in the years leading up the economic downturn, earning large fees. Most turned out well. But a few proved to be a headache for Mr. Trump after the market soured.
Some of the Tampa lawsuits against Mr. Trump have been settled out of court, says a person familiar with the matter.
Mr. Trump, who made his name as a Manhattan developer, said in an interview on Tuesday that most of his licensing deals have been successful and the Tampa project was one of numerous projects hurt by bad timing. He also said that his company, Trump Organization, plans to continue licensing the Trump name.
But now, he said, he plans to "look in more detail into the market where we're going, whether it's Tampa or somewhere else."
For months, Dagostino has said the property where he had intended to build a 52-story, $225 million Trump Tower Tampa is on the market but that he still held out hope of building a revised project that could include both condominium and hotel components.
Robert Owens said a partnership he is leading (Brownstone Tampa Partners LLC ) paid $5 million for the former Trump site and an adjacent six-story office building. He said he plans to build a mixed-use complex with retail, offices and a hotel or condominiums there.
http://online.wsj.com/public/page/news-real-estate-commercial.html?mod=WSJ_topnav_na_realestate
Mr. Trump wasn't the developer of the planned 52-story Tampa project, but he licensed his name to its Florida developer, Simdag/Robel LLC. Mr. Trump did numerous of these types of deals in the years leading up the economic downturn, earning large fees. Most turned out well. But a few proved to be a headache for Mr. Trump after the market soured.
Some of the Tampa lawsuits against Mr. Trump have been settled out of court, says a person familiar with the matter.
Mr. Trump, who made his name as a Manhattan developer, said in an interview on Tuesday that most of his licensing deals have been successful and the Tampa project was one of numerous projects hurt by bad timing. He also said that his company, Trump Organization, plans to continue licensing the Trump name.
But now, he said, he plans to "look in more detail into the market where we're going, whether it's Tampa or somewhere else."
For months, Dagostino has said the property where he had intended to build a 52-story, $225 million Trump Tower Tampa is on the market but that he still held out hope of building a revised project that could include both condominium and hotel components.
Robert Owens said a partnership he is leading (Brownstone Tampa Partners LLC ) paid $5 million for the former Trump site and an adjacent six-story office building. He said he plans to build a mixed-use complex with retail, offices and a hotel or condominiums there.
http://online.wsj.com/public/page/news-real-estate-commercial.html?mod=WSJ_topnav_na_realestate
Monday, June 20, 2011
Time to Buy (NNN) Net Leased Properties
NNN Lease Market
Now is the Time to Buy (NNN) Net Leased Properties
As our nation suffers from “deficit disorder” making financial decisions has not been this difficult since the 1980’s. With doom and gloom on the news each night and the word “crisis” in every paragraph, and the capital markets in a state of collapse most investors have frozen their decision making. The availability of high quality assets has rarely been better.Active lenders are funding selectively and mostly with long term relationships into only the best investments. They look to value of the asset, the ability to pay the loan back and the ability to weather any storm that may come up. We are gripped in a recession a recession and there is no recovery predicted in the near term. Many investors are sitting in strong cash positions and looking for the bottom. It very well be that we would not recognize the bottom even if someone pointed it out. For the long-term investor, they are in the market at all points, up and down. The market is now serving up many great opportunities to buy quality properties at attractive pricing.
Inventory is increasing and there are many products to choose from. All tenant types, credits, lease terms, and types of construction to look at. We look for this trend to continue for the balance of 2010 and most of 2011.
Despite the economic downturn and the fact that many aspects of the commercial real estate industry still need time to season before true recovery takes place, some niche segments of the market are actually performing extremely well. In fact, some are at the same level they reached at the height of the market.
Financing is the number one issue today. For the owners of smaller properties, options in these difficult times are greater especially since capital is still available for these deals. However, for the larger property owners where potential buyers likely require financing, their choices are much more limited.
NNN Investment Property in Florida No Management Responsibilities
NNN Lease Market News
Calkain Companies, a national real estate investment brokerage firm, recently procured the $900,000 sale of a Burger King NNN investment property in Fort Myers, Florida. The property at 9041 College Parkway is operated by Furman's Inc, a regional franchisee of Burger King for over 30 years. The property is situated on .9 acres of land at the hard corner of College Parkway and South Pointe Blvd.
Patrick Nutt, Senior Associate of Calkain Realty Advisors, the private market division of Calkain Companies, represented both parties in this transaction. Nutt commented, "The real estate was the driving force on this deal. It's a quality corner where the tenant has occupied the space for a very long time." Nutt continued, "Even after seeing effective rents in the market decrease over the past two years, the existing lease is well below market, offering the buyer potential upside at the end of this lease term."
This sale marks the third closing in less than a month for Nutt, possibly signaling a turn in the perception of the investment market. Nutt remarked, "If you have a high credit tenant or high quality real estate, there is considerable demand for those assets, often attracting cash buyers looking to capitalize on the higher returns offered in net lease investments compared to the historically low interest rates of a traditional certificate of deposit or money market account."
Meanwhile, Burger King franchisees are spending big to take part in Burger King's massive, chain-wide remodeling program. The plan calls for all 12,000 worldwide stores to be fitted with rotating chandeliers, electronic-screen menus, and walls of brick and corrugated steel. The cost is reportedly between $300,000 and $600,000 per store.
