Pearce Commercial

Lenders More Bullish on Commercial Real Estate

noreply@blogger.com (Barbara L. Pearce) — Tue, 13 Mar 2012 13:09:00 +0000

We have clearly seen recently that there is much stronger demand by users for real estate of all types. What's been holding people back, in many cases, is the feeling--or reality--that they cannot get financing. That was driven in part by the huge amounts of capital tied up in notes of various types that came due in the last couple of years. For whatever reason, or a combination of reasons, that seems to be changing.

Reports in all kinds of publications have been saying that lenders have a greater appetite for commercial real estate loans. That would make sense, since we all think that the market, and the values, are improving. What that means is that prices will soon start to rise, as activity climbs and users look for product.

What does that mean for buyers? Buy now, before supply dries up and prices increase. What does that mean for sellers? Good news. Your properties just got a whole lot easier to sell!

Timing a Sale or Purchase

noreply@blogger.com (Barbara L. Pearce) — Tue, 28 Feb 2012 16:37:00 +0000

As I think we all know, it almost never pays to try to time some financial event exactly, be it a stock sale or a real estate transaction. The most we can hope for is to get close enough to either the top or the bottom of the market, depending upon whether you are buying or selling, to feel good about your decision.

Well, when it comes to the real estate market, people have been trying to pinpoint the bottom of this particular cycle for years now. We may not be at the absolute bottom for demand and prices--in fact, I think that we are slightly past that point--but we are close. So is it time to sell?

More Good News

noreply@blogger.com (Barbara L. Pearce) — Fri, 03 Feb 2012 00:30:00 +0000

We've been watching the numbers go steadily up on our various sites and feeder sites. More viewers are logging on to our website from Trulia, from Google, and directly to our address. The numbers week to week and month to month are going up in the 50% range for page viewings and leads. So we've known for a while that people are looking at real estate again.

Now we have the first concrete evidence. Our commercial originations in January--meaning contracts that we now expect to close in the near future--were 75% of what we originated ALL of last year. One month, 75% of last year's total. Now that's an increase!

While it is obviously true that most of those transactions were begun months, and sometimes years, ago, that is true from year to year; there's always a long lag time. And, for the past few years, the lag time has gotten longer, as people and banks and institutions dragged their collective feet. However, the fact that we are pulling the trigger on originating them now means that much more is getting ready to close.

More evidence that we are past the bottom--make your move now!

It's Getting Better!

noreply@blogger.com (Barbara L. Pearce) — Tue, 17 Jan 2012 20:42:00 +0000

We've all been looking at each other in the commercial group lately, and remarking on how busy we are. What a change! It certainly means that people are out looking for space, particularly in sectors that are seeing more current activity, like restaurants and luxury goods.

What does that mean for sellers and buyers? If you are a seller, you are probably wondering whether you should hang on and wait for prices to rise. If you do, you will be competing with a lot of other people who've been waiting for the same thing, so you had better compare favorably. That means, if your property wouldn't sell if a better one like it were on the market, it would make more sense to list now, when there is less competition.

If you are a buyer, you are still in a buyer's market, so this is a great time. Don't wait too long, or prices will start to go up, and you will end up paying more.

Bottom line: I think we've passed the bottom.

Good News from Arizona

noreply@blogger.com (Barbara L. Pearce) — Mon, 09 Jan 2012 21:22:00 +0000

I just returned home from Phoenix, and the headlines out there last week crowed that the fourth quarter was one of the best in years for industrial real estate. There was also a prediction that more expansion was on the way. Boy, it's been a long time since we've read anything like that about industrial real estate! Especially in Arizona, where there has been a long period of retrenchment after overbuilding for a couple of decades.

And that's not the only good news. Other markets, including many metropolitan areas, are seeing the return of new tenants in retail and other markets. While prices still seem relatively soft, there are also reports that deals are tightening and incentives lessening.

While Connecticut may be behind the curve in the foreclosure and short sale cycle, since states like Nevada and Georgia, for example, don't require court involvement, we are sure to see the uptick in our own market as the business climate improves. And isn't that a nice way to start a new year?

Happy Holidays

noreply@blogger.com (Barbara L. Pearce) — Tue, 20 Dec 2011 15:58:00 +0000

From all of us at Pearce Commercial, best wishes for a prosperous and healthy new year, with real estate wishes in every stocking!

New Assessments in New Haven

noreply@blogger.com (Barbara L. Pearce) — Tue, 13 Dec 2011 16:38:00 +0000

The new assessments have been mailed to New Haven taxpayers, and there has been a lot of talk about what that will mean for residential taxpayers. What hasn't been touted as much is that the reassessment helps commercial taxpayers. First of all, most of their building values have not gone up over the past ten years. Secondly, commercial enterprises are taxed also on personal property. Therefore, when real estate assessments go up, personal property taxes go down, making the commercial sector's share of overall city taxes go down.

Sometimes commercial taxpayers do get some breaks!

