Tag Archives: commercial

Albuquerque CRE Report 7.23.12

Posted on by

Bob - Walt, what you have for us today?

Walt - Good morning Bob, I wanted to update the industrial market this morning and go over some second-quarter numbers.

The industrial market leased some space last quarter, about 100,000 ft.², with mostly smaller tenants. As with most of the markets these days the moves were just trading spaces from one building to another. Unicor moved out of space in the airport area and took 24,000 ft.² on Broadway. DirecTV vacated 15,000 ft.² in the North I-25 corridor and leased 18,000 ft.² in the Westside submarket.

The vacancy rate declined to 9%, which was down slightly from last quarter and up slightly from a year ago.

Any construction of speculative space remains on hold. There was only 30,000 ft.² of construction completions last quarter, which is a very low number.

Asking rates remain unchanged at $6.50 per square foot per year on a triple net basis, with the tenant paying all expenses in addition to rent.

Bob - Walt how does the current unemployment rate, in Albuquerque, of 7.4% impact the industrial market? Does this current unemployment rate transfer over to the vacancy numbers you’re talking about?

Walt - Bob it does, the current level of jobs in the industrial market is not supporting the amount of space available and therefore this creates a higher vacancy rate. Layoffs, closings, and consolidations all impact the square footage of the leased industrial space.

The current economic growth will leave an impact on industrial market for years to come, unless measures are taken to improve our vacancy for businesses.

Hopefully projects like Admiral Beverage’s 219,000 ft.² distribution center in the South I-25 market, which is expected to deliver in 2013 will impact the employment numbers a little bit, but that’s remains to be seen.

We are experiencing weak economic growth and this has slowed our recovery and consumers are less confident. We are affected by the national economy and will continue to be until some measures are put in place to help small businesses grow.

I don’t think we’ll see any prospective tenants move into the industrial market that will positively impact the vacancy and tenants have the opportunity in this market to take advantage of lower rents and upgrade their facilities by dealing with landlords that are willing to make the necessary enticements to attract tenants.

Bob - How can people contact you to talk about industrial real estate?

Walt - Thanks Bob call Walt Arnold at Sperry Van Ness 256-1255 is my direct line our website is Walt Arnold.com. If you have any questions about commercial state give us a call and let’s talk. Hey Bob, I appreciate the time have a great week and I will talk to next Monday.

Listen To Recorded Show Here

Albuquerque CRE Report 8.13.12

Posted on by

Bob – Walt, is there any momentum at all building in the commercial real estate market?

Walt - The activity level of the commercial market has increased. Lenders are coming back to the market, loans are being refinanced, purchased, and restructured, one looming issue is the mountain of loans coming due over the next few years and as these loans come up for their renewals, borrowers might have difficulty renewing these loans because of the significant drop in property values. Banks might not want to renew these loans or might be unable to renew these loans, due to regulatory constraints.

Bank ArtWe could see continued rounds of properties coming on the market through foreclosure. Some good news is most pundits predict interest rates to remain exceptionally low during the next few years. With these low interest rates, real estate will look more attractive than other investments.

Bob - What do these low interest rates do for property values? Is there a relationship between interest rates and the investment returns on commercial real estate?

Walt - There definitely is, it gets a little complex. These low rates are keeping cap rates at lower levels. Cap rates are a standard measure of return for many investors. If we see a rise in the interest rates the cap rates could also increase. Investors want to maintain their return and if interest rates increase, cap rates should also increase. Cap rates are a little complex with various variables and if you’d like to discuss them in further detail please give me a call.

Bob – Walt do you have anything else and how can people contact you today to talk about commercial real estate?

Walt - Thanks Bob, just to summarize, moving forward this commercial market is improving, although very slight, and there are some sizable downside risks that remain ahead of us. Some of those threats are the Euro crisis, ongoing foreclosure crisis, oil spike pricing issues, that could all take us in a different direction. Even with these looming threats, the commercial real estate market is improving, but very slowly.

