Hunt Power has begun the creation of two REITs that will invest up to $2.1 billion in energy infrastructure and gas storage and delivery sectors in the U.S. According to GlobeSt.com, the two new REITs, Electric Infrastructure Alliance of America and Gas Infrastructure Alliance of America, will be backed by Hunt Power and are the first REITs of their kind in the electricity and gas transmission and distribution sector.
Though rents are likely to continue their decline, commercial real estate vacancy rates have already peaked or will soon top out. According to abcNEWS.com, The National Association of Realtors expects the office vacancy rate to rise a tick to 16.7% this quarter and gradually decline to 16.4% in the fourth quarter of 2011. There should be a modest decline in vacancy rates in the office and industrial sectors while retail should hold fairly steady.
The FDIC has said that its list of 'problem' banks has grown from 829 to 860, including many smaller banks straining under the weak economy. According to the San Francisco Business Times, total assets held by the growing number of problem banks fell to $379 billion from $403 billion, underscoring that none of the nation's largest banks are on the list. The banking industry is continuing to make progress in recovering from the financial crisis as credit performance has been improving.
Invesco has signed the largest lease renewal in the Houston, Texas region this year for 10 years and nearly 400,000 square feet at 11 Greenway Plaza. According to GlobeSt.com, the building is one of 10 office buildings in Greenway Plaza which also includes a luxury hotel, high-rise condos, an athletic club, retail, a food court and a transportation center. The entire complex is a 52-acre master-planned community along U.S. 59.
Mecklenburg County, North Carolina is putting the final touches on its first reappraisal in 8 years. County officials delayed the reappraisal two years ago due to instability in the Charlotte market caused by the economic downturn. It is unclear at this point how much values will move in 2011, but an increase in the 10-15% range would not be surprising. To ensure fair property valuations and minimize 2011 increases, it is important to begin communicating with the assessor's office as early in the appeal process as possible. Paradigm Tax Group's team of North Carolina property tax consultants offer over 50 years combined experience in the North Carolina market and have had great success in securing savings for taxpayers of all property types.
In New York City, of the four major commercial real estate sectors, office will take the longest to recover. However, the local NYC office market will fare much better than the national average. According to GlobeSt.com, offices will struggle to recover due to slow job creation and only when companies begin to grow again will they begin to hire and need more space. Good news is that it is predicted that about 125,000 jobs will be created per month next year, followed by 150,000 in 2012. Those numbers are significant improvements from the 87,000 new ones a month this year.
Despite the economic hangover that has been the first three quarters of 2010, the commercial real estate (CRE) market is finally finding its rhythm and is ready to get back to its victorious ways. According to an article from PRWeb, institutional investors have switched from defense to offense making it clear that buyers are alive and well and that the outlook for the CRE market is healthy. Recently a lot more deals have been getting done and the overall consensus is that CRE will come out of the recession just fine.
Despite the real estate market's rise and fall of the past decade, the parallels between now and 10 years ago are striking. According to GlobeSt.com, both prices and sales volume have returned very close to where they stood a decade past. In both post-recessionary periods, real estate investors rightly took pride that overbuilding was not a cause of the decline, yet vacancy soared nonetheless. Still, commercial property continues to attract new investors despite the adverse economic conditions.
The return of the hotel transaction market has taken longer than expected. But, according to Lodging Hospitality, a splash of high-profile acquisitions and a potential wave of distressed assets coming to market have many believing the dam is about to burst.
Saint-Gobain Glass has acquired 50% of the equity from SAGE Electrochromics for the large-scale manufacture of electrochromic glass. According to National Real Estate Investor, the two companies have started this month building a large-scale electrochromic glass plant in Faribault, Minnesota. The plant will cost about $135 million and is expected to promote the use of electrochromic technology worldwide.
Depending on the location within the county, by January 1, 2011, approximately 1/3 of Maryland Property owners will be receiving their Levy Year 2011 Notice of Reassessment values which will be the basis of their real estate tax bills for the next 3 years (2011, 2012, and 2013). The deadline to file an appeal is 45 days of the date of the notice, usually no later than February 11th.
OneWest Bank, the successor to IndyMac Bancorp which was seized by the Federal Deposit Insurance Corporation (FDIC) in 2008 for $10.7 billion, has purchased $1.4 billion in commercial real estate loans from Citigroup Inc. According to Bloomberg.com, Pasadena, California-based OneWest bought a portfolio that includes 600 multifamily and commercial real estate loans. Terms of the transaction were not disclosed.
Despite the lingering sentiment that shopping center developers, owners and managers are still on hard times, there are a number of signs that the industry is improving. According to National Real Estate Investor, same-store sales rose in the first three quarters of 2010 on a year-over-year basis by 3.4% and forecasts for holiday retail sales are predicting a 3 to 3.5% increase over 2009 levels. This would be the largest spike since 2006.
New data points, such as the delinquency rate for securitized commercial real estate loans falling in October for the first time in more than a year, are painting a picture of slowly moderating pain in commercial real estate. According to The Wall Street Journal, the drop came as distressed loans were being liquidated at a more rapid pace with the biggest reason for the decline being the exit from bankruptcy of hotel chain Extended Stay America Inc.
A looming San Francisco, California transfer tax hike could have investors scrambling to close transactions before the law goes into effect December 17. San Francisco voters approved a measure Tuesday, November 2, that increases the real estate transfer tax from 1.5 percent to 2.5 percent for properties that sell for more than $10 million. For deals between $5 million and $10 million, the tax will bump up a half a percentage point, from 1.5 percent to 2 percent.
There is a new ruling in AZ that defines the word "appeal". Formerly a new owner had until December 15 to file (the following December 15 if the property was purchased between December 16 and January 1st) an appeal if the former owner had not filed a petition with the Assessor. Prior to the ruling, if the previous owner filed an appeal with the Assessor and did not appeal the Assessor's response (60 day deadline) on to the state board, the case expired and no additional remedy was available for the current appeal year. The new ruling by the court states that a "petition for review" (Assessor level filing) does not count as an "appeal". To be an appeal, the petition must be filed to the State Board or Court. This new ruling presents a unique and substantial opportunity for new buyers to appeal their acquisitions.
Washington, DC-area REITs are continuing their revival and becoming one of the few success stories in commercial real estate this year. According to GlobeSt.com, total return on the FTSE NAREIT Equity REIT Index reached 24.7% year-to-date at the end of October, nearly triple what the S&P 500 posted for the same period. The Index rose by 4.7% in the month of October alone.
Three Dallas, Texas-area office buildings, totaling more than 1.4 million square feet, have been put on the market and expect to fetch over $300 million altogether. According to the Dallas Business Journal, the capital market team at commercial real estate firm Jones Lang LaSalle has been hired by California-based Cannon Commercial to market for sale their buildings, Galleria I, II and III.
The National Association of Purchasing Management-Buffalo Inc. has reported that the Western New York manufacturing sector showed gains in every index, stark contrast to the results in the previous month. According to Buffalo Business First, the report noted gains in production, new orders, prices and inventories, while employment contracted and deliveries were slower.
The US General Services Administration (GSA) has closed on $527 million in loans for four new buildings in the Midwest and Portland, Oregon. The lending, arranged by Newmark Realty Capital, includes $271 million in construction and $256 million in permanent financing. According to GlobeSt.com, it took Newmark one year to throw together the final lending package which totals about 880,523 square feet.