DECD Tries New Initiatives

noreply@blogger.com (Barbara L. Pearce) — Tue, 06 Dec 2011 15:02:00 +0000

Last week in Guilford, I heard our new Commissioner of Economic and Community Development, Catherine Smith, give a presentation on what her agency is doing to attract jobs and improve the economy in our state. There were some things we already knew about, some things that we wish would go away, but some surprising new programs. From a commercial real estate point of view, the best was a new incentive for entrepreneurs, where the State would subsidize their rent. We have so much space available, and, as I discussed in my last blog, much of it would be perfect for start-up businesses. The details, along with the details of some of the other job creation measures, are on the DECD website, although she did say that streamlining the website was one of her priorities. It's not easy to navigate. However, if you do, you may find something that changes your mind about the old phrase "I'm from the government, and I'm here to help you"!

Just Like Steve Jobs

noreply@blogger.com (Barbara L. Pearce) — Tue, 29 Nov 2011 15:19:00 +0000

We've all read about Steve Jobs (and Bill Gates), starting companies in garages. It's a classic way to start as an entrepreneur. In this economy, there are lots of entrepreneurs, some because they've lost their jobs, some because there are always good, new ideas out there. And, at some point, they outgrow the garage and look for space.

That may be why the type of space most in demand now is small industrial or flex space. It appeals to entrepreneurs--it's affordable, easy to use in a variety of ways, and readily available. So, if you own that kind of space, think about leasing it to the next Steve Jobs. You could become famous!

A Challenge

noreply@blogger.com (Barbara L. Pearce) — Wed, 23 Nov 2011 14:19:00 +0000

We're having a little contest here at Pearce Commercial. We just had an investment property close in 58 days from listing to transfer of title. Since so many commercial transactions are affected by tax considerations, and since many companies and individuals have calendar year tax periods, we know that there will be some among you who are going to want to complete a transaction before the end of 2011. So, here's the challenge: Can someone out there beat the 58-day record? It may be that the clock has already started, because the property to be transferred may already have been listed.

There are 39 days, counting today (because there's plenty of time to act today!), left in 2011. So use them wisely, and help us beat the current record holder. Buy today-close in December!

Puppet Theater Mania

noreply@blogger.com (Barbara L. Pearce) — Tue, 15 Nov 2011 16:55:00 +0000

Today's New Haven Register has a front-page article about our new listing of the Stony Creek Puppet House. It's an old property, beloved by many, that has produced different types of theater on and off over the years. It needs a lot of loving care to be restored, but there are many people who hope that that will happen.

The attention that led to its being on the front page shows that there is still interest in real estate of various types, and the secret is in connecting the buyers and sellers of such property. Obviously, we don't always get a spot on the front page of the paper to help us along, but the puppet theater is an investment property, and those have proven to be popular in any kind of market.

We've gotten calls already on the puppet theater from the sign, which means that local people are seeing it as something worth checking on. Now that it's been more broadly advertised, we should receive even more calls. If you have an investment property of any type, now is the time to expose it to the market. There are buyers out there, looking for alternatives to stocks and bonds.

It's the Buying Time of the Year

noreply@blogger.com (Barbara L. Pearce) — Tue, 08 Nov 2011 18:41:00 +0000

If you are interested in acquiring investment or commercial property, and you have any hope of doing so by the end of the year, you need to be acting right now. We just had a wonderful investment property close in 58 days from the day of listing to the day of closing. That's about the number of days left in 2011. It will most likely only work if you will be closing with cash, but almost 40% of all properties that have sold this year in Connecticut have sold for cash.

Many people like to try to put whatever expenses they can into the year just ending. Others have let the end of the year sneak up on them. Still others may have begun their tax planning, and may just have realized that they have real estate transactions that they should be completing. Whatever the reason, we see more rushing at the end of the year than at any other time. Both buyers and sellers are often motivated to move quickly, for personal, tax, or business reasons, and there's always a push to get things completed before the holidays simply sweep most work aside.

Don't get caught--act now. Call your Pearce Commercial agent today!

Trends to Watch

noreply@blogger.com (Barbara L. Pearce) — Tue, 01 Nov 2011 13:59:00 +0000

I just came back from a meeting of large real estate firms around the country, and there are always interesting ideas that come out of our meetings. Some of the ideas will be interesting to commercial users and investors as well.

First of all, I heard that the largest buyer of US mortgages between 2003 and 2008 was the Republic of China. It's clear that international money has been making its way into the US over the past couple of decades, much of which they got from trading with us in their favor. What that suggests is that there is a whole new market of buyers out there, and we need to be looking beyond our own borders for them.

Along the same lines, one of the brokers suggested that we get rid of some of our excess property around the country by selling it --for cash--to non-US citizens, as long as they can prove that they have the cash flow to support it for some period of time. Once they've bought property, he suggests, they would be eligible for citizenship during a certain window of opportunity. His idea is that such a proposal would flood us with buyers for short sales and foreclosures, as well as for other property not being absorbed through the normal channels, by granting a carrot to immigrants that will bring wealth with them, while stabilizing our real estate market at the same time.

