“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
What if the West Valley was about to explode economically and What If you knew this now. CLICK HERE:
By Ryan Lorey, CCIM | May.June.17
For the last five years, cap rates have been compressing from an average of 7.19 percent in 2010 to a low of 6.35 percent shortly before the 2016 U.S. presidential election. This has been due primarily to falling interest rates, which reflects the historically low rates on the 10-year Treasury note. In the financial realm, the 10-year Treasury is the benchmark rate on which many assets either directly or indirectly derive their value.
Since triple-net leased properties with investment-grade, credit-rated tenants are much closer to financial transactions than many real estate investments, it makes sense to expect these properties will react more to swings in interest rates.
However, research shows triple-net transactions have traded in a fairly tight range of 350 to 540 basis points above the 10-year Treasury during the last several years. This compares to investment-rated corporate bonds, which are priced based on the 10-year Treasury with spreads closer to 100 to 150 basis points due to less risk and greater liquidity.
The spread above the 10-year Treasury bill is just a premium attached on the required rate of return of commercial real estate buyers to properties. It is largely a function of real estate’s relative illiquidity as compared to bonds.
This compensates buyers because they cannot turn the property into cash as quickly as they can sell the bond, resulting in more market risk.
For example, CVS Health, which is rated by Moody’s as Baa1, is selling at a 6.34-percent cap rate, while Dollar General with a Baa2 rating by the same agency is selling at a 7-percent cap rate. Other factors come into play, such as lease terms and conditions such as length of term.
The spread widens and narrows as a function of supply and demand of triple-net assets relative to the 10-year Treasuries. The fourth quarter of 2016 saw the spread narrow considerably.
Rather than demonstrating an increase in demand for NNN assets, however, this difference was more likely to be the time lag between interest rate moves and their effect on property values. Usually, more than 60 days elapse before commercial real estate professionals experience transactions closing that reflect the new interest rate changes.
Even before the 2016 U.S. presidential election, the members of the Federal Reserve had indicated that a rate hike was likely. The 10-year Treasury note had largely reflected the market until an unexpected rally after the election caused an almost 60 bps increase above pre-election levels.
As the triple-net market reacts to the higher 10-year Treasury, cap rates will rise to maintain the proper balance of the risk-based premium. As the triple-net leased markets stabilize, commercial real estate professionals will see a new equilibrium close to the historical spread.
Should the Federal Reserve continue with gradual increases in interest rates, the market will adapt by making slight adjustments, which will be reflected in the movement of cap rates. However, most analysts are predicting that 2017 will see two interest rate adjustments by the Federal Reserve in response to rising employment and higher inflation rates.
It will take time for the triple-net transactions currently in due diligence to work through settlement and for the newer comparable sales to start to show the minor corrections. In the current economy, a rate hike would not cause much change in cap rates. Real estate investors seem willing to consider second-tier cities in their search for solid yields.
With the corporate bond market yields still in the 2-percent range, the tendency will be to mitigate upward pressure on the real estate yields.
The Federal Reserve may raise interest rates by as much as 2 percent during 2017, which will cause triple-net leased property cap rates to rise only slightly since that expectation is built into the market. While there may be slight adjustments, the triple-net lease market will continue a fairly steady course this year.
Ryan Lorey, CCIM, Ryan Lorey, CCIM, is a director at Calkain Companies in Herndon, Va. Contact him at rlorey@calkain.com.
SEE IT ALL: http://www.ccim.com/cire-magazine/articles/2017/05/in-sync/
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / 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 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 internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
Please call or text me on my cell: 520-975-5207 or send me an e-mail walterunger@ccim.net
Timeline of Arizona from 900 BC – 2017
Please call or text me on my cell: 520-975-5207 or send me an e-mail walterunger@ccim.net
Under Construction – 12,759 Units Phoenix apartment units CLICH HERE FOR MAP
In addition to the 12,759 units currently under construction, there are 19,254 planned and 9,137 units noted as Prospective. That’s a total of 41,150 units. Email Jim for detailed list of new construction or use the map link above.
WEEKLY APARTMENT CLOSING UPDATE THROUGH August 18, 2017 / Phoenix Arizona Metro.cc
WEEKLY APARTMENT CLOSING UPDATE THROUGH August 11, 2017 / Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH July 28 / 2017 / Phoenix Arizona Metro
WEEKLY APARTMENT CLOSING UPDATE THROUGH July 21 / 2017 / Phoenix Arizona Metro
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
ARIZONA FACTS – YEAR 1848 TO 2013
Timeline of Arizona from 900 BC – 2017
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
Click here to View My Listings and Profile
Click here to find out what is a CCIM:
Click here to view my website:
Click her to join my mailing list :
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
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.
1-520-975-5207
Check out my professional profile and connect with me on LinkedIn.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
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.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
Fax: 602-865-7461
Reasons to Consider me for Commercial Referrals
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- P
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
ARIZONA FACTS – YEAR 1848 TO 2013
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 9 / 2017 / Phoenix Arizona Metro
WEEKLY APARTMENT CLOSING UPDATE THROUGH June 2 / 2017 / Phoenix Arizona Metro
DOWN TOWN PHOENIX IS HOT – MULTI-FAMILY HOUSING ANALYSIS MAY 17-2017
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
Click here to View My Listings and Profile
Click here to find out what is a CCIM:
Click here to view my website:
Click her to join my mailing list :
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
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.
1-520-975-5207
Check out my professional profile and connect with me on LinkedIn.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
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.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
Fax: 602-865-7461
Reasons to Consider me for Commercial Referrals
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- P
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.