As we move forward, hopefully we will start to see more things go right than things that go wrong. If you want to talk about commercial real estate give me a call, Walt Arnold with Sperry Van Ness, my direct line is 256-1255, our website is Walt Arnold.com. If you have any questions regarding commercial real estate, or would like some market information, or just want to bounce a thought, question or idea give me a call at 256-1255. Bob have a great week talk to soon.

Listen To Recorded Show Here

Albuquerque CRE Report 7.16.12

Posted on by

home appraisalBob - Walt, you wanted to talk about the current appraisal process and how they affect the commercial real estate market. What do you have for us today?

Walt - Good morning Bob, the life of appraisers is tough these days. There are few comparable sales, so finding sold comparables is difficult. Another detriment is appraisals are backward looking, so in a declining market, like what we are in now, or even in an appreciating market, the past is being analyzed more than the present. The rules and regulations from lenders are stricter than ever and one false step could cause problems for even the most solid transaction. There can be significant gaps in valuation of properties and these gaps can create significant hazards.

Bob - Gaps? Are you talking about gaps in property valuations?

Walt - Yes, lack of comparables has appraisers using properties that would not have been used four years ago. Sometimes acceptable comps might not be able to offset rapidly changing markets, one thing that would help in the process is if appraisers would heavily disclose market trends and communicate these near term value adjustments to the lender.

Bob - What can a buyer or seller do in a transaction to ensure that they get an acceptable appraisal?

Walt - It’s a tough situation, under the new regulations; it is difficult to have any correspondent with the appraiser during the appraisal process. But appraisers need to consider a mix of current market data and common sense to analyze comparable sales, current listings, vacancy, absorption and location attributes, appraisers also need to have conversations with commercial real estate brokers to assess these current values and trends in the market and if these steps are taken, hopefully the property value will come in at an acceptable level and the closing will be completed. It’s a tough situation for all participants in this process and if the rules would allow brokers to offer pertinent market information it would substantially help in the process.

Bob - Walt, how can people get a hold of you today to talk about commercial real estate?

Walt - Thanks Bob call Walt Arnold, Sperry Van Ness, at 256-1255, website is Walt Arnold.com. We can discuss these difficult market situations with buyers and sellers and help them strategize how the appraisal might affect the transaction. It has been very difficult to analyze where property values will end up with appraisals. It’s crucial for buyers and sellers to be aware of the impact that a low appraisal will have on the purchase contract. You have any additional questions about commercial real estate, give me a call and we can discuss your particular situation. Bob have a great week, talk to next week.

Listen to Recorded Show Here

CRE Report for 09.17.2011

Posted on by

Tenant Representation

Bob – Walt, I wanted to ask you a question, how should a Tenant deal with their lease as it approaches the expiration date.  In this market should they begin to have some discussions with their landlords prior to the lease expiring or just wait until the lease comes to an end and then try to negotiate?

Walt – Good morning Bob! Yes the lease is expiring soon, what are your options?  One thing to do is to do nothing.  When the lease expires it usually goes to a month to month agreement and that leaves the tenant with no protection, the landlord can give the tenant 30 days’ notice to move out.

Another thing that happens at the end of the lease is if a tenant stays past the expiration date, there might be “hold over” provision that could be 125% to 200% of the current lease and that is a big increase in monthly expenses especially in this environment.

Both of these scenarios allow the owners to dictate the terms, if they so choose.

Bob – Say I’m a tenant, and my lease is expiring, and I’m thinking I want to handle this lease negotiation thing by myself, what are some of those issues?

Walt - I know you’re a sharp guy, even though you did go to NMSU, there are some things you need to be aware of: you might risk overpaying your rent if you don’t  know everything that is happening in the market and also you need to be aware of market incentives are currently being offered.  There’s also the potential to make some harmful commitments within the lease document that might cause some financial issues and, it takes time to do  all this lease negotiation stuff and that is going to take you away from focusing on your business, which is the top priority.