It's all very confusing for the fast-food consumer. Burger King, even while positioning itself as the place to procure sacks of cheap burgers to be eaten on the run, also seems intent on also competing directly with "fast casual" chains like Chipotle (CMG) and Panera (PNRA), and even with straight-up, sit-down restaurants like Applebee's.
McDonald's, meanwhile, is offering premium, high-margin products, but without shedding its fast-food identity. Everything it sells -- the premium stuff, the healthy stuff, the coffee -- is affordable and convenient. And while it, too, is upgrading its stores, it's not trying to make them look like anything other than McDonald's outlets, where you can grab what you need and be on your way.
It will be interesting to see what the new Brazilian owners will make of Burger King's grandiose vision. Chidsey will step down as CEO, but will remain as a co-chairman along with Alex Behring, 3G's managing director. Supposedly they'll work together to find a new chief.
So far, a few dozen outlets have taken part in the remodeling. While the revamped stores, according to the company, have boosted sales by 12% to 15%, 3G will be looking for ways to cut costs (as is the wont of PE shops) as well as cheaper ways to boost the top line. Of course, 3G has promised to invest big in the chain, but given that it's paying $4 billion, or $24 a share -- a 46% premium to its share price earlier this week -- the new owners will have to show much more care in deploying such investments than Burger King has during its four-year life. NNN properties for sale are typically free standing buildings that are leased to tenants for a 10 to 25 year term. They offer the benefit of little or no management responsibilities as the tenant pays for all, if not most of the expenses. The investor receives their rent with little to no other involvement.
Friday, June 17, 2011
Boston Net Lease Market
NNN Lease Market News
Calkain Companies Inc., a national real estate investment brokerage firm, has recently opened a Boston-area office, located in Burlington, in order to better serve the New England and Northeast markets. The office will be staffed by three industry veterans: senior managing director Stan Wyrwicz, formerly the chief financial officer of General Investment and Development Cos. and also CFO with Cabot, Cabot and Forbes; managing director Rich Murphy, who has been part of the Calkain team for a year and who previously worked at the controller level for the Mills corporation Follow this company and Akridge Real Estate Services; and vice president Mike O’Mara, wo has been in commercial real estate for 20 years.
CB Richard Ellis/New England, based in Boston, has named Jason Levendusky, Taidgh McClory and Patrick Mulready partners of the firm. Levendusky, who joined CBRE/NE in 2001, is a senior member of the Massachusetts suburban brokerage team. McClory, who joined CBRE/NE in 2003, is senior vice president, director of marketing & client services. Mulready, who began his career at CBRE/NE in 1996 as an appraiser, specializing in the valuation of office properties throughout Greater Hartford, transferred to the Hartford brokerage staff in 1998 to focus on the sale of investment properties.
Individual investors will continue to be attracted to Net Lease deals because those transactions are viewed as safe, income-producing real estate investments, says CEO of Calkain Jonathan W Hipp “We think that Boston-area is going to stay very competitive net lease market.
Calkain Companies Inc., a national real estate investment brokerage firm, has recently opened a Boston-area office, located in Burlington, in order to better serve the New England and Northeast markets. The office will be staffed by three industry veterans: senior managing director Stan Wyrwicz, formerly the chief financial officer of General Investment and Development Cos. and also CFO with Cabot, Cabot and Forbes; managing director Rich Murphy, who has been part of the Calkain team for a year and who previously worked at the controller level for the Mills corporation Follow this company and Akridge Real Estate Services; and vice president Mike O’Mara, wo has been in commercial real estate for 20 years.
CB Richard Ellis/New England, based in Boston, has named Jason Levendusky, Taidgh McClory and Patrick Mulready partners of the firm. Levendusky, who joined CBRE/NE in 2001, is a senior member of the Massachusetts suburban brokerage team. McClory, who joined CBRE/NE in 2003, is senior vice president, director of marketing & client services. Mulready, who began his career at CBRE/NE in 1996 as an appraiser, specializing in the valuation of office properties throughout Greater Hartford, transferred to the Hartford brokerage staff in 1998 to focus on the sale of investment properties.
Individual investors will continue to be attracted to Net Lease deals because those transactions are viewed as safe, income-producing real estate investments, says CEO of Calkain Jonathan W Hipp “We think that Boston-area is going to stay very competitive net lease market.
Wednesday, June 15, 2011
Net Lease Market Report
NNN Lease Market News
Calkain Net Lease Market Report provides in-depth analysis of the (NNN) net lease market
A recent theme in the (NNN) net lease market has been the success of primary markets compared to their tertiary counterparts. While primary markets have been resilient and recently showed remarkable success, tertiary markets continue to struggle. The Washington DC area (D.C., Maryland and Virginia) is chief among the top tier markets and its relative success is easily measurable.
Net lease cap rates for retail, market compressed in the first quarter of 2011, while investment sales remained strong in the single tenant market, according to data from Calkain . Calkain Research provides in-depth analysis of the (NNN) net lease market. Our intimate knowledge and years of experience in the net lease industry gives us the unique opportunity to provide thought leadership and perspective. Through highly focused coverage over a diverse range of topics, we facilitate a culture of knowledge and enable intelligent investment strategies.
