CRE Report 03.12.2012
March 12, 2012 at 11:50 am | Posted in Radio Show Reports | Leave a commentTags: Albuquerque Economy, Albuquerque Real Estate, Apartments, Baby Boomers, Investing, office, office market, radio show, real estate, Real Estate Investing, recession, retirement, unemployment, vacancies, walt arnold
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
CRE Report 02.12.2011
February 13, 2012 at 9:30 pm | Posted in Market Reports, Radio Show Reports | Leave a commentTags: albuquerque, Albuquerque Commercial Real Estate, CRE, Grammys, industrial, Industrial report, industrial summary, market, market report, office, office market, office report, office summary, Reid Associates, sperry van ness, Titan Development, vacancies, walt arnold
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 Report Featured on News Radio 770 KKOB
August 15, 2011 at 10:44 am | Posted in Market Reports, Radio Show Reports, Videos | Leave a commentTags: Commercial Retail, CRE, CRE Market, CRE News, office, recession, recovery, retail, Retail Recovery, sperry van ness
Retail Recovery
Visit me on Facebook or Follow me on Twitter or visit my website http://www.waltarnold.com.
CRE Report for 08.01.2011 – Real Estate Cycle Snapshot
August 1, 2011 at 2:33 pm | Posted in Market Reports, Radio Show Reports | Leave a commentTags: Hospitality, industrial, Market Snapshot, office, primary markets, real estate cycle, Real Estate Market, Real Estate News, recession, recovery, retail
Market Snapshot
Bob – Walt, you mentioned Stephen Duffy from Moss Adams spoke last Monday at the NAIOP meeting. Did he have some interesting news on the commercial real estate front?
Walt – Good morning Bob, it was an interesting and enlightening talk.
He discussed how there is a tale of two markets, Class A assets in primary markets are experiencing strong values and demand for properties. Current prices reflect a significant difference between trophy properties in major markets and assets in non primary markets. There is a flight to core assets and to quality. Some good news is that all property types have moved out of recession into recovery in this real estate cycle.
Bob – Can you give us a quick snapshot of each property group and how they are faring?
Walt – Sure I’ll give a very brief summary:
Industrial – still fighting through oversupply, but quality properties are selling to investors.
Office – Struggling due to a lagging growth rate, however strong demand for Trophy properties.
Healthcare – Currently performing well in this market. Medical office buildings are outperforming office properties.
Multifamily is strong and getting stronger. Continued strong increases in rents are forecast.
Retail – Has strengthening occupancies and rates, there aren’t a lot of properties selling but again a strong flight to quality for example, Simon’s Properties purchase of ABQ Uptown.
Hospitality – is having rapid and strong growth in fundamentals.
Gaming Properties – There has been a freefall for most gaming properties since 2009, massive distress and defaults. Tribal sovereignty has been confirmed by the courts and it might be difficult for lenders to foreclose on tribal properties.
So that a very short synopsis.
Bob -You mentioned the real estate cycle. So what can someone do once they understand where they are in the cycle and maybe a more important objective is how can you create an exit strategy?
Walt – One thing I forgot to mention Stephen Duffy talked about was, there is opportunity in local non primary markets for local investors to analyze the market and make some good investments. Which ties into your question, yes exit strategies are so important. What is the plan? How long until the next peak? Is this a time to get in or get out?
Obviously, each situation is different, at Sperry Van Ness, we can help analyze the market, look for trends and develop a plan to get in and also a plan to exit the market, through in depth planning, analyzing the market and developing a strategy on when to acquire and sell assets.
Bob – Anything else today and how can people reach you?
Walt – Thanks Bob, I want to mention the auction this Thursday August 4th, 3801 Eubank, opening bid 396,000, a 7,000 square foot office building in Eubank. That’s $56/sf. My number is 256-1255, website http://www.waltarnold.com thanks Bob and I’ll talk to you next Monday.
Albuquerque Commercial Real Estate Report 7.26.10: Hiring A CRE Broker
August 19, 2010 at 10:07 am | Posted in Radio Show Reports | Leave a commentTags: albuquerque, broker's opinion of value, commercial, CRE, economy, for lease, for sale, industrial, investments, leased space, listings, New Mexico, office, office market, opportunities, property, property management, property values, radio show, real estate, retail, sperry van ness, tenant representation, walt arnold
Click HERE to listen to the Commercial Real Estate Report for 7-26-10!
Bob Clark, News Radio 770 KKOB: Walt, if I needed to hire a commercial real estate broker, what skills and abilities would I look for in that person?
