CRE Report 03.12.2012

March 12, 2012 at 11:50 am | Posted in Radio Show Reports | Leave a comment
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Where are all the jobs?

Bob – Walt you mentioned attending the Urban Land Institute Luncheon last week and some of the interesting trends they talked about, can you tell us about some of those trends.

Walt – Yes thanks Bob, good morning. Urban Land Institute presentation discussed some trends that will affect commercial real estate.  One trend that is developing is “Less is Better”. Tenants and owners are beginning to squeeze more out of every square foot of space in every type of commercial space. This efficiency means less square footage, but it also is about creating environments that are multi-dimensional, adaptable and create a greater intensity of use.

What does that mean?  It means we are going to see office and commercial space that aligns itself with this work from anywhere, at anytime, 24/7 workforce and we will see changes in spaces that start to reflect this change in mobility and adaptability more and more.

Bob – The name of the presentation is” Where the Hell are the Jobs” (NOTE–Soften it if you want).  Did you get an answer?

Walt – The world is obviously getting smaller and we have seen globalization of capital, instant technology and labor.

Workers will need college education with degrees for New Mexico to gain substantial job growth in this new economy. We are competing with 49 other states for global markets.

The majority of jobs are going to be in Medical, Education, Healthcare, and customized manufacturing.   Meds and Eds is a phrase you will start to hear more often.

So for real estate investors, commercial buildings with those types of tenants are going to be less risky and hopefully more profitable.

Bob – Anything else for us today?

Walt – For all the Boomers get ready for extended employment! 40% of Boomers say they don’t have enough money to retire. So Bob, make sure you take care of that golden voice of yours, you might need it a while!

The Boomers are going to ramp up Senior Housing requirements for the next several years and Albuquerque has already seen strong growth in the Senior Housing and Assisted Living markets.

With declining home ownership rental-housing demand will continue to grow and the demand for rental units will remain strong for the next few years. Think about stricter mortgage requirements, more waves of foreclosures and many families rethinking the costs of home ownership will keep the demand for apartments strong.

Bob – How can people contact you to discuss commercial real estate?

Walt – Thanks Bob.  Call me, Walt Arnold at 256-1255, become a fan on Facebook, follow me on Twitter or visit my website waltarnold.com for current listings in the Abq area.  Sperry Van Ness is a full service commercial real estate company helping Landlords and Tenants solve space and lease requirements, investors maximize their cash flow and rates of returns through investment in commercial properties and through our professional property management we help owners maximize cash flows and preserve assets. Hey Bob, happy first Monday of daylight savings time. I’ll talk to you next week.

Photo Credit http://usdailyreview.com/tag/unemployment

Albuquerque CRE Report 02.19.12

February 22, 2012 at 10:29 pm | Posted in Market Reports, Radio Show Reports | 1 Comment
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Albuquerque retail market

Bob – Walt you gave an update on the office and industrial markets last week, what about the retail market?

Walt – The retail market ended the year with a total vacancy rate just over 12%, which is down slightly from a year ago, asking rates vary widely, from the aging conditions of some of centers, to the superior location and synergy of other centers.

Older strip centers are around a median asking rate of $12 per square foot per year, NNN, neighborhood centers are around $14 per square foot per year, NNN and regional centers like Coronado and Cottonwood have a median asking rate of approximately $48 per square foot per year, NNN.

ABQ Uptown has a median asking rate of $34 per square foot per year and some superior locations have asking rates upwards of $30 per square foot per year based on their location, for example the Paseo Del Norte Corridor.

Construction completion was 61,000 ft. in 2011, so still very little construction was completed last year.

So in summary from year ago, vacancies are down, construction is up, net absorption is up, and asking lease rates are generally unchanged from a year ago with a few exceptions

Bob  – Walt you’ve mentioned location several times, is it still location, location, location?

Walt – Well, location is very important. There are some other issues, here’s an acronym that might help with retail site selection PASTA V.