The (NNN) net lease market continues to improve, but many of the factors driving this appear short term. As more properties come to market due to improved pricing fundamentals, many believe that the cap rate compression will plateau. The high demand and scarcity of high performance markets will continue drive their cap rates lower.www.calkain.com/reports/research/calkain
Calkain Net Lease Market Report provides in-depth analysis of the (NNN) net lease market
A recent theme in the (NNN) net lease market has been the success of primary markets compared to their tertiary counterparts. While primary markets have been resilient and recently showed remarkable success, tertiary markets continue to struggle. The Washington DC area (D.C., Maryland and Virginia) is chief among the top tier markets and its relative success is easily measurable.
Net lease cap rates for retail, market compressed in the first quarter of 2011, while investment sales remained strong in the single tenant market, according to data from Calkain . Calkain Research provides in-depth analysis of the (NNN) net lease market. Our intimate knowledge and years of experience in the net lease industry gives us the unique opportunity to provide thought leadership and perspective. Through highly focused coverage over a diverse range of topics, we facilitate a culture of knowledge and enable intelligent investment strategies.
The (NNN) net lease market continues to improve, but many of the factors driving this appear short term. As more properties come to market due to improved pricing fundamentals, many believe that the cap rate compression will plateau. The high demand and scarcity of high performance markets will continue drive their cap rates lower.www.calkain.com/reports/research/calkain
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NNN Lease Investments in High Traffic Corridors of Manhattan
NNN Lease Market News
NNN Lease investments activity will speed up...
Robust job growth and an increase in tourism will encourage consumer spending in New York City this year, driving retail operations to outperform most of the nation, predicts Marcus & Millichap in a second-quarter retail research market update, released yesterday.
As the local economy improves, the report predicts, retail investment activity will speed up, most notably in single-tenant and mixed-use sectors, with easing capital markets and low interest rates encouraging REITs and institutions to acquire single- tenant assets in high-traffic corridors of Manhattan. The Financial District and Times Square on the other hand will draw keen interest from risk-weary investors seeking long-term stability.
The report estimates that developers will deliver nearly 775,000 square feet of retail space to the New York City market this year, more than 40 percent of which will come online in Manhattan. That figure is down from 2010, when approximately 1.5 million square feet was finished within in the metro area.
http://therealdeal.com/
NNN Lease investments activity will speed up...
Robust job growth and an increase in tourism will encourage consumer spending in New York City this year, driving retail operations to outperform most of the nation, predicts Marcus & Millichap in a second-quarter retail research market update, released yesterday.
As the local economy improves, the report predicts, retail investment activity will speed up, most notably in single-tenant and mixed-use sectors, with easing capital markets and low interest rates encouraging REITs and institutions to acquire single- tenant assets in high-traffic corridors of Manhattan. The Financial District and Times Square on the other hand will draw keen interest from risk-weary investors seeking long-term stability.
The report estimates that developers will deliver nearly 775,000 square feet of retail space to the New York City market this year, more than 40 percent of which will come online in Manhattan. That figure is down from 2010, when approximately 1.5 million square feet was finished within in the metro area.
http://therealdeal.com/
Tuesday, June 14, 2011
U.K. Housing Market is in Firm Decline After a Rebound in 2010
NNN Lease Market News
U.K. Housing Market is in Firm dDecline After a Rebound in 2010
The figures are the latest to suggest the U.K. housing market is in firm decline after a rebound in 2010. The Halifax mortgage lender said last week that prices in April fell at their fastest annual rate since October 2009.
Prices have been depressed by a variety of factors. Many prospective buyers have seen their monthly income fall in real terms as inflation has outpaced wage growth, making it less appealing to invest in a bigger property. The threat of job loss has also dissuaded some from taking on a bigger mortgage. First-time buyers in particular have been deterred by tight lending conditions.
The RICS said the fall in its balance in May was driven by a rise in the number of prospective sellers on the market, coinciding with a modest drop in people looking to buy.
U.K. Housing Market is in Firm dDecline After a Rebound in 2010
The figures are the latest to suggest the U.K. housing market is in firm decline after a rebound in 2010. The Halifax mortgage lender said last week that prices in April fell at their fastest annual rate since October 2009.
Prices have been depressed by a variety of factors. Many prospective buyers have seen their monthly income fall in real terms as inflation has outpaced wage growth, making it less appealing to invest in a bigger property. The threat of job loss has also dissuaded some from taking on a bigger mortgage. First-time buyers in particular have been deterred by tight lending conditions.
The RICS said the fall in its balance in May was driven by a rise in the number of prospective sellers on the market, coinciding with a modest drop in people looking to buy.
Monday, June 13, 2011
Lease Market On Demand
NNN Lease Market News
The NNN Lease Market on Demand. It looks like another banner year for the NNN leasing market, with demand far exceeding supply in most areas of the country. Thanks largely to the baby boomer population seeking out new types of retirement investments, NNN Lease demand continues to be high, and the demand, for the most part, comes from people who are in the midst of 1031 tax deferred exchanges. And even in light of interest rates trending upwards, cap rates tend to remain low with prices holding steady. Shopping Center Business recently spoke with several companies that are active in the NNN Lease market to find out more about these trends and what we can expect for 2012.
