Good News For Real Estate Market In 2012

NNN Lease Market News

Good News For Real Estate Prices In 2012

A study released by Deloitte Real Estate Services says the U.S. commercial real estate market “appears to be on a gradual but uneven path to recovery with increased capital availability, transactions and improved fundamentals.” However, “a potential pause in recovery momentum” exists due to the European Debt Crisis, continued high unemployment rates in the U.S. and the high rate of maturing debt levels.

The Associated General Contractors of America released a study that says private construction spending increased for the first three quarters of 2011, but investments in the public sector continue to rapidly decline.

The National Association of Realtors reports pent up demand exists “from buyers who normally would have entered the market in recent years,” and that homeowner default rates now are lower than at any time in history.

For now, a 30-year fixed-rate mortgage remains at less than 4 percent, but a forecast by New York based investment banking firm Keefe, Bruyette and Woods, Inc. says the rate of 10-year treasury bonds should rise in 2012 because the Federal Reserve will not purchase enough mortgage backed securities “to keep mortgage rates from rising to 4.7 percent by the fourth quarter of 2012.”

What does all of this information mean? According to BusinessWeek, “…even the worst hit markets will begin to see improvement (in) 2012.”

NNN Market Loan Prices Rise in October

NNN Lease Market News

Commercial Real Estate Loan Prices Rise in October

In October, DebtX priced 52,806 CRE loans with a $628.4 billion aggregate principal balance. These loans, which collateralize 647 US CMBS trusts, each received a DXMark(R), a price based on 10 years of data from billions of dollars in loan sales executed by DebtX, the largest marketplace for loan sales. Access to individual DXMark prices is available through the BLOOMBERG PROFESSIONAL(R) Service. Type DXMKfor more information.

DebtX's CMBS loan pricing analysis is part of DXMarket Datasm, a subscription service that provides loan buyers with insight about transactions at www.debtx.com . DXMarket Datasm is available to registered DebtX buyers and includes six components: Non-Performing Loan Sale Prices, Bank Watch, Secondary Loan Market Commentary, CMBS Loan Collateral Prices, Secondary Loan Market Liquidity and CRE  Capital Markets Observations.  http://www.marketwatch.com/


Over the last 12 months high quality assets have been in strong demand;drugs store such “Walgreens” being the perfect example. As a result of this strong demand, cap rates for high quality assets have been driven down to the low/mid 6% range. Investors are now looking for higher returns. Washington D.C., New York, Boston, Chicago, Dallas, L.A and San Francisco are all popular locations for acquiring net leased assets and urban infill locations with good demographics are highly sought after. www.calkain.com

NNN Commercial Real Estate Properties Prices Up !!!

NNN Lease Market News


NNN Commercial Real Estate Prices in U.S. Increased 5% in July


U.S. commercial real estate prices rose for a third straight month in July as deals for smaller properties led a rebound that may stall as the economy slows, according to Moody’s Investors Service.

Demand had increased for real estate outside of major cities such as New York before a recent slowdown in CMBS lending. The CMBS slump may hurt demand for non-distressed building sales of less than $10 million in metro areas outside U.S. cities where real estate is most sought after, Tad Philipp, director of commercial real estate research at Moody’s, said in a telephone interview. These deals accounted for 60 percent of July repeat sales, Moody’s said.
“The CMBS market largely is a main source of financing for the middle market,” Philipp said.
A gain in commercial-property values may be held back by buyers making more conservative estimates for rent increases and leasing amid slow job growth, according to the report.
“Price increases in the near term are likely to be earned the old-fashioned way, by rent growth, rather than through higher leverage or financial engineering,” Moody’s said.
Green Street Advisors Inc., a real estate research company in Newport Beach, California, reported commercial property values rose 1 percent in August from the previous month and advanced 18 percent from a year earlier.

http://www.bloomberg.com/news

Office Sublease Market Trends

NNN LEASE MARKET NEWS

Affordable Prices Push Active SubLease Market In Manhattan ...


Conventional wisdom holds that subleasing in which tenants vacate their offices before the end of their lease and rent it to another tenant at a discount has a negative impact on the market. The amount of sublease space available has declined, the research shows, as 21 percent of all office space on the market in the first half of 2011 was available for sublease, compared to 30 percent in 2009. The most coveted office space, in city towers above the 25th floor, is on the market for an average of 8.5 months, 3 months less than  space at the 10th floor and below.
Yet despite these positive signs for those seeking sub-tenants, subleases are actually getting snapped up so quickly because of weaker price points compared to the direct-lease market. Many tenants that have recently converted sublease space into direct leases, a trend that is being driven by the tightening commercial real estate market.  The disparity sat at 25 percent for the first half of this year, thanks to the improving commercial office leasing market,
But the industry perspective is now shifting.Tenants are embracing subleases as a means of locking in below-market rents, while landlords, who are facing fewer vacancies, are using it to attract tenants and then converting the leases into direct deals when the subleases expire.
During this downturn, however, sublease space may have proved to be somewhat less of a drag on the market
http://therealdeal.com/

 What is sublease? when a tenant let out the whole or part of the property rented by him a to a third person it is called 'sublease'. Even though it is rented out fully, the first tenant will be responsible for payment of rent and all charges to the landlord and he is also responsible for all loss caused by the sub lessee to the property. There is no agreement with the landlord and the sub-tenant. The landlords generally discourage such sub-leasing by banning it in the lease agreement.

  

NNN Lease Property Prices Increased

NNN Lease Market News

U.S. commercial property prices increased in May for the first time in six months as a rebound in distressed real estate helped boost values, according to Moody’s Investors Service.

The Moody’s/REAL Commercial Property Price Index rose 6.3 percent from April, the largest gain since the measure began in 2000. It’s down 11 percent from a year earlier and 46 percent below the peak of October 2007, the company said today.

“A number of transactions that were recorded in May had their most recent prior sales in 2009 as the market was beginning to bottom and subsequently traded for substantial returns,” Tad Philipp, director of commercial real estate research at Moody’s, said in a separate statement. “We are likely to see a pickup in post-peak repeat sales and expect such transactions to play an important role in helping drive the CPPI higher.”

http://www.bloomberg.com/news

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.

 http://blogs.wsj.com/developments