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Wed, Mar 2, 2016, / Yahoo Finance / By Lawrence Lewitinn
Recent record data in commercial real estate may be masking some warning signs in the property market.
The U.S. commercial real estate market just posted its second-best January ever, with $44.6 billion in transactions for that month alone, according to Real Capital Analytics. The data firm’s figures tally properties and portfolios of such things as office complexes and income-producing apartment buildings valued above $2.5 million.
January’s number combined with the $73 billion in transactions for December brings the commercial property market to its highest dollar total for any 60-day period ever.
While the dollar number is up 12.7% from last year, the volume of transactions is down 7% from January 2015, notes Jim Costello, vice president of Real Capital Analytics.
“It is the momentum issue that’s of concern,” he said. “A sign of reduced liquidity and fewer transactions, that’s a bit of a caution flag. … It’s still a huge number of deals that happened in in the month, but it’s a momentum issue that has people concerned.”
The type of transaction also gives Costello some concern. “A significant portion of it – 42% – was tied up in portfolio or entity-level sales,” he said. “That’s a situation where a very large capital source, often a global capital source, will come in and buy a whole slew of buildings at once.”
However, the sale of individual properties – the cornerstone of the commercial real estate market – was down 18% from the previous year.
Nonetheless, Costello remains optimistic about the U.S. commercial property market despite – or because of – global market volatility.
“Compared to other parts of the developed world, we’re still the fastest growing, most stable, most secure location,” he said. “There’s still a lot of foreign capital that needs safety and stability, and I think they’ll be looking to the United States. Well-leased commercial real estate is going to act as a bond equivalent for these investors. And I think we’re going to continue to see capital inflows for that.”
Although there are some concerns that buyers from China will pull back on their U.S. investments, Costello expects money to find its way to American commercial properties.
“There are a few signs that foreign buyers arereassessing what they’re doing,” he said. “But the funny thing I think will also happen, just given the turmoil that we see in a place like the Middle East, [is that] there are a lot of very wealthy individualsthat need a safe place to park capital. I think we’re starting to see signs of that money coming out of the Middle East to the United States just given the ongoing turmoil in the region.”
Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona. Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.
I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international. Click here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
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