SIOR PREDICTS THE COMMERCIAL REAL ESTATE MARKET

September 29, 2008 on 1:12 am | In CHARTS + STATISTICS, FASCINATING INDUSTRIAL REAL ESTATE INFORMATION, FASCINATING INFORMATION, Trends, Uncategorized, economy, statistics | 8 Comments

SIOR PREDICTS THE COMMERCIAL REAL ESTATE MARKET

Members of the Society of Industrial and Office Realtors® indicate in their SIOR Commercial Real Estate Index, an attitudinal survey of approximately 600 local market experts, that they anticipate a lower level of business activity in the upcoming quarters.

Analysis of the SIOR index implies that office and industrial market conditions are excellent for tenants and purchasers, but significantly less favorable for landlords and sellers.

Info courtesy of http://www.realtor.org/press_room/news_releases/2008/commercial_real_estate_index?&WT.mc_id=LS082008&DCSext.CAT=Comm

INDUSTRIAL PROPERTY MARKET BELIEVED TO BE REACHING THE BOTTOM

September 26, 2008 on 10:45 pm | In FASCINATING INDUSTRIAL REAL ESTATE INFORMATION, FASCINATING INFORMATION, Trends, Uncategorized | 22 Comments

INDUSTRIAL PROPERTY MARKET BELIEVED TO BE REACHING THE BOTTOM

Real Capital Analytics has calculated that July was one of the worst months for investment-property sales during the credit crisis. with year-to-date sales volume down 70% from the same period a year ago. At the end of June, volume was down just 62% from the year-ago period.

Real Capital Analytics.gif

The office, industrial, multifamily and retail sectors all reported their lowest July volumes since 2002 and 2003 when real estate markets were rebounding from the last down cycle.

The New York research firm attributed much of the sales decline to wide gaps between bid and ask prices, noting. “The key unanswered question is whether sellers are ready to recognize changed market conditions and accept pricing that will bring investors back into the market.”

It further noted that the next few weeks should be particularly critical in determining this year’s final tallies because September is traditionally one of the strongest periods for new offerings. “If sellers unveil a new round of offerings, that could add to an already backlogged inventory,” Real Capital warned.

There was optimism in the industrial sector, which had $1.1 billion in closed sales during July, had $1.38 billion worth of deals go to contract. Real Capital said that could set the stage for the sector’s third-quarter results to include its first quarterly gain in closed sales since the credit crunch began impacting commercial-property sales.

The office sector sustained the biggest decline in completed sales from the year-ago period, with a 79% drop to $34 billion. Multifamily, benefiting from financing available from Fannie Mae and Freddie Mac, has been the best-performing sector through most of the credit-markets turmoil. Its $3.2 billion worth of July sales was up 20% from its average monthly volume of closings from March through May.

Reports show that all sectors are grappling with a shortage of large buyers compared to a year ago. In the industrial sector, five investors had acquired $200 million of assets each during the first half of 2008 compared to 16 that had acquired $300 million or more apiece a year earlier. In the office sector, only six investors acquired at least $1 billion of assets apiece this year, versus 18 that had acquired $2 billion worth or more a year ago.

(Three of this year’s $1 billion-plus office investors were partners in Boston Properties-led ventures that in June acquired a Manhattan office portfolio for $3.95 billion from Macklowe Properties.)

Story influenced by:
http://www.loopnet.com/xnet/mainsite/news/news.aspx?DocID=4157

 

REASONS TO GO GREEN ON INDUSTRIALS

September 19, 2008 on 10:48 pm | In CHARTS + STATISTICS, FASCINATING INDUSTRIAL REAL ESTATE INFORMATION, GREEN, New Developments, Uncategorized, economy | 13 Comments

REASONS TO GO GREEN ON INDUSTRIALS

Warehouses are going green. Owners have noted that environmentally friendly big buildings can see big savings.


“The LEED ratings system has been geared more toward office than industrial. These buildings are physically different–you have all these docks that open,” says Thomas Bisacquino, president of the National Association of Industrial and Office Properties. “You have two major motivators: it’s the right thing to do, and the business case.”

Prologis Kaiser

But those in the know say that greening industrial properties is simplier than other commercial properties. Greening an industrial entails a reassessment of all building systems and materials. The techniques and materials used to make buildings more sustainable include an increased use of natural light and renewable materials, to photovoltaics and plug-ins to accommodate hybrid trucks.

In 2006, Denver-based developer ProLogis Corp. adopted a series of sustainability goals to be achieved by 2010, including utilization of 20% recycled content (by cost) in all new developments, installation of renewable energy resources with a capacity of over 25-million kilowatt hours annually for its global portfolio, reducing potable water usage for landscape irrigation by 50%, and diverting 75% of its construction debris from landfills and incinerators on all new projects. This year, the company announced a commitment to develop all new US warehouses to LEED standards, and all new UK facilities to BREEAM standards.