P – Parking, if you’re a retailer you need at least five spaces per thousand square feet (5/1000) of building to parking spaces ratio and the closer the spaces are to the front door, that is better.

A – Access, the site needs to have convenient access, preferably with more than one way to enter and leave the center.

S – Signage, building facade signage should be visible from at least 200 feet.

T – Traffic, a retailer obviously needs to have strong traffic patterns to survive, including intersections with traffic lights.

A – Activity, the best retail locations offer a variety of businesses to attract as many shoppers as possible.

V  – Visibility, watch for trees and other obstacles that block the visibility of the center. A retail center needs to have great visibility from the street.

Bob – How can people contact you to discuss commercial real estate?

Walt – Thanks Bob, call Walt Arnold, the Sperry Van Ness at 256-1255 or check us out on the web@WaltArnold.com. I hope everyone has a great Presidents’ Day and Bob I’ll talk to you next week

CRE Report 02.12.2011

February 13, 2012 at 9:30 pm | Posted in Market Reports, Radio Show Reports | Leave a comment
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Office and Industrial updates

Bob – Good morning Walt, What do you have for us today?

Walt – Bob, I know you’re not a big Paul McCartney fan, but I really enjoyed the Grammy’s last night and his performance at the end was awesome.  But I digress, back to commercial real estate.

Today I wanted to give a year-end summary for office and industrial markets for the Albuquerque metro area,

The Albuquerque office vacancy was 18.7% which is slightly up from a year a year ago.  Some notable construction completions were the U.S. Forest Service building and DEA both completed projects in 2011. REDW also occupied a 46,000 ft.² built to suit in December 2011.

Median asking rates for the market were at $15.50 per square foot down $.13 from a year ago.

Blend and extend strategies where the landlord gives the tenant some concessions now and extends the lease term for longer a longer period of time are still working in this market. Most landlords are doing all that they can to retain tenants.

Class A space is $22.50 per square foot per year

Class B space is $17.73 per square foot per year

Class C space is $14.00 per square foot per yea

Bob – What about the industrial markets?

Walt – At the end of 2011 the vacancy rate in the industrial market was at 9.4%.

Some notables that happened in 2011: 609,000 ft.² of the former GE plant in the South Valley was removed from the market statistics when the building was demolished. CNM also moved about 82,000 ft.² out of the market vacancy numbers by occupying a building at Jefferson and Alameda; those two properties removed   1.7% of the industrial market from the vacancy statistics. That one way to improve the numbers is to remove supply from the market

Another notable was that US foods built a 134,000 ft.² building in the South Valley.   Only 23,000 ft.² of speculative space was built in the Albuquerque market in 2011.

Median asking rates: $6.69/sf/yr on a triple net (NNN) basis down 16 cents from a year ago and R&D/Flex space vacancy was at 9.5%.

Bob – If you were handing out any awards for last year, do you have any winners?

Walt – Yes I do, it would have to go to Titan Development/Reid and Associates for completing the Forest Service Building in the Journal Center, also for selling both of those buildings for approximately 50 million dollars and also the completion of the REDW building in the Journal Center.  If they were at the Grammys they would be like Adele, they would have won all the awards and been the star of the show, so congratulations to Titan Development and Reid and Associates for a great year.

Bob – Walt, how can people contact you for information on commercial real estate?

Walt – Thanks Bob, they can call Walt Arnold, 256-1255 or check us out on the web at waltarnold.com also follow me on Twitter of become a fan of Sperry Van Ness on Facebook.  For all you guys and gals out there don’t forget tomorrow is Valentines Day.  Make tomorrow a great day. See you next week!

CRE White Paper

February 6, 2012 at 12:22 pm | Posted in Whitepapers | Leave a comment
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Getting your property financed

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CRE Report for 01.22.2012

January 23, 2012 at 12:39 am | Posted in Market Reports, Radio Show Reports | Leave a comment
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Lease expiration tips for tenants.

Bob – Walt, if I was a commercial tenant in building and my lease is closing in on its expiration date, what are my options?  What should I be thinking about?

