Welcome to the Coldwell Banker Commercial New York Regional Commercial Real Estate Forum
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Transcript of Welcome to the Coldwell Banker Commercial New York Regional Commercial Real Estate Forum
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Welcome to theWelcome to theColdwell Banker CommercialColdwell Banker Commercial
New York Regional New York Regional Commercial Real Estate ForumCommercial Real Estate Forum
Host Company:Coldwell Banker Commercial Properties Unlimited
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Climb For Kid’s Sake 2007 TeamRaised $35,000
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Climb For Kid’s Sake 2008September 20th – 27th
Our Goal $52,374www.events.org/cbcclimb
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Recent BBBS EventRecent BBBS Event
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Market OverviewMarket Overview
Early Innings of a Early Innings of a Challenging MarketChallenging Market
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Tale of Two MarketsTale of Two Markets
• Investment Sales and Related Pricing
• The Overall Fundamental Picture
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Capital MarketsCapital Markets
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Capital MarketsCapital Markets
Prices are declining as CAP rates return to normalized levels
Active buyers are sidelined
Cash buyers (Institutional) are taking advantage of the market
Increase in foreign buyer interest
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Sales Volume (70%), - However, over $85b of significant deals did close
All cash, assumable mortgages or seller financing are behind the majority of successful transactions this year
The major national banks account for just 9% of acquisition financings
Capital MarketsCapital Markets
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Sources of Acquisition FinancingSources of Acquisition Financing
Source: RCA
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Office: Cap Rates and Office: Cap Rates and Transaction Volume Transaction Volume
Source: RCA
CBD SUBURBAN
CBD SUBURBAN
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Industrial: Cap Rates and Industrial: Cap Rates and Transaction Volume Transaction Volume
Cap Rates (7.35%)
Sales Volume (49%)
FLEX WAREHOUSE
FLEX WAREHOUSE
Source: RCA
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Sources of Acquisition FinancingSources of Acquisition Financing
Source: RCA
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Industrial: Market & Regional Industrial: Market & Regional Volume ChangesVolume Changes
Source: RCA
West
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Retail: Market & Regional Retail: Market & Regional Volume ChangesVolume Changes
Sales Volume (62%)Source: RCA
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Retail Cap RatesRetail Cap Rates
Cap Rates Overall (7%)Source: RCA
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Multi-Family: Market & Regional Multi-Family: Market & Regional Volume ChangesVolume Changes
Source: RCA
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Multi-FamilyMulti-Family
Cap Rates (6.6%)
Sales Volume (45%)
GARDEN MID/HIGH-RISE
GARDEN MID/HIGH-RISE
Source: RCA
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Market FundamentalsMarket Fundamentals
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Market FundamentalsMarket Fundamentals
• Weakening National Picture
• Disciplined Market on Supply Side
• Turn from a Landlord’s to a Tenant’s Marketplace
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OfficeOffice
Absorption (negative)
Vacancy (13%)
Rents (3.9%)
Source: Reis
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IndustrialIndustrial
Net Absorption (225K)
Vacancy (10.3%)
Rents (2.9%)
Average NNN rents:
Flex: $10.21
Manufacturing: $4.70
Warehouse: $4.60
Source: Reis
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Retail: Consumer SentimentRetail: Consumer Sentiment
Source: Reis
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RetailRetail
Absorption (-3.2m)
Vacancy (8.2%)
Rents (2%)
Source: Reis
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Multi-FamilyMulti-Family
Rents (4.4%)
Vacancy (6%)
Source: Reis
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SummarySummary
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Market SummaryMarket Summary
Expect price declines (5% - 15%) for investment properties
Leverage remains scarce (primarily balance sheet lenders only)
Sale inventory increasing significantly but no “fire sales”
Fundamentals indicating a weakening picture through 2009. A transitioning market but the picture is not an unhealthy one
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Services IndustryServices Industry
Revenues will be off in sales and leasing by 20% -30%
Consolidation of providers (mergers and acquisitions) will continue
Market Knowledge - not information will drive “off market” opportunities
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What You Can DoWhat You Can Do
• Drive better credit tenants to properties
• Position the asset within its market, not the market within the asset
• Establish a repositioning strategy to drive value
• Incentive fees for Property Managers
• Corporations need help listing sublet space
• Develop knowledge scenarios that differentiate you
• Stay on top of every piece of business you have
• Use the platform to differentiate
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Welcome to theWelcome to theColdwell Banker CommercialColdwell Banker Commercial
Western Regional Western Regional Commercial Real Estate ForumCommercial Real Estate Forum
Host Company:Coldwell Banker Commercial Properties Unlimited