Demographic Shift
The main reason for the current state of the NNN Lease market is the significant demographic shift of baby boomers moving into their retirement years. According to Bruce McDonald, president of Net Lease Capital Advisors, there are about 75 million baby boomers, the oldest of which are just hitting the age of 60, so there are a lot of older Americans who have built up substantial wealth in real estate portfolios. Their ability to go into the net lease market allows them to avoid paying capital gains tax and move from management-intensive real estate to passive real estate that provides a stable income. “There are a lot of people who have built their portfolios out of single-family, duplexes or triplexes, and they are getting too old to bother with that and now have a yin for a management-free investment that produces a regular cash flow,” says Ralph Bunje, president of Reverse Exchange Services, Inc. “The traditional NNN Lease market model for these investors was a single-tenant property, such as a Burger King or post office because it fit their criteria. Now, as a result of this demographic shift, there has been the creation of the TIC [tenant in common] industry.” In addition to a management-free investment, a lot of these retirees are looking for “safer” investments as opposed to the traditional stock market approach.
The NNN Lease Market on Demand. It looks like another banner year for the NNN leasing market, with demand far exceeding supply in most areas of the country. Thanks largely to the baby boomer population seeking out new types of retirement investments, NNN Lease demand continues to be high, and the demand, for the most part, comes from people who are in the midst of 1031 tax deferred exchanges. And even in light of interest rates trending upwards, cap rates tend to remain low with prices holding steady. Shopping Center Business recently spoke with several companies that are active in the NNN Lease market to find out more about these trends and what we can expect for 2012.
Demographic Shift
The main reason for the current state of the NNN Lease market is the significant demographic shift of baby boomers moving into their retirement years. According to Bruce McDonald, president of Net Lease Capital Advisors, there are about 75 million baby boomers, the oldest of which are just hitting the age of 60, so there are a lot of older Americans who have built up substantial wealth in real estate portfolios. Their ability to go into the net lease market allows them to avoid paying capital gains tax and move from management-intensive real estate to passive real estate that provides a stable income. “There are a lot of people who have built their portfolios out of single-family, duplexes or triplexes, and they are getting too old to bother with that and now have a yin for a management-free investment that produces a regular cash flow,” says Ralph Bunje, president of Reverse Exchange Services, Inc. “The traditional NNN Lease market model for these investors was a single-tenant property, such as a Burger King or post office because it fit their criteria. Now, as a result of this demographic shift, there has been the creation of the TIC [tenant in common] industry.” In addition to a management-free investment, a lot of these retirees are looking for “safer” investments as opposed to the traditional stock market approach.
Thursday, June 9, 2011
Dubai The Worst Performing Market
NNN Lease Market News
The Dubai Financial Market Real Estate Index, a measure of five developers’ stocks, has slumped 73 percent since mid-2008. The index was up 0.7 percent at 12:54 p.m. today and is still down 9.3 percent this year.
Residential property prices in Dubai, the worst-performing market in the Middle East for the past three years, haven’t yet benefited from political turmoil in other parts of the region, Deutsche Bank AG said.
The Dubai Financial Market (Arabic: سوق دبي المالي) is a stock exchange located in Dubai, United Arab Emirates. It was founded on March 26, 2000.
There are about 57 companies listed (as of August 2007) on DFM, most of them are UAE-based companies and a few dual listings for companies based in other MENA region countries. Many companies allow foreigners to own their shares. Total market cap is around $360bn, which is roughly equal to the market cap of Abu Dhabi Securities Market ($380bn) (as of August 2007). In comparison, the market cap for ExxonMobil (as of Oct. 2008) is $360bn.
During 2004 and 2005, there were significant increases in the volume of shares traded and the share prices of many companies. However, towards the end of 2005 and through the first few months of 2006 the bubble burst and share values dropped by around 60% on DFM, along with similar decreases in most other Persian Gulf stock markets.
The Dubai Financial Market Real Estate Index, a measure of five developers’ stocks, has slumped 73 percent since mid-2008. The index was up 0.7 percent at 12:54 p.m. today and is still down 9.3 percent this year.
Residential property prices in Dubai, the worst-performing market in the Middle East for the past three years, haven’t yet benefited from political turmoil in other parts of the region, Deutsche Bank AG said.
The Dubai Financial Market (Arabic: سوق دبي المالي) is a stock exchange located in Dubai, United Arab Emirates. It was founded on March 26, 2000.
There are about 57 companies listed (as of August 2007) on DFM, most of them are UAE-based companies and a few dual listings for companies based in other MENA region countries. Many companies allow foreigners to own their shares. Total market cap is around $360bn, which is roughly equal to the market cap of Abu Dhabi Securities Market ($380bn) (as of August 2007). In comparison, the market cap for ExxonMobil (as of Oct. 2008) is $360bn.
During 2004 and 2005, there were significant increases in the volume of shares traded and the share prices of many companies. However, towards the end of 2005 and through the first few months of 2006 the bubble burst and share values dropped by around 60% on DFM, along with similar decreases in most other Persian Gulf stock markets.
The NNN Lease Market is Booming
NNN Lease Market News
The NNN Lease Market is Booming In the past 18 months, cap rates for quality net leased properties have tightened more than 100 basis points. New CVS & Walgreen’s properties are selling in the low 7 to the low 6 cap ranges and ground leases with investment grade bank tenants are consistently in the 6’s and starting to break into the 5’s. Investors are attracted to the consistent cash flow stream of net leased properties and with A rated corporate bonds trading in the low 4’s, those looking for better yields are finding net lease properties an attractive alternative. In addition, since the recession started in late 2007, few new net leased assets have come onto the market which has further increased the demand for the existing inventory.