Walt – Bob, most tenants don’t anticipate the time it takes to either renew their existing lease of look at other possibilities in the marketplace.

The first option is to do nothing and try to stay in a month to month tenancy with no protection against the owner giving 30 days notice to vacate.  There might also be a “holdover charge” in the lease which the landlord can charge and that additional amount is usually 25% to 100% increase in the lease rate.

Bob – That’s a little scary, what about renegotiating for myself, it can’t’ be that hard, can it?

Walt – It’s like my father in law use to say you don’t know what you don’t know.  If you’re not in the market every day, a tenant might risk paying more than they should in this current market, they might also not be aware of current market incentives offered by landlords, there are some commitments in the fine print of the lease document that, in coordination with an attorney, need to be discovered and addressed to avoid clauses that could be harmful to the tenant in the lease, and most importantly it takes time away from the business to accomplish all this and it take the focus off the primary objective, your business.

Bob – Walt, I take it this is where you tell me how the Tenant Representation process works and how you can help tenants renew or relocate in this market.

Walt – Yes Bob, thanks for the softball. At Sperry Van Ness our brokers have handled thousands of leasing assignments we have the experience in getting the best possible results.  This is done at no costs to the tenant as the landlord pays the commission when the lease is executed.  We provide up to date relevant market information and guide our clients through the process from the initial meeting to move-in and beyond.  And finally the tenant representation process allows us to do what we do best which is the leasing component and allows the business owner do what they do best and that is to keep their focus on running the business.

Bob – How can people contact you today to talk about commercial real estate?

Walt – Thanks Bob, call me, Walt Arnold, on my direct line 505-256-1255 or check us out on the web at waltarnold.com.  Also if you have an issue regarding commercial that you need help with or want to talk to someone about give me a call and we can discuss it.  Talk to you next week, with my prediction for the Super Bowl, what else is there to talk about the next couple of weeks? Have a great week!  Also check out Sperry Van Ness on Facebook become a fan or follow me on Twitter for daily CRE news updates.

Albuquerque CRE Report for 01.09.12

January 9, 2012 at 10:35 am | Posted in Radio Show Reports | Leave a comment
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New Year strategies for commercial properties investors, owners, buyers and tenants

Bob – Happy New Year!  Our first commercial report of 2012, what do you have for us to start off the New Year!

Walt – Happy New Year Bob and I hope you had a great time over the Holidays and the New Year.

I know you’re not a big New Year Resolutions advocate, but I wanted to talk about some New Year strategies for commercial properties investors, owners, buyers and tenants of commercial properties.

Bob – New Years Resolutions are difficult to keep and it is difficult for people to keep them.  But I’ll listen, what ideas do you have?

Walt – I think this is a great time for those involved in commercial properties to make some strategies and take some action to move forward on financial goals, which may include real estate.

Some quotes I remember are, “every journey begins with a single step”, or “if you aim at nothing you are bound to hit it”.  A question to ask this time of year is, “what is my exit strategy for the properties I own”, or “what can I do today to start looking at investing in commercial real estate”?

Those answers might not even come this year, but it’s important to start thinking about them now and develop the steps to move forward in that direction.

Bob – I would think this is not a great time to sell properties, but it appears to be a better time to buy properties.  How far in advance do someone need to start thinking about buying, selling or leasing?

Walt – There are many aspects to consider, for example a business that owns it real estate might say, “I need to raise some cash, but my bank won’t lend me any money”, a sale-leaseback might be a way to raise some cash and put cash back in the business to fund operations.

An investor just starting out might have the question,” how do I start investing in this market with all this opportunity to buy properties?”

A company currently leasing might ask, “I want to buy instead of lease, what do I need to know to get started?”

All of these decisions take time and planning.

Bob – So you’re saying there are a lot of things to consider and it might happen quickly or it could take time to develop a plan to decide what to do and how to go about it?

