If you ever injected truth into politics you have no politics.
Will Rogers
OCTOBER 21, 2013 – MARK HESCHMEYER, EDITOR – WWW.COSTAR.COM
IN THIS WEEK’S ISSUE:
U.S. Investors Take Foot Off Gas Even as Leasing Momentum Continues ………………………………………………………………………….. 1
Major Deals in NY, LA and San Francisco Demonstrate Rising Investor Confidence In Office Market ……………………………………… 3
REITs Prune Portfolios In Pure-Play Push ………………………………………………………………………………………………………………………. 6
Didn’t That Used to Be an Office Building? ……………………………………………………………………………………………………………………… 8
As CRE Prices Improve, So Do Sizeable REO Dispositions ………………………………………………………………………………………………. 9
KBS REIT III Ditching Debt Investments for Core Properties ……………………………………………………………………………………………. 10
Housing Moves Up with the Stock Market, By a Lot in Some Cases ………………………………………………………………………………….. 10
Capital Markets Round-Up ………………………………………………………………………………………………………………………………………….. 11
Could Advance Auto Parts, CarQuest Merger Create Retail Real Estate Spare Parts? ………………………………………………………… 12
Running Out of Cash, Coldwater Creek To Explore Strategic Alternatives …………………………………………………………………………. 12
Facility Closures & Downsizings …………………………………………………………………………………………………………………………………… 12
New Version of CoStar’s iPad App Packs Powerful Analytics Punch …………………………………………………………………………………. 14
Watch List Ads Add Value …………………………………………………………………………………………………………………………………………… 15
U.S. Investors Take Foot Off Gas Even as Leasing Momentum Continues
Commercial Property Prices Moderated in August Despite Strong Absorption of Available Space Across
More Markets
Even as businesses continue to lease office, industrial
and retail space at a faster clip, prices for U.S. commercial property leveled off in August as investors
reacted to signals that the Federal Reserve was considering plans to begin tapering its elevated bond
purchasing activity once the economy fully achieves firm footing. Although long anticipated, the news caused investors to pause and take stock of the overall economic impact from any reduction in the Fed’s quantitative easing program, which is expected to result in higher interest rates and increased borrowing costs. The ‘August recess’ in pricing growth was apparent in the two broadest measures of aggregate pricing for commercial properties within the latest CoStar Commercial Repeat Sale Indices (CCRSI) released this week, which analyzes property sales through August. The equal-weighted of the U.S. Composite Index, which reflects the pricing impact of more numerous smaller transactions, edged downward by 1.1% in August, while the valueweighted version of the Composite Index, which is influenced by larger transactions, expanded by 1.6% during the same time period. While the monthly performance reflected the immediate market reaction to the Fed, pricing for commercial property continued to rebound from post-recession lows on an annual basis, with both segments of the CCRSI
Composite Index increasing by nearly 10%. Commercial property sales volume was also up in August. The number of repeat sale transactions for the month increased 15% from the same period one year ago, while the value of properties in those transactions increased 17%. The percentage of commercial property selling at distressed prices remains near a four-and-a-half year low.
STRONG ABSORPTION CONTINUES TO SUPPORT BROAD RECOVERY
Meanwhile, businesses continued to lease up available space across the three major commercial property types — office, retail and warehouse. For the first three quarters of 2013, net absorption among these three property types totaled more than 240 million square feet in the U.S., the highest level for the first three quarters of a year since 2008. Leasing activity first began to strengthen in core CBD office markets, such as New York, San Francisco and Houston, and in large distribution markets such as Dallas and Chicago, which led other markets in absorption within CCRSI’s Investment Grade segment and reflected in the faster pricing growth in this index since 2009. More recently, increased leasing activity has spread into CCRSI’s General Commercial segment, indicating a broader and more sustained commercial real estate recovery. In the office market, for example, nearly 90% of total net absorption over the last year was in suburban submarkets. Pricing in the General Commercial Index rose by 3.7% in the last quarter, compared with growth of 0.1% in the Investment Grade Index. While the slow down in pring growth for commercial property in August appears to be a blip in investor confidence that eased in September when the Fed said it would delay any tapering of its quantitative easing policies, investors will be watching economic indicators carefully in coming weeks. As CoStar noted in its CCRSI update, further economic uncertainty, largely stemming from the U.S. government shutdown and debt ceiling
debate, may lead to further volatility in pricing in the near term.
READ MORE…
THE WATCH LIST – A WEEKLY NEWSLETTER FOCUSING ON CHANGING MARKET CONDITIONS, COMMERCIAL REAL ESTATE
a little about me and my expertise – video
LAND SPECIALIST – LAND EXPERT – INVESTMENT BROKER – ARIZONA
https://www.youtube.com/watch?v=PPs3kpKR4nY
http://en.wikipedia.org/wiki/Timeline_of_Phoenix,_Arizona_history
http://en.wikipedia.org/wiki/Phoenix,_Arizona
3
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial Investment Real Estate Broker in Arizona now for 15 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial landspecialist in Phoenix and a Landspecialist in Arizona.
WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
we are at on the a rise of the cycle in Commercial Real Estate. so there is only one way and it’s called we are going up and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME
We barely could give land away the last few years, but times are changing. Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.
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 in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me 520-975-5207 (cell) 602-778-5110 (office direct).
Thank You
Walter
Walter Unger CCIM
Associate Broker
Kasten Long Commercial
2821 E. Camelback Road, Suite 600
Phoenix, AZ 85016
Cell: 520-975-5207
Direct: 602-759-1202
Office : 602-445-4141
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