Bob – Ok Walt, tell me what I need to do so I get the right space, at the right price and terms.

Walt – First I would say hire a Broker that understands the Tenant Representation process fully, for example, Sperry Van Ness.  We have handled thousands of real estate transactions and have the valuable experience to get the best results.  Tenant Rep services are usually at no charge to the tenant, the cost for leasing the space is paid by the Landlord, you can know that you are getting relevant, up to date information to make the best decision, we will explain the process so you know where you stand throughout the transaction, and you can then focus on your business, which is what you do best, and we can focus on all the details, which is what we do best.

Bob – All right, I feel better already, how can people get a hold of you today?

Walt -  Thanks Bob call Walt Arnold @ Sperry Van Ness my direct line is 256-1255, website waltarnold.com. I’m glad I could help you today, have a great week

Who Needs a Loan Sale Advisor? By: Patrick Blount

Posted on by

Who needs a loan sale advisor? Great question, as my attorney says of loan sales, “it’s not exactly rocket surgery.”  In addition there has never been more capital available for the purchase of distressed debt.  Problem banks with problem loans make the headlines in newspapers every day.  Bankers are inundated with calls from prospective loan buyers or “vultures” as my banker friends call them.

So “who” does need a loan advisor?

Not banks who are unconcerned about creating an arms length transaction;

Not sellers that personally know several hundred qualified buyers;

Not banks with workout departments experienced in file assimilation for due diligence; conversion of paper files to electronic files; development of relevant loan data spreadsheets; and creation of a marketable loan summary

Not sellers with special asset departments prepared to obtain confidentiality statements from scores of curious potential bidders; with sufficient staff to police the actions of those people receiving such confidential information; with the ability to evaluate and understand indicative bids, letters of intent, loan sale agreements, buy back provisions, eleventh hour re-trading and closing documents;

Not banks that have executive staff well versed in dealing with sophisticated loan buyers that have been involved in hundreds of millions, if not billions, of dollars in previous distressed loan purchases;

Not lenders that don’t have to answer to a board of directors regarding lender liability; did we get a “fair” price, much less the “best” price; do we have ongoing liability; who is this company or person that is now out collecting, or trying to collect, on our documents with our bank name plastered all over them;

And certainly NOT banks with a proven, written business plan in place of how they will price loans, market them efficiently, sell them without recourse and maximize their collection efforts.

Come to think of it “who needs a loan sale advisor?”

For More Information on Patrick Blount and Benewolf’s services visit Patrick’s blog here

For more info on Walt Arnold/Sperry Van Ness Visit my website www.waltarnold.com

Also be sure to check me out on Facebook and Twitter

Video CRE Report 3.21.10 – Spring Cleaning Maintenance Tips for Owners

Posted on by

Every Monday Morning Walt Arnold, Managing Director of Sperry Van Ness/Walt Arnold Commercial Brokerage in Albuquerque, NM sits down with 770 KKOB raido host Bob Clark to discuss commercial real estate. I this episode Walt give property owners a maintenance tips to help prevent any costly repairs. Also Walt talks about a few bank owned property listings in the Albuquerque area.

Video Commercial Real Estate Report 3.14.2011 – Helpful Tips for Earnest Money Deposit

Posted on by

Follow me on twitter @waltarnold and on Facebook www.facebook.com/walt.arnold

If you interested in property in the Albuquerque Area visit my website www.waltarnold.com

Thanks,

Walt Arnold

CRE Report 3.21.2011 – Spring Cleaning: Maintenance tips for owners.

Posted on by

Bob – Walt, as we head into springtime, are their some spring cleaning details commercial properties owners should be thinking about?

Walt – Good morning Bob, yes there are and it is a good time to think about some preventive maintenance items.  As the weather starts to warm up and with the time change it is time for maintenance and here are a few items to consider.

1.Check the timer for outside lighting so it is coming on and going off at the correct times.