Walt – These aren’t snap decisions like, I need to lose 20 pounds, which by the way I do, these decisions take time and it helps to have people that can help define the strategies and a game plan to work through the issues and come up with solutions to accomplish these goals.

Bob – Walt, how can people get a hold of you to discuss how to make a strategic plan for 2012 and beyond?

Walt – Thanks Bob, my direct line is 256-1255, website waltarnold.com.  Let’s talk about strategy for 2012 and beyond.  You can connect with me on Facebook or Twitter.

CRE Report 12.19.2011

December 20, 2011 at 9:13 am | Posted in Market Reports, Radio Show Reports | Leave a comment
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End of the Year Budgeting for Property Owners

Bob – Walt as we approach the end of 2011 and the Holidays are upon us, what are some things commercial property owners should be considering at the end of the year.

Walt – One thing all investment property owners should consider is establishing a budget for the upcoming year and included in the budget should be the amount of distribution or money that you want to make to yourself.  Creating or updating a budget is forward thinking and helps to put money aside for items that will need to be replaced in the coming year and creates a plan for replacing parts of the property that will fail eventually.

Bob – What if someone rents a single-family house or a Four-plex, should they create a budget?

Walt – With larger properties it is a requirement to track income and expenses against the budget and this helps keep the property manager aware of any categories which have a surplus or shortage against the monthly budget.

Spending the time to create a budget for any size or type of investment property is very beneficial to the success or failure of an investment property.  For a single family rental or a Four-plex owner to spend the time to create a budget will be one of the best exercises they can do to preserve the asset and increase cash flow. Don’t neglect working on a budget for 2012.

Bob – Any other year-end tips for property owners?

Although we have already had some cold weather and more on the way, continue to winterize any water outlets or exposed water sources on the property, check gutters and canales for leaves so they don’t make a leaf dam at the drain creating ponding of water on the roof, and one last idea is to buy snow melt and snow shovels ahead of time because when it snows and you need it, everyone else will also need it and those items will be difficult to find when you need it the most.

Bob – Since there won’t be a Real Estate report next week, any year-end thoughts or New Year predictions today?

Walt – First, I would like to say thanks for talking to me almost every Monday morning this year; I appreciate you having me on the show, and Jen also thanks to you.  Sometimes this time of year is more hectic and stressful than it should be, I hope everyone has a great holiday season and New Year with an over emphasis of grace this Christmas season.

Next year will be a better than this year, a little, as we head on a slow gradual climb out a very tough market and one of the worst recessions in history.  I know that at Sperry Van Ness we are looking forward to 2012.

My number is 256-1255, website waltarnold.com.

Bob, the best to you, your family, the KKOB staff and your listeners. I will talk to you next year.

CRE Report 12.05.2011

December 15, 2011 at 12:06 pm | Posted in Market Reports, Radio Show Reports | Leave a comment
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Unemployment down, will CRE rise?

Bob – Walt, there has been some good news in the job market, unemployment is moving lower, now nationally 8.6% and even lower here.  Sounds like good news for commercial real estate?

Walt – It is definitely a good sign!  Unemployment is at the lowest levels in 32 months, 120,000 jobs added in November, with strong growth in hospitality and retail, but also gains in manufacturing, auto sales and even an uptick in housing.  Consumer confidence is improving and business investment is up. Unfortunately about half of the improvement in the unemployment rate was due to workers dropping out of the workforce.

But, if the trend continues for a while, it will be great news for all types of commercial real estate. As we have talked about before we need jobs to improve the commercial real estate market. Hopefully those jobs numbers will keep going up.

Bob – Speaking of going up, the REDW building in the Journal Center is looking close to completion.  What is going on with that construction project?

Walt – I was talking with Bill Smith of Reid & Associates last week and that building is a great story for the Design Build process.  In the Design/Build process the client selects the builder based on their qualifications and their ability to make the project a successful one. The building was initially coming in at costs that were jeopardizing the project.  Reid & Associates stepped in and the property is coming in where it needs to be costs wise and also on time for a December 2011 move in for the accounting firm.