Lenders are bullish and fueling the NNN boom especially the conduits
As lenders have come back into the market, the availability of financing has been a boon for the acquisition of net leased properties. Banks, in regions where they are healthy, are attempting to carve out niches where they know the geographic market and have existing relationships with borrowers.
kwentzel@fantinigorga.com
http://www.fantinigorga.com/
The NNN Lease Market is Booming In the past 18 months, cap rates for quality net leased properties have tightened more than 100 basis points. New CVS & Walgreen’s properties are selling in the low 7 to the low 6 cap ranges and ground leases with investment grade bank tenants are consistently in the 6’s and starting to break into the 5’s. Investors are attracted to the consistent cash flow stream of net leased properties and with A rated corporate bonds trading in the low 4’s, those looking for better yields are finding net lease properties an attractive alternative. In addition, since the recession started in late 2007, few new net leased assets have come onto the market which has further increased the demand for the existing inventory.
Lenders are bullish and fueling the NNN boom especially the conduits
As lenders have come back into the market, the availability of financing has been a boon for the acquisition of net leased properties. Banks, in regions where they are healthy, are attempting to carve out niches where they know the geographic market and have existing relationships with borrowers.
kwentzel@fantinigorga.com
http://www.fantinigorga.com/
Boom Game Market In China
NNN Lease Market News
The game maker Perfect World told a Chinese newspaper recently that Chinese game operators are "irresistibly excited about digging gold in overseas markets."
China had 290 million Internet users nationwide as of November, with the number of Web surfers expanding at a 50% annual pace. At midyear, more than half that figure--some 147 million people--were playing online games, a nearly 20% increase from six months earlier, according to government figures. That's about 4 million new game players a month.
"We expect that in the next few years, the growth of the online gaming market in China will maintain its current speed," says Jasmine Liang, spokeswoman for Netease, which produces the highly popular "Fantastic Westward Journey." "When the economy is gloomy, you might feel it's expensive to spend 100 or 200 yuan [about $7 to $14] on a dinner or a movie, but dozens of [yuan] for one month on gaming is not that big a deal."
Online gaming is cheap indeed--less than 10 cents an hour, or free for some games that make money by selling bonus features such as weapons to top-end players. Since it's also a form of social networking, it provides an inexpensive social alternative to dinner and drinks with friends. For workers with downtime at state-owned enterprises, it is a popular time-killer, a social-networking version of solitaire. For a growing pool of computer-savvy college graduates facing a tough job market, it is a diverting way to stay in touch with former classmates. Shanda Interactive boasts the largest overall market share in China, according to iResearch, with 15.7% of revenue; 2nd-ranked Netease.Besides the increase in users and the increase in games, the Chinese market has room to grow, in part, because their product is still catching up to the global standard-bearer, "World of Warcraft."The game maker Perfect World told a Chinese newspaper recently that Chinese game operators are "irresistibly excited about digging gold in overseas markets."And after conducting research, the company decided only one market outside of China will be particularly lucrative: The United States.
http://www.forbes.com/forbes/
The game maker Perfect World told a Chinese newspaper recently that Chinese game operators are "irresistibly excited about digging gold in overseas markets."
China had 290 million Internet users nationwide as of November, with the number of Web surfers expanding at a 50% annual pace. At midyear, more than half that figure--some 147 million people--were playing online games, a nearly 20% increase from six months earlier, according to government figures. That's about 4 million new game players a month.
"We expect that in the next few years, the growth of the online gaming market in China will maintain its current speed," says Jasmine Liang, spokeswoman for Netease, which produces the highly popular "Fantastic Westward Journey." "When the economy is gloomy, you might feel it's expensive to spend 100 or 200 yuan [about $7 to $14] on a dinner or a movie, but dozens of [yuan] for one month on gaming is not that big a deal."
Online gaming is cheap indeed--less than 10 cents an hour, or free for some games that make money by selling bonus features such as weapons to top-end players. Since it's also a form of social networking, it provides an inexpensive social alternative to dinner and drinks with friends. For workers with downtime at state-owned enterprises, it is a popular time-killer, a social-networking version of solitaire. For a growing pool of computer-savvy college graduates facing a tough job market, it is a diverting way to stay in touch with former classmates. Shanda Interactive boasts the largest overall market share in China, according to iResearch, with 15.7% of revenue; 2nd-ranked Netease.Besides the increase in users and the increase in games, the Chinese market has room to grow, in part, because their product is still catching up to the global standard-bearer, "World of Warcraft."The game maker Perfect World told a Chinese newspaper recently that Chinese game operators are "irresistibly excited about digging gold in overseas markets."And after conducting research, the company decided only one market outside of China will be particularly lucrative: The United States.
http://www.forbes.com/forbes/
Wednesday, June 8, 2011
Office Owners Seek to Cash In as Prices Boom Market
NNN Lease Market News
Wells Real Estate Investment Trust II Inc. is under contract to buy the iconic Market Square complex at 701 and 801 Pennsylvania Ave. NW for about $615 million, and the price, at $904.7 per square foot, sets a record for office building sales in the District.