Good morning. Commercial real estate is so different from residential real estate and there are just so many more moving parts to the commercial business which includes office, industrial, retail, hospitality, self storage and apartments. There is the investment side; the owner user and also the leasing end of the business and each have their own intricacies. So first off you would want to make sure the broker is an expert in the field of commercial real estate you need. That is the first criteria.
Bob Clark: What else is important in selecting a commercial broker?
Having a level of experience which might include membership in either the CCIM Institute, which requires years to complete the certification process or an SIOR, a select group of 2,800 commercial brokers worldwide is an important component in selecting a broker to work with.
At Sperry Van Ness we talk about having encyclopedic market area knowledge and stress being the recognized expert in the market area. Someone looking for a broker wants to make sure they understand the market and have strong knowledge of it.
Another important trait is a broker that listens to your needs and assesses those needs and then works diligently to complete the transaction and keeps everyone apprised of the progress as it moves toward the completion
Bob Clark: Walt you have talked before about all the parts of the commercial transaction, how can a broker help put it all together?
There are many parts to the puzzle of a commercial transaction and making sure your Broker understands those pieces, like the ALTA survey, Phase One environmental report, space planning, financing, the lease document, the Tenant Improvement process including TI drawings dealing with architects, contractors, attorneys, owners and tenants requires someone with many skills to help analyze the commercial transaction from start to finish and beyond. Continue Reading Albuquerque Commercial Real Estate Report 7.26.10: Hiring A CRE Broker…
Albuquerque Commercial Real Estate Report 7.19.10: Market Resources
August 9, 2010 at 8:58 am | Posted in Radio Show Reports | Leave a commentTags: acquisitions, albuquerque, asset, banks, commercial, CRE, distressed assets, economy, for lease, for sale, industrial, investment, investors, leased space, listings, market report, New Mexico, office, opportunities, property, property management, radio show, real estate, recession, retail, sperry van ness, tenant representation, walt arnold
>>> Click HERE to listen to the Commercial Real Estate Report for 7-19-10 <<<
Bob Clark, News Radio 770 KKOB: Walt this is such a difficult environment in commercial real estate, do you have any advice on how to navigate this market.
Walt Arnold: Bob, this is a commercial landscape seen for the first time. We are in an extremely tight credit market, strict regulations from the feds on lending, high unemployment and many financial constraints on companies.
This is a market that requires professional advice from someone that is in the commercial real estate market every day. At Sperry Van Ness we are analyzing this market daily, we are up to speed on the developments in the market and can advise landlords, tenants, buyers and sellers on how to position themselves and their property to have the greatest amount of success in this market.
Bob: What are some of the services you provide that can help people make decisions?
Walt Arnold: We have a myriad of sources that we pay to belong to pull data from to provide our clients with the best information to make good decisions, along with being an SIOR, one of 2800 worldwide, and the CCIM membership that requires years of classroom study and analysis, I am able to provide clients a wealth of information to analyze each situation to its fullest.
Bob: You also have spoken before about Sperry Van Ness’ marketing materials and the online publishing system. Can you tell us more about it?
Walt Arnold: We are able to provide our clients with the best marketing materials for the properties in the industry. We can also create a specific website for a specific property through our proprietary OTS system. We have the experienced brokers, tools and programs to analyze lease spaces for tenants or present property for sale to the largest number of Continue Reading Albuquerque Commercial Real Estate Report 7.19.10: Market Resources…
Q2 Results in Rising Vacancy Rate for Office
August 6, 2010 at 11:17 am | Posted in Market Reports | Leave a commentTags: albuquerque, commercial, CRE, economy, for lease, for sale, industrial, investors, leased space, market report, New Mexico, office, office market, real estate, recession, retail
The Albuquerque office market slipped in Q2-2010, with a New Mexico Business Weekly report suggesting a historic vacancy rate approaching. The job market continues to struggle and it results in a rising vacancy rate for office space:
Office vacancy rates climbed to 17.9 percent in the second quarter as Albuquerque underperformed the nation. With the economy teetering on the verge of a double dip recession, an historic 20 percent vacancy rate could be coming.
The article includes some interesting charts from CB Richard Ellis reporting the latest industrial net absorption, completions and vacancies, retail asking lease rate ranges, and an overall office review the Albuquerque market in the second quarter.
