Power Tools for Commercial Real Estate Practitioners

News and resources for commercial real estate specialists, from NAR Provider: NATIONAL ASSOCIATION OF REALTORS® Feed Type: Informational [report]

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Come check out the new blog from NAR's Information Central! "Power Tools for Commercial-Investment Practitioners" is no longer being updated, but you'll find plenty of interest in the InfoCentral Blog. The InfoCentral Blog keeps you up-to-date on new and useful information resources for the real estate industry -- websites, research reports, eBooks, news articles, services and databases from NAR's Information Central, and more. Surf on over to http://narblog1.realtors.org/mvtype/infocentral/.

Subprime Fallout a Plus for Senior Housing Developer

As the baby boom generation retires, senior housing is one sector that has remained strong even in the present downturn. National Real Estate Investor has an interview with Patricia G. Will, CEO of assisted living owner and operator Belmont Corp. who says the housing slump has made her life easier. With residential developers sidelined for now, there is less competition for land positions. And while some raw material prices remain high due to overseas demand, Belmont is finding it easier to negotiate with contractors and subcontractors for services. Although banks are demanding more equity and higher credit when making loans, Wells says the senior housing market has never been highly leveraged and construction loans are still affordable.

Job Prospects in Commercial Real Estate

Although the credit crunch and pending economic downturn would seem to bode ill for job seekers with commercial real estate dreams, the majority of firms are still looking to hire. Two-thirds of firms responding to FPL Advisory Group's annual hiring and compensation survey reported that they were looking to add staff in 2008. Firms most often were looking to beef up areas that would "enhance the core value of their operations." Top priorities include asset/portfolio management and property management functions. FPL surmises that strong underlying fundamentals and the continued availability of equity capital are driving the demand for talent. Firms also expect salaries and compensation to rise at least moderately.

Tips when shopping for a commercial loan

The February issue of Entrepreneur Magazine has tips on shopping for a commercial real estate loan. While focused on the business owner looking to finance his or her business, the ideas work just as well for anyone looking for cash to invest in a property.

• The article says to resist the urge to go to your existing bank off the bat. Review various loan terms from several lenders. Often you can get a better package from a lender with knowledge of your industry or the type of property you're looking to finance.
• Watch out for recall provisions in the loan which allow the lender to ask for immediate payment. An unwise investor might have to scramble to refinance at the wrong time.
• Although they charge a commission, it's sometimes useful to hire a commercial mortgage broker to help you find the best fit for your circumstances. They can often save time and money in the long run.
• Be sure to hire a real estate attorney to review the loan documents and terms.
• And finally, don't make your decision based on price alone - although important look at the whole picture and how your plans fit with the lender's.

Los Angeles Top in 2008?

Analyzing various factors, Grubb & Ellis analyst Bob Bach predicts that Los Angeles will be the top spot for commercial investment in 2008. Eliminating markets hard-hit by foreclosures and an oversupply of condominiums, Bach focused on cities with tight land supply, continued job growth, and cooperative zoning and regulation.

Los Angeles tops the Office, Industrial and Multi-family categories, and comes in second to Washington DC in retail. The complete list is available through the original Wall Street Journal article, available to members through ProQuest.

The subprime impact on commercial

An article in Wednesday's Wall Street Journal [available for free at wsj.com, though possibly for only a limited time. Here's the more permanent Proquest link], details how the collapse of the subprime loan market for residential real estate is spilling over in to commercial as banks are reluctant to finance new deals.

The Journal reports that the number of major commercial deals has dropped by half in the last six months as banks struggle to recover from a slew of bad mortgage debt. For the commercial market, this fall-off in activity hasn't led to a sharp drop in prices, but rather is still in the early stages of 'cognitive dissonance' where buyers are offering less but sellers are unwilling to accept that the market has turned.

Are you up to speed on Green?

It seems more and more cities are adopting green building standards these days. Jones Lang LaSalle says that currently 1in 7 cities throughout the U.S. already have green building programs or enhancements in place. And that number is expected to rise to 1 in 5 in the next year. Are you making sure your clients and contacts are up to speed on programs in your area? NAR has a collection of Green Building resources at your disposal on our website. And keep up to date with GlobeSt.com's new Green Outlook.