The seller, Beacon Capital Partners LLC of Boston, put the property on the market in January after lenders reportedly encouraged Beacon to sell some assets to pay down its debt. New York-based Eastdil Secured LLC represented the seller.Beacon also is considering bringing to market 1211 Ave. of the Americas in coming weeks, for which the company would look to retrieve well above the $1.5 billion that it paid in 2006, according to people familiar with the matter.
Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months.
Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months.
Office Owners Seek to Cash In as Prices Boom
NNN Lease Market News
Big-Name Buildings Go on Block as Prices Boom; 'Who Knows What Market Will Be Like' in a Year? says Tim Jaroch, one of the general partners who own the 1.4 million-square-foot Constitution Center.
Until recently, post-recession sales activity in the office market has been slow. Lenders have held onto distressed assets rather than sell them, frustrating many investors who hoped to take advantage of the pain of others. Even as values rise, many owners continue to resist selling because they don't like their options for investing the proceeds.
The sharp rise in values has come over the past year, a relatively short time frame in the real-estate market. Recent deals include the sale of 750 Seventh Ave. in New York's Times Square by Hines Interests for a surprisingly high $485 million and Beacon Capital Partners' sale of Market Square in Washington for a record $905 a square foot. Beacon also is considering bringing to market 1211 Ave. of the Americas in coming weeks, for which the company would look to retrieve well above the $1.5 billion that it paid in 2006, according to people familiar with the matter.
Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months. Last week, the S&P/Case-Shiller Home Price Index reported home prices were down 4.2% in the first quarter of 2011.While new buyers are betting on a strong future in the market, the high prices—back so rapidly from the market's trough—have given some investors pause. Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months. Large New York City developers, including Douglas Durst, have said prices have risen too high to justify acquisitions.
http://online.wsj.com/article
Office Owners Seek to Cash In
Big-Name Buildings Go on Block as Prices Boom; 'Who Knows What Market Will Be Like' in a Year? says Tim Jaroch, one of the general partners who own the 1.4 million-square-foot Constitution Center.
Until recently, post-recession sales activity in the office market has been slow. Lenders have held onto distressed assets rather than sell them, frustrating many investors who hoped to take advantage of the pain of others. Even as values rise, many owners continue to resist selling because they don't like their options for investing the proceeds.
The sharp rise in values has come over the past year, a relatively short time frame in the real-estate market. Recent deals include the sale of 750 Seventh Ave. in New York's Times Square by Hines Interests for a surprisingly high $485 million and Beacon Capital Partners' sale of Market Square in Washington for a record $905 a square foot. Beacon also is considering bringing to market 1211 Ave. of the Americas in coming weeks, for which the company would look to retrieve well above the $1.5 billion that it paid in 2006, according to people familiar with the matter.
Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months. Last week, the S&P/Case-Shiller Home Price Index reported home prices were down 4.2% in the first quarter of 2011.While new buyers are betting on a strong future in the market, the high prices—back so rapidly from the market's trough—have given some investors pause. Building owners in some office markets contrast sharply with the residential market, where home prices have declined for months. Large New York City developers, including Douglas Durst, have said prices have risen too high to justify acquisitions.
http://online.wsj.com/article
Monday, June 6, 2011
National Retail Properties Market Report (NNN)
NNN Lease Market News
National Retail Properties announces new and expanded $450 million unsecured credit facility Co announces the closing of a new $450 million unsecured credit facility, replacing its existing $400 million credit facility. The new facility matures May 2015, with an option to extend maturity to May 2016. The facility is priced at LIBOR plus 150 basis points. The new facility also includes an accordion feature to increase the facility size to $650 million.
National Retail Properties (NYSE: NNN), a real estate investment trust, invests in single-tenant retail properties generally subject to long-term, net leases.
As one of only 114 out of the more than 10,000 publicly-traded companies that have increased annual dividends for 21 or more consecutive years, we are a powerful partner for our retail customers and a proven investment for our shareholders. The average annual total return to shareholders has been 13.6% over the past 15 years.
http://money.msn.com/business
National Retail Properties announces new and expanded $450 million unsecured credit facility Co announces the closing of a new $450 million unsecured credit facility, replacing its existing $400 million credit facility. The new facility matures May 2015, with an option to extend maturity to May 2016. The facility is priced at LIBOR plus 150 basis points. The new facility also includes an accordion feature to increase the facility size to $650 million.
Calkain Research provides a variety of reports on all aspects of the net lease market. Our coverage includes: retail, industrial, urban, QSR, banks, pharmacy and more. We present a comprehensive and detailed picture of the market; providing investors with the information they need.
Briefing.com is the leading Internet provider of live market analysis for U.S. Stock, U.S. Bond, and world FX market participants.National Retail Properties (NYSE: NNN), a real estate investment trust, invests in single-tenant retail properties generally subject to long-term, net leases.
As one of only 114 out of the more than 10,000 publicly-traded companies that have increased annual dividends for 21 or more consecutive years, we are a powerful partner for our retail customers and a proven investment for our shareholders. The average annual total return to shareholders has been 13.6% over the past 15 years.
http://money.msn.com/business
Friday, June 3, 2011
Net Lease Financing
NNN Lease Market News
Keith Wentzel on Net Lease Financing
We aked Keith K. Wentzel, Managing Director of Fantini & Gorga, his opinions regarding net lease financing and the future of the market.
What types of NNN properties are the easiest to finance? The hardest?