Industrial Net Absorption, Completions, Vacancies
Retail Asking Lease Rate Range
Office Overview Q2 2010
The article continues: Continue Reading Q2 Results in Rising Vacancy Rate for Office…
Metro Office Vacancy Hits New High
July 23, 2010 at 12:21 am | Posted in Market Reports | Leave a commentTags: albuquerque, commercial, CRE, economy, employment rate, for lease, investment, jobs, leased space, market report, New Mexico, office, office market, property, real estate, recession, tenants
In our last weekly commercial real estate radio report on KKOB News Radio 770, we talked about the retail markets and how critical job growth is to fortifying consumer confidence. A report this week in the Albuquerque Journal business outlook talks about the road head in job growth as office vacancies have hit a new high. However, the ABQ market is doing better than the national average. Industry experts are looking to past trends to predict the break in the cycle, and ultimately, that prediction is that there will be one… at some point. The article begins:
The stagnant job picture continues to weigh on the rental market for office space, pushing up the vacancy rate to a new high of 17.7 percent in the second quarter, according to the latest Office Trends Report by Grubb & Ellis New Mexico.
“Any chances for even a small rebound appear to be slight at best,” the report says.
More than a half million square feet of office space has gone empty in the Albuquerque metro area since the second quarter of 2009, when the office vacancy rate was 14.1 percent. The vacancy rate set a recent Continue Reading Metro Office Vacancy Hits New High…
Lender Ordered Auction: Commercial Real Estate Industrial Warehouse Albuquerque, New Mexico
July 19, 2010 at 8:47 am | Posted in Property Listings | 4 CommentsTags: acquisitions, albuquerque, asset, Auction, commercial, CRE, for sale, investment, investments, leased space, listings, market, New Mexico, office, opportunities, property, real estate, sperry van ness, walt arnold, warehouse
9920 & 10000 Trumball SE, Albuquerque, New Mexico | View Google Map!
Auction Date and Time
August 5, 2010 @ 11:00 AM
Public Inspection Date and Time
July 29, 2010 11:00 AM – 1:00 PM
• Well maintained industrial flex space consisting of two legal separate buildings that have been joined to create one structure.
• 19,757 +/- square feet of useable warehouse space
• Built in 1970
• Zoned M-1
• Improvements sit on 1.06 +/- acres
• 6 Ground Level Doors
• Excellent location – just blocks from Central Avenue
• In close proximity to Interstate 40
• 154 miles from Kirkland Air Force Base
• Foreclosed Lender orders Nationwide Portfolio Liquidation – Buy Now at Your Price!
• Offers considered pre-auction, Seller Financing Available to qualified buyers
• No Back Taxes & No Liens – Clear Title with Title Insurance Provided! Continue Reading Lender Ordered Auction: Commercial Real Estate Industrial Warehouse Albuquerque, New Mexico…
Whitepaper: The Benefits of Professional Property Management
July 19, 2010 at 6:16 am | Posted in Whitepapers | 3 CommentsTags: albuquerque, asset, asset management, commercial, CRE, for lease, investment, investors, leased space, net operating income, office, operations, portfolio, property, property management, property values, real estate, retail, tenant, valuation, walt arnold, white paper
*see below for printable version.
The reality is that commercial real estate properties and portfolios that are actively managed not only perform better on an operating basis, but in most cases, they yield more on disposition as well. That said, my question is this: Why is it that so many commercial real estate principals still attempt to manage their own portfolio? While the answers clearly vary on a case-by-case basis, the most common reason usually boils down to the perception that money can be saved by not paying third party management fees. Indeed, the age old dispute between “do it yourself” and “do it for you” business models is alive and well in the commercial real estate industry. In the text that follows I’ll make the case for professional management as a value added service that is accretive to overall property returns.
Let’s begin our discussion with discussing the difference between property management and asset management. It was not too long ago that there were very distinct differences between these two disciplines. Property managers were deemed to be tactical in nature, focusing on day-to-day operating issues such as routine maintenance, minimizing vacancy, collection of rent/lease payments, and first tier communication with tenants. Asset Managers on the other hand were strategic in nature focusing on adding value to the property by making positioning decisions that would increase net operating income (NOI) and valuation. While these distinctions still exist among some firms, the increased sophistication of professional management firms over the past few years have caused the lines to be blurred to the extent that many firms now provide both disciplines in an integrated service offering.
As an owner of commercial real estate, unless you’re a very large and sophisticated commercial enterprise, attempting to do it yourself or hiring internal staff, it is not only inefficient and very expensive, but in this author’s humble opinion it’s very short sighted. You see, the right question to ask is not can you manage your own portfolio, but should you? Let me provide an analogy for illustrative purposes…I could do my own taxes, I have the financial acumen to do so, and who knows my financial position better than I do? Why should I pay a CPA to do something that I could clearly do myself? Following is how I viewed the decision to outsource Continue Reading Whitepaper: The Benefits of Professional Property Management…
Walt Arnold, SIOR, CCIM
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