Sales of office, retail, multifamily and industrial properties asre expected exceed $100 billion in 2010; more than double the $45 billion projected for all of 2009, according to Real Capital Analytics. "We have hit bottom and are starting the new decade on the upswing," the New York research firm said. The projected increase would be the first year-over-year gain since 2007.
Real Capital noted that credit markets have shown signs of thawing, which could help facilitate sales in 2010. It added that capital raising by investors has been stron in 2009, led by REITs, which raised $28.3 billion this year, including $17.2 billion of equity from 59 stock offerings.
Commercial Real Estate , Office Building Sales , Office Space
From Cushman and Wakefiled's Knowledge Center
"THE AMERICAS: LOOKING UP
Things are looking up for a recovery and job growth in 2010 that will benefit North American real estate markets. Meanwhile, South American countries such as Brazil will continue to heat up.
National real estate markets are likely to remain weak particularly early in the year due to uncertainty about the strength of the recovery. This will benefit tenants seeking to secure moderately priced space.
But as recovery takes hold, markets will reach a bottom and begin to improve. The key will be employment growth which, because of the depth of the downturn, may turn out to be stronger than is generally anticipated."
What struck me in this quick overview is that the bottom is a ways away. With last weeks jump in newly laid-off workers filing claims for unemployment benefits, the recovery may be further away than we hope. Unemployment is directly linked with office vacancy. Businesses must add employees to take on additional office space. I believe that there is still a lot of underutilized office space that companies have leases on, but are not using that will have to be filled before we see any reduction in the office vacancy rate. A recovery in 2010 would be great, but I believe the Office Space market will not start it's recovery until 2011.
I am off next week. Happy Holiday to all.
Commercial Real Estate , Lease Negotiations , Office Rental , Office Space , Office Space Negotiations , Office Vacancy Rate
"Cost cutting is still going to be the highest priority" for corporate real estate in 2010, Peter Riguardi, president of Jones Lang LaSalle’s New York region, said in a webcast on office occupier trends Wednesday afternoon. That’s because economizing remains a watchword for many companies, and reducing real estate expenses--whether through blend-and-extend leases or outright shedding of space--represents low-hanging fruit.
Blending and extending, which has come back into favor in the current leasing market, will remain a big trend for the foreseeable future, Riguardi said. It’s one of many opportunities for tenants in these days of reduced rents and greater landlord concessions. The current climate also offers plenty of chances for upgrading the location and the space, and for using market leverage to enhance non-economic lease provisions.
Full Article: For Tenants, It’s About Shaving Costs
Another contributor to the problems to come in the Commercial Real Estate market.
Commercial Real Estate , Lease Negotiations , New York Office Space , Office Rental , Office Space , Office Space Negotiations , Office Vacancy Rate , Tenant Representation
What has been lost in the housing talk recovery is the grim statistics that commercial real estate has fallen 37 percent in value in the last year. This wouldn’t be such a big problem aside from the tiny detail that some $3 trillion in commercial real estate loans are still outstanding. The commercial real estate debacle is already happening with defaults reaching 16 year highs. This is already occurring before many of the commercial real estate loans reach their refinance dates. In some instances banks are simply ignoring non-payment and giving borrowers a few more months or even years. Why? Because they can still claim the note is current and claim the asset at inflated values.
Full Article: The Commercial Real Estate Default Wave is Here
Commercial Real Estate , Office Space
A recent report from the AP: "Oil-rich Abu Dhabi pumped $10 billion into its indebted neighbor Monday, sending stocks soaring and sparing Dubai and the rest of the Emirates federation the humiliation of an imminent default by one of the struggling Arab boomtown's star companies.
The bailout was about more than petrodollar transfers from one United Arab Emirates sheikdom to the other. Dubai officials also seized on the news to try to repair damage done by weeks of uncertainty stemming from their unwillingness to fully stand behind Dubai World as the conglomerate looked to restructure some of its $60 billion in debts."
This should help to calm the immediate fears of a major commercial real estate default in Dubai, but also may foreshadows what will need to happen in the US as the Commercail Real Estate Crash intensifies during 2010.
Commercial Real Estate , Office Space