ProLogis

The idea of sustainable industrial facilities came “from our European colleagues,” says Drew Torbin, sustainability manager of ProLogis. Recent events including surveys that indicated people were ready to change their behavior to help the environment and rapidly rising energy prices also pushed for more sustainable buildings.

The main energy cost for industrial buildings is lighting, Torbin explains. Not surprisingly, a major change for ProLogis is the increased use of windows and skylights, using the sun for illumination rather than expensive artificial light. Vented skylights can allow heat to escape and will improve air circulation without relying as much on air conditioners.

Smaller windows on the building sides can let in additional light in selected areas that need consistent light. It also is important to remember that not every part of a warehouse need be lit all of the time. Motion detectors can turn electrical lights on when sections devoted solely to storage are occupied.


The pavement also provides a number of green opportunities, including the use of environmentally friendly concrete, a renewable resource composed of sand or crushed rock. As a paving surface, it’s said to be superior to asphalt, which also is a petroleum-based product.

Concrete eliminates the hot spots that often occur in asphalt-paved parking lots, which also aids in LEED certification, Companies also are recycling concrete from older projects, and adding foam into the mix to triple the insulation quality.

Water conservation is also becoming a factor. Watson Land has designed its landscaping to include bioswales to collect and recycle water runoff, reducing maintenance costs and reducing the strain on the local water and sewage systems. Inside the building, restrooms have been configured to lower water usage, even to include waterless urinals.

Roof space is becoming an opportunity, through the use of solar cells. In March, ProLogis announced an initiative with Southern California Edison to lease rooftop space to install solar panels. Other possibilities exist, as well. “It’s not unthinkable that we’ll see these individual projects providing surplus energy and selling it back to the grid,” Biscacquino says.

The additional cost of going green can be more than offset by the goodwill and new business it attracts. “We certainly have to justify the cost. We have shareholders who expect a return,” Torbin says. “But we won two BMW deals this year because of our investment in LEED. We’re deepening our customer relationships.”

bmw

CALIFORNIA ENDORSES STATEWIDE GREEN BUILDING CODE + LOOKS TOWARD 2010

September 16, 2008 on 7:06 am | In Uncategorized | 6 Comments

CALIFORNIA ENDORSES STATEWIDE GREEN BUILDING CODE + LOOKS TOWARD 2010

When it comes to green building, California continues to lead the way in adopting environmentally-friendly building codes. Most recently, the California Building Standards Commission has taken the opportunity, along with other state agencies, to develop green building standards that will establish California as a leader in the efforts to reduce greenhouse gas emissions from structures. This is part of an ongoing evolution of how California will build.

Governor Arnold_Schwarzenegger “By adopting this first-in-the-nation statewide green building code, California is again leading the way to fight climate change and protect the environment. This is literally a groundbreaking move to ensure that when we break ground on all new buildings in the Golden State we are promoting green building and energy efficient new technologies,” notes Governor Arnold Schwarzenegger.

The recently amended California Green Building Standards Code, CCR, Title 24, Part 11 now includes mandatory features with a delayed effective date for housing, and voluntary standards for hospitals and other non-residential occupancies. The Commission will continue to work with state agencies and the many stakeholders as we develop a comprehensive set of mandatory provisions in the 2010 edition of the California Green Building Standards Code. “California continues to lead the nation and I commend the hard work of the Building Standards Commission to adopt the first-in-the-nation statewide

green building standards,” proudly observes our Governator. “Cars and buildings are two of the leading users of energy – we’re already addressing cars, and these new building standards will ensure that California remains at the forefront of reducing our carbon footprint and conserving valuable natural resources while also protecting our economy,” he concludes. “We have already committed to making our state-owned buildings more green and energy efficient and this statewide code will reduce greenhouse gas emissions, improve energy efficiency and conserve water in all new buildings.” http://www.bsc.ca.gov/prpsd_stds/default.htm

CAP RATES WILL RISE

September 9, 2008 on 8:03 am | In Bravo, FASCINATING INFORMATION, FUNNY...MONEY, Investment Opportunities, New Developments, Trends, Uncategorized, economy | 6 Comments

CAP RATES WILL RISE

 

Cap Rates are predicted to be going up in the next 12 months, marginally, mind you, but they will rise. Let’s look at the statistics, in October 2007, the average cap rate for commercial property was 6.94 percent, according to Real Capital Analytics. In 2006, the average cap rate was 7.12 percent.