Other brokers have looked to pools of investors, who are using to cash to buy up real estate they consider to be at bargain rates. The investors are then holding the properties, and renting them in the meantime. To encourage even more sales, another firm owner suggested that the rules be loosened on the use of IRAs for the purchase of real estate, and that many more homes would sell as a result. His theory is that IRAs are for retirement, which is what most people consider their homes to be for as well.

All of these ideas, some of which are more likely to come to fruition than others, are aimed at encouraging us to look beyond the current malaise for trends and future cash flow streams which will increase sales and raise the value of properties. And anything that does that sounds good from here!

Investment Real Estate in Greater New Haven

noreply@blogger.com (Barbara L. Pearce) — Mon, 10 Oct 2011 14:28:00 +0000

To make money in New Haven real estate, a person needs to know that it is, at heart, a university town. The growth is in education and health care (the latter being here in some large part because of Yale's medical school), as well as biotech (ditto the sentence above). We are disproportionately employed in the arts, again in part because of schools, and also because our highly educated workforce values the arts greatly in evaluating quality of life issues.

These factors tend to produce a population in some parts of the region that can be quite transient - students, graduate students, residents, artists, and "hired gun" executives. At the other end of the spectrum, we have a very poor inner city area, with high rates of unemployment. Those two groups combine to produce a high need for rental properties at every price point, and contribute to New Haven having the lowest apartment vacancy rate in the country (about 1 and ½ percent).

If you've read the two preceding paragraphs, you're probably already in the market for residential investment property. Join the club! We have a great demand for those types of listings, and are always on the lookout for more. New Haven now has rentals that exceed $5,000 per month for an apartment, as well as Section 8 housing (in one instance, in the same building). Investors have a choice, therefore, about the segment of the market where they feel most comfortable. There is also a shortage of houses for rent, and we are starting to see activity in that sector as well as the strong demand for multifamily homes that has existed, particularly near the colleges and universities.

Of course, where there are students there is also a need for restaurants, bars, retail, and health facilities, so investment property does exist in other sectors as well. Greater New Haven is considered to be significantly "under-retailed", and 06511 is reported to be one of the nation's hottest mail-order zip codes, the theory being that the people in that part of New Haven have high incomes and not enough retail outlets to satisfy their consumption preferences.

So, whether you'd like to be a landlord, a franchisee, or simply a holder of a potentially valuable future income stream, we can find what you'd like in Greater New Haven, at any time that you think that you've had enough of entrusting your wealth to the increasingly volatile stock market.

First Entry

noreply@blogger.com (Barbara L. Pearce) — Thu, 06 Oct 2011 18:43:00 +0000

Welcome to the new and improved Pearce Commercial Real Estate Website, and to my commercial blog. While I have been blogging for a long time, this is my initial foray into exclusively commercial material.

It's always an interesting feeling to be writing in cyberspace. You have no idea who, if anyone, is reading what you post. Nor do you know, unless they contact you, what they think of what you say. That's my way of saying that I'm going to write about whatever occurs to me that I think might be useful or relevant to the potential audience, and I would be delighted to get feedback from reader about potential future topics.

By way of introduction, Pearce Commercial Real Estate covers most of Connecticut, largely excluding Litchfield and Fairfield Counties. We do sales, leasebacks, leases, exchanges, and buyer brokerage for industrial, office, retail, and investment property. We also have a large residential department, and joint ventures in appraisal services, insurance and mortgages. We see the market from the "boots on the ground" level, and get enough industry material to also get the view from 10,000 feet above the ground. I will try my best to balance those two perspectives, and hope that you will find this site useful.

Where Housing Grows, Retail Follows

noreply@blogger.com (Barbara L. Pearce) — Tue, 04 Oct 2011 20:54:00 +0000

I blogged last time about the low vacancy rate for apartments in New Haven, and I'd like to expand on why that matters to the commercial market. When people move into an area, they want the services they use to be convenient. So, once residential appears, developers, franchisors, and service providers follow. Companies use demographic information to determine where they should expand. They know that renters eat out, go to bars, and seek out entertainment, preferably without getting into a car. After all, that's why they rented in a center city to begin with. Recently, 360 State Street opened in the Ninth Square in New Haven and is already up to 80% occupancy. I noticed that a new Irish pub just opened on the corner of the open space behind 360 State. Would we need another Irish pub (there are six between that one and the center of Hamden) if not for all those renters? This is especially true with renters, who may have more disposable income than new buyers. Also, the vast majority of the 360 State renters bike, walk, or take the train to work, making close by services more enticing. Since 360 State Street is so far ahead of projected occupancy rates, it has already had an impact on the area around it, and that will continue. Soon we will see the food co-op opening, and I expect that dry cleaners, convenience stores, and pharmacies to follow. Already, the chain deli around the corner is one of the best-performing franchisees anywhere. Why? Location, location, location.

Downtown New Haven has retail opportunities that should excite both investors and business owners. And that means that the time to act is now.