To a great extent, three criteria impact the feasibility of net lease financing: Credit quality, location and lease term. Assets with investment grade (or equivalent) tenants, good locations, and long term leases (20-25 years) are easiest to finance. Without one or two of these criteria, financing becomes increasingly difficult. Below investment grade tenants, tertiary markets, and short term leases are major concerns and can negatively impact the ability to obtain financing for a property..
http://www.calkain.com/
What types of NNN properties are the easiest to finance? The hardest?
To a great extent, three criteria impact the feasibility of net lease financing: Credit quality, location and lease term. Assets with investment grade (or equivalent) tenants, good locations, and long term leases (20-25 years) are easiest to finance. Without one or two of these criteria, financing becomes increasingly difficult. Below investment grade tenants, tertiary markets, and short term leases are major concerns and can negatively impact the ability to obtain financing for a property..
http://www.calkain.com/
Willis Tower in Chicago Looking to Recapitalize or Sell The Property
NNN Lease Market News
The owners of the Willis Tower in Chicago, North America's tallest building, are looking to recapitalize or sell the property, in the latest sign of rising commercial-real-estate values in the country's top markets.
Office-building values have been rebounding strongly in markets like New York, Washington, D.C., and Chicago. Last summer, a Chicago office tower at 300 North LaSalle St. sold for $655 million, which came to about $500 a square foot, a record footage price for a Chicago office building. By comparison, the Willis Tower sold for about $244 a square foot in 2004.
Designed by the architectural firm Skidmore, Owings & Merrill for Sears, Roebuck & Company, the world’s largest retailer at the time, the 3.8 million RSF building is the preeminent office address in Chicago and one of the premier properties in the world. The Willis Tower provides an exceptional West Loop location, unparalleled views from all of the property’s highly efficient floors and unmatched prestige.
Sears Holdings Corporation (NASDAQ: SHLD) is the nation's fourth largest broadline retailer with over 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, consumer electronics and automotive repair and maintenance.
http://online.wsj.com/article
The owners of the Willis Tower in Chicago, North America's tallest building, are looking to recapitalize or sell the property, in the latest sign of rising commercial-real-estate values in the country's top markets.
Office-building values have been rebounding strongly in markets like New York, Washington, D.C., and Chicago. Last summer, a Chicago office tower at 300 North LaSalle St. sold for $655 million, which came to about $500 a square foot, a record footage price for a Chicago office building. By comparison, the Willis Tower sold for about $244 a square foot in 2004.
Designed by the architectural firm Skidmore, Owings & Merrill for Sears, Roebuck & Company, the world’s largest retailer at the time, the 3.8 million RSF building is the preeminent office address in Chicago and one of the premier properties in the world. The Willis Tower provides an exceptional West Loop location, unparalleled views from all of the property’s highly efficient floors and unmatched prestige.
Sears Holdings Corporation (NASDAQ: SHLD) is the nation's fourth largest broadline retailer with over 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, consumer electronics and automotive repair and maintenance.
http://online.wsj.com/article
Wednesday, June 1, 2011
How to apply a capitalization rate to the NOI
NNN Lease Market News
How do I calculate the possible market value of a zero cash flow property?
Values for zero cash flow properties are usually expressed as a percentage over the debt. That is to say, some percentage in excess of the debt. As an example, a brand new CVS zero with 25 years left on the lease/loan that fully amortizes would price in today's market at probably between 9% and 10% over the debt, such that if the loan balance were say $10Mil, then the total value be about $11Mil, meaning you could buy it with approx. $1Mil in equity. Further, the more seasoned that zeros become (older) the more valuable they tend to get, as you are closer to the day that you own it free and clear.
Another way to approach the problem would be to value the store as you would any other NNN property by applying a cap rate to the NOI. However, by applying a cap rate to the NOI, you would probably need to add at least 150 basis points premium to the cap rate. This helps account for the constraints of the zero deal (i.e. inability to refinance etc.). Said differently, If you have a deal that would otherwise trade at a 7.00%, as a zero it would probably value closer to an 8.5%.
http://www.calkain.com/
How do I calculate the possible market value of a zero cash flow property?
Values for zero cash flow properties are usually expressed as a percentage over the debt. That is to say, some percentage in excess of the debt. As an example, a brand new CVS zero with 25 years left on the lease/loan that fully amortizes would price in today's market at probably between 9% and 10% over the debt, such that if the loan balance were say $10Mil, then the total value be about $11Mil, meaning you could buy it with approx. $1Mil in equity. Further, the more seasoned that zeros become (older) the more valuable they tend to get, as you are closer to the day that you own it free and clear.
Another way to approach the problem would be to value the store as you would any other NNN property by applying a cap rate to the NOI. However, by applying a cap rate to the NOI, you would probably need to add at least 150 basis points premium to the cap rate. This helps account for the constraints of the zero deal (i.e. inability to refinance etc.). Said differently, If you have a deal that would otherwise trade at a 7.00%, as a zero it would probably value closer to an 8.5%.
http://www.calkain.com/
South Florida's Retail Vacancy Decreases to 6.6%
NNN Lease Market News
South Florida's Retail Vacancy Decreases to 6.6% The South Florida retail market experienced a slight improvement in market conditions in the first quarter 2011.