REDW building is located at Jefferson and Masthead in the Journal Center,  a 45,000 square foot LEED Certified building in the heart of the Journal Center.

Bob – Walt, what else do you have for us today?

Walt – Since it’s December, I thought I would give an update on the Albuquerque Retail Market. After record setting Black Friday sales have raised the hopes for a great holiday season.  Maybe this will be the start of stronger retail sales moving forward.

The current overall retail market vacancy is 9.4%, with about 80,000 square feet under construction.  Retail asking rates average about $14.25 per square foot per year for neighborhood centers and around $20 per square foot per year for Power centers.  Rates have come down roughly 13% from a year ago.   Moving forward vacancies will be decreasing slightly, asking rates trending lower and landlords of older centers doing whatever they can to get and keep tenants.

Bob – How can people contact you to talk about commercial real estate?

Walt – Thanks Bob, call Walt Arnold at Sperry Van Ness, 256-1255, website is waltarnold.com. Hey Bob, it looks like it might be time to get those skis and snowboards waxed up and ready to go.  I might have to call a “Special Company Board Meeting” in Taos this week! Hey Bob, have a great week.

For daily CRE news updates follow me on Twitter or find me on Facebook.

CRE Report 11.21.2011

November 28, 2011 at 12:37 pm | Posted in Market Reports, Radio Show Reports | Leave a comment
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News from SIOR, NAIOP, and Urban Land Institute conferences.

Bob – Walt, what do you have for us today?

Walt – Well, I went to the Society of Industrial and Office Realtors (SIOR) market review and outlook at the NAIOP meeting on Monday and the Urban Land Institute meeting on Friday so I got some great info last week and wanted to pass some of it along.

The key factor at both meetings appears to be the need for jobs to start to get us back on a road to recovery.  New Mexico could see more job losses in government sectors as all levels of government are feeling the pinch of cutbacks.

Another topic was the office market vacancy which is 18.3% and one of the reasons is emerging technologies, as workers are working more effectively with technology.  Workers are able to connect to the internet wirelessly almost anywhere.  This trend will continue to have an effect on the office market.

Bob – Walt, that trend of working from home has been around for some time, but hasn’t really caught on.  What’s different this time around?

Walt – This time it also involves all those 20 and 30 year olds that multitask and can work from anywhere at any time.  So working from wherever will continue to grow stronger and will have some negative impacts on office space.

Bob – You also mentioned the Urban Land Institute, what was the discussion at that meeting?

Walt – One interesting point from Mark Lautman  was that all the states around New Mexico are winning the site selection battle for new companies and are gaining jobs; unfortunately, New Mexico is not really in the game at this time. So we need to do something to get out of this scenario and start making New Mexico “the place” to relocate.

Todd Clarke also spoke about the strength of the apartment market and the need for at least 4,600 more apartments in Rio Rancho and 1,300 more apartments needed in Albuquerque.  There was also discussion on how the youngest of the adult population, the millineals,  they have a desire for less space and less things and that will affect  how apartments will be built in the future and also where.  There is a much greater demand for housing to be on transportation corridors and in developments that minimize driving.

Bob – Anything else for today and how can people contact you to talk about commercial real estate?

Walt – There were a couple of quotes that came out of the meetings, one that I would like to quote was regarding how Landlords need to make vacant space as appealing to tenants as possible.  Debbie Harms,SIOR, quote was,” You aren’t going to have to buy a prom dress for that pig yet, but you are going to have to put some more lipstick on it.”  So get those vacant spaces ready to lease, it will help!

If you want to talk about commercial real estate. Give me a call, Walt Arnold, 256-1255, website waltarnold.com you can also follow me on Twitter of find me on Facebook for up to date news on all things CRE.  Talk to you next week.

SIOR Conference

November 21, 2011 at 6:30 pm | Posted in Radio Show Reports, Videos | Leave a comment
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CRE Video Report 10.27.11

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