2.Change batteries in any systems that require it, for example smoke detectors, backup batteries for lighting interior lighting and any other critical systems that require batteries.

3.Many events are scheduled throughout the year, but use the time change for fire inspection, alarm inspections, elevator inspections, and parking lot inspection for restriping or sealing.

4.It’s also time to service the refrigeration equipment for air conditioners and coolers for the upcoming warm up.  Make sure filters and evaporative coolers are serviced and for refrigerated air conditioning it is important to clean the coils and change the filters.  The systems will run much more efficiently with regular maintenance.

Bob – So the saying an ounce of prevention….

Walt – Yes it really is amazing, if an owner will spend a few dollars on periodic maintenance how much it will save in the long run. One area this is very evident is on roofs. During the spring and fall when we don’t get much rain it gives the roofer time to inspect the roof and do the preventative maintenance required. Maintaining roofs twice a year will save thousands of dollars over the life of the roof.  Don’t forget to inspect the roof or gutters for leaves or any debris that might clog up a roof drain or canale.

Bob – Anything else for us today?

Walt – I would like to mention that we manage almost 600,000 square feet of commercial space and if anyone is thinking about a need in commercial real estate property management services, give me a call and we can set up a meeting to discuss our services.

Bob, I also want to talk about some bank owned properties we are selling.  The first is 3701 San Mateo a 12,000 square foot office building for $1,200,000.  The second is 521 Rankin an industrial property just south of Comanche, west of I-25 7,800 sf for $544,000 and we also have a 3,000 square foot restaurant on Zuni just east of San Pedro.  Call me for details.

Bob – How can people reach you today?

Walt – Thanks Bob, call Walt Arnold with Sperry Van Ness, my direct line is 256-1255, website is waltarnold.com, you can also follow me on twitter @waltarnold. We know commercial real estate we do it all day, every day, and very well, give us a call.  Go Lobos.  Bob, have a great week!

CRE Report 3.14.11 – Protecting Your Earnest Money Deposit

Posted on by

Walt - Good Morning Bob.  Fortunately, I haven’t had a major earnest money dispute, at least not yet.  In a commercial transaction there can be a significant amount of money in a deposit. In a residential transaction the consumer protection laws will help to enforce the contract.  But in a commercial transaction a judge in court usually decides the ambiguous language.  Let’s talk about some things to help protect the earnest money deposit.

1. Make the contract terms clearly spell out what happens to the earnest money upon termination of the contract.

2. Get good counsel.  If there is any doubt of the language get an attorney to review the document and make sure it has language that will work for all parties and situations that might come up.

3. Termination notices should be broadly worded, for example if there is specific termination language in the contract the court might find the specific language to be invalid, but then rule that a purchaser might still be bound to the rest of the contract, so make terminations broadly worded.

4. Make sure the person holding the money is an unbiased third party.  A good idea is to put the money in a title company and not one party’s agent or attorney.

Bob – What else is going on in the commercial real estate world?

Walt - I think an interesting project to watch will be the redevelopment of the rail yard buildings and land just south of downtown.  This is a very unique property abutting the Barelas neighborhood.  Mayor Berry called it a Diamond in the Rough and it really is, if they do it right it could be an outstanding project.  It is a joint venture between Samitaur and Build NM.

Samitaur is known for re-development of urban blighted areas such as Conjunctive Points, a mixed use project in Culver City which is located next to Los Angeles.  So I wish the best of luck to Samitaur and Build NM in redeveloping the rail yard project.

Bob – How can people get a hold of you today to talk about commercial real estate?

Walt - Thanks Bob, call me Walt Arnold at 256-1255, website waltarnold.com also follow me on Twitter @waltarnold.  Check us out!  Sperry Van Ness is a national commercial real estate company with 160 offices across the country.  We help people make wise real estate decisions with specialists in commercial sale, leasing, property management, tenant representation, auctions and loan sales, if it involves commercial real estate call us we can help.  Thanks Bob have a great week.