A total of 11 retail buildings with 201,170 square feet of retail space were delivered to the market in the quarter, with 187,137 square feet still under construction at the end of the quarter.
http://www.costar.com/News/Article/Market
A former Office Depot call center in Boca Raton Florida has been sold at a 49 percent discount off of the value of the mortgage held by a commercial mortgage-backed securities fund that foreclosed on it. According to the South Florida Business Journal, the CMBS fund seized the 137,066-square-foot building, at 750 Park of Commerce Drive, after the previous owner, Cambridge Assets II, defaulted on its $13.6 million mortgage.
http://therealdeal/.
South Florida's Retail Vacancy Decreases to 6.6% The South Florida retail market experienced a slight improvement in market conditions in the first quarter 2011.
A total of 11 retail buildings with 201,170 square feet of retail space were delivered to the market in the quarter, with 187,137 square feet still under construction at the end of the quarter.
http://www.costar.com/News/Article/Market
A former Office Depot call center in Boca Raton Florida has been sold at a 49 percent discount off of the value of the mortgage held by a commercial mortgage-backed securities fund that foreclosed on it. According to the South Florida Business Journal, the CMBS fund seized the 137,066-square-foot building, at 750 Park of Commerce Drive, after the previous owner, Cambridge Assets II, defaulted on its $13.6 million mortgage.
http://therealdeal/.
Greece's Government Prepares to Sell Up to $42.9 Billion of Public Property
NNN Lease Market News
The Hellenic Public Real Estate Corp., the government body that manages public property, has a list of about 75,000 individual government-owned properties. The corporation has appointed National Bank of Greece SA to lead a consortium of advisers who are now preparing to sell an initial portfolio of 20 to 30 properties, the first of which could be put on the market in the next few months, according to Aristotelis Karytinos, general manager of the real-estate division at National Bank of Greece.
"Our strategy is to award concessions, long-term leases of 30 to 40 years, depending on the individual property, but the government will retain ownership of the land," Mr. Karytinos said. "The first properties should come to market in the next few months, but certainly by the end of the year."
Whatever the next step is in Greece's plan to privatize public real estate, all eyes will be on how Athens handles the first deals that come to market.
http://online.wsj.com/
Sales of public land by Greece may include a concession to develop a luxury resort on the island of Rhodes, whose harbor and historic city center in 2007 are shown. The first properties could be put on the market in the next few months.
The Hellenic Public Real Estate Corp., the government body that manages public property, has a list of about 75,000 individual government-owned properties. The corporation has appointed National Bank of Greece SA to lead a consortium of advisers who are now preparing to sell an initial portfolio of 20 to 30 properties, the first of which could be put on the market in the next few months, according to Aristotelis Karytinos, general manager of the real-estate division at National Bank of Greece.
"Our strategy is to award concessions, long-term leases of 30 to 40 years, depending on the individual property, but the government will retain ownership of the land," Mr. Karytinos said. "The first properties should come to market in the next few months, but certainly by the end of the year."
Whatever the next step is in Greece's plan to privatize public real estate, all eyes will be on how Athens handles the first deals that come to market.
http://online.wsj.com/
DC Front Runner Position In the Real Estate Market
NNN Lease Market News
DC front runner position seems to be continuing in recent weeks. According to pending sales data from the region's multiple listing service, Metropolitan Regional Information System, suggest prices are stable.
Moreover, DC front runner position seems to be continuing in recent weeks. According to pending sales data from the region's multiple listing service, Metropolitan Regional Information System, suggest prices are stable. Prices on closed sales in April are even slightly up over April 2010, which was the peak of the tax credit boomlet, and demand remains strong at only 78 median days on market in April.
DC stability comes down to two essential factors that are the key to recovery everywhere, according to housing market expert Jonathan Miller of Miller Samuel and John Heithaus of MRIS. The first is employment, where the DC region shines. In February, DC registered the lowest jobless rates among all MSAs in the country, at 5.9 percent, according to the Bureau of Labor Statistics.
The second factor might be less tangible but equally important. "Legacy issues," as Miller called them, have helped the DC market avoid problems with oversupply, speculation and rampant foreclosures that have plagued other markets.
DC stability comes down to two essential factors that are the key to recovery everywhere, according to housing market expert Jonathan Miller of Miller Samuel and John Heithaus of MRIS. The first is employment, where the DC region shines. In February, DC registered the lowest jobless rates among all MSAs in the country, at 5.9 percent, according to the Bureau of Labor Statistics.
The second factor might be less tangible but equally important. "Legacy issues," as Miller called them, have helped the DC market avoid problems with oversupply, speculation and rampant foreclosures that have plagued other markets.
In a hot market, buyers often overlook these defects because prices are rising and buyers are more willing to make compromises. In a slow market, with no urgency to buy immediately, buyers are pickier. They take their time and buy when they find the right house.
The 2010 United States Census found that the DC has a population of 601,657 residents, continuing a trend of population growth in the city since the 2000 Census, which recorded 572,059 residents.During the workweek, however, the number of commuters from the suburbs into the city swells the DC population by over 70%, to a daytime population of over one million people. The Washington Metropolitan Area, which includes the DC and surrounding localities, is the seventh-largest metropolitan area in the United States with approximately 5.6 million residents as of the 2010 Census. When the Washington area is included with Baltimore and its suburbs, the Baltimore– (DC) Washington Metropolitan Area had a population exceeding 8.5 million residents in 2010, the fourth-largest combined statistical area in the country.
http://www.realestateeconomywatch.com/
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