 

Cap rates for top-tier properties are not expected to rise more than 25 basis points while cap rates for lower-tiered properties and markets will increase 50 basis points to 75 basis points, predicts Hessam Nadji, senior vice president and managing director of Marcus & Millichap Research Services.

 

 

 “Many cap rates have been predicated on the availability of cheap debt, and that’s driven pricing to artificially high levels,” notes Bob Dougherty, chief acquisitions officer with Buchanan Street Partners “We’ve been underwriting a 100-basis-point increase in cap rates for almost two years because we’ve been expecting a correction. Now we think cap rates will return to historical norms of 200 [basis points] to 300 basis points over Treasuries.”

Industrial REITS: 1of 3 Areas of Real Estate Expected to Boom

September 7, 2008 on 12:45 am | In Bravo, FASCINATING INDUSTRIAL REAL ESTATE INFORMATION, FASCINATING INFORMATION, FUNNY...MONEY, Investment Opportunities, New Developments, PROPERTY WISH LIST, Trends, Uncategorized | 9 Comments

Industrial REITS: 1of 3 Areas of Real Estate Expected to Boom

 

David Lee, who has managed the $2.5 billion T. Rowe Price Real Estate Fund (TRREX) since it opened in October 1997, says the following areas of the housing market are either doing well now or soon will be.

 

Mall companies. “There’s good scarcity value in regional malls and not a lot of construction going on in the mall business,” he notes. “Short of going bankrupt, we’re not convinced that all these retailers can close their way to profitability. They’re going to continue to pay rents to have stores in the highly profitable malls.”

 

Residential apartment communities. “If you can’t buy a home, you have to rent.”

 

 

Industrial REITs (or real estate investment trusts). Warehouses are pretty economically sensitive right now, Lee says.

 

Original from: http://www.realtor.org/RMODaily.nsf/pages/News2008070702?OpenDocument

 

NEARLY 25% OF SAN FRANCISCO IS UP FOR REZONING

September 2, 2008 on 12:04 am | In Bravo, FASCINATING INDUSTRIAL REAL ESTATE INFORMATION, FASCINATING INFORMATION, Government, Investment Opportunities, New Developments, Trends, Uncategorized | 11 Comments

NEARLY 25% OF SAN FRANCISCO IS UP FOR REZONING

In a bold move to accommodate San Francisco’s changing needs, the city is looking to rezone + gentrify four eastside districts. The current plan removes industrial area in favor of mixed use multiunit developments in the Mission Bay district, Showplace Square/Potrero Hill, east SoMa and the central waterfront neighborhoods. Recently approved by the city’s Planning Commission, the project is now before the San Francisco Board of Supervisors.
San Francisco Map

The proposed plan - which is not unlike New York City’s west side renaissance - takes approximately two-million sf of land zoned for light industrial and rezones it for between 7,500 and 10,000 new housing units over the next 10 years. It also prohibits residential and office from further eroding the industrial base – which San Francisco defines as production, distribution and repair uses– through special permits. During the boom years of the 1990s, dot-coms and residential developers converted a good portion of the area’s buildings into loft-like office space and condominiums.

San Francisco Mission Bay District Channel lofts

This rezoning involved years of planning and review, hearings and negotiation so that the city can better manage the evolution. Incorporating some of the most progressive ideas, the plan will purportedly provide incentives meant to spark additional commercial development (light industry, office, retail and restaurants), creates development fees to pay for the necessary infrastructure improvements, and requires residential developers to make some units affordable not only to low-income families but also to middle-income families. It is assumed that all new development will comply with San Francisco’s stringent green building codes.

Nearly 100 projects are said to be in line awaiting the rezoning. If the new zoning is approved as is, there will be a new community improvement fee. At a minimum, builders would be required to pay $8 per sf for residential development and $6 per sf for non-residential construction.

 

San Francisco Mission Bay District.jpg

For affordable housing - San Francisco’s Inclusionary Housing Ordinance requires that market-rate developments larger than five units provide 15% to 20% of their units at below market rate. The proposed plan requires higher percentages of affordable housing in formerly industrial areas, and should raise the top end of the affordability level to 120% of the city’s median income (approximately $114,000 for a family of four); the low end is 30% of median (approximately $30,000). The city estimates that under the new zoning and associated rules that 28% of the housing units in the area would be affordable. Commercial incentives include allowing developers to build beyond certain height limits if they pay additional fees or create more affordable housing.

A San Francisco Board of Supervisors committee is expected review the plan in the next several days. A vote by the full board is expected sometime in October.

 

http://www.globest.com/news/1213_1217/sanfrancisco/172931-1.html

 

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