Is This The Right Time To Buy Commercial Real Estate?
December 6, 2007 – 4:37 pmWhether the economy is up or down, people are always questioning whether it’s the right time to to buy commercial real estate. I have spoken to people who have been shopping for just the right deal for 5 or 6 years. They were so worried that the market would go down that they didn’t buy anything in perhaps the hottest real estate market ever.
Can you imagine how well you could have done if you bought just a small fraction of the commercial real estate that you looked at since the year 2000? You might be too busy enjoying your yacht in the south of France right now to read this article if you had.
Just what is a bargain when you are dealing with commercial real estate? Is it 10%, 20% or 100% below the average price for a similar property? Probably any one of those numbers would constitute a true bargain. However, how probable is it that one can actually buy the property significantly below market price?
I submit that it is not very probable. In fact most people that have doubled, tripled, quadrupled or increased their net worth even more than that may well have paid market price for their property. The money is made on buying smart and projecting income prudently. It does not need to be made on “stealing” property.
Buying or selling prudently in a down or up market is key for investing into commercial real estate. Otherwise, if you are waiting to take action for just the optimum conditions you may grow old waiting to do it. You will also miss a great many opportunities along the way.
More about opportunities another day.
Let me know what you think about buying commercial real estate.
Is This the Right or Wrong Time to Sell Commercial Real Estate
December 5, 2007 – 4:41 pmAs is the case in Buying, there are always many people questioning whether this is the right time to sell their commercial real estate. It doesn’t matter that prices have hit historic peaks, they want to be sure that they “don’t leave money on the table”.
Timing is always important in selling but it is not the end all that people think it is. One’s own circumstances are the most important determining factor in deciding when to sell.
Some people simply must simplify their lives and cannot cope with the complexities of their properties. Some people are retiring and they don’t have any heirs that can adequately watch over the properties, or if they do they are too far away. Some people want to do a 1031 tax deferred exchange into another type of property for a myriad of reasons.
These people often need to sell now, and probably should not be trying to time the market so they can sell at the exact right time. For one thing, I don’t know anybody who can predict when the exact right time is. I wish that I did.
I have spoken with a great many people who have tremendous equity in their properties but still are afraid to sell. With the federal capital gains taxes low and the ability to exchange into another property or into a tenant in common property it may be accurate to categorize their fear as somewhat irrational.
Selling at a loss is always a tougher decision. However, selling with a good gain and return on the invested dollar is usually not a foolish thing to do. Waiting until the market peaks may be foolish if you have other reasons for selling. Chasing a down market while holding on to one’s property probably is foolish.
Let me know what you think about selling commercial real estate.
Tags: commercial, real estate, sell
It's Not Easy Being Green (But it's getting easier)!
November 13, 2007 – 9:41 pmThe hot ticket in developing today is “green” buildings. These are not buildings that choose a shade of green for ambiance, but those buildings that are environmentally sensitive.The United States is establishing more and more building standards that take into account the environment and natural resources. California is now coming forward as one of the leading states in this quest to respect our environment.
Let me know what you think about green buildings.
Retail buildings have been considered especially difficult to build green because of the multi-tenant aspect. Large tenants have very particular standards to meet for their corporate branding of each and every store. How could they conform to the same standards as all of their competitors? The answer is that it may not be easy but it’s getting there.
An article that sheds a great deal of light on retail green constructions is found the September, 2007 issue of Retail Traffic Magazine in an article entitled “California Greening“. It will tell you how far we have come and will be going.
Tags: competition, environmentally sensitive buildings, going green, retail
The Debt Market and You
November 12, 2007 – 5:35 pmNot everyone that deals in any way with commercial real estate understands exactly what is happening to the debt market in the United States today. In fact most people that I come across have very little idea of what the newspapers are talking about.
For most people, live goes on as usual. They cut a deal to buy a property, go to some lenders and get a loan. Even with lots of doom and gloom and gnashing of teeth in the air loans are, by and large, available for most people buying commercial real estate.
If you would like to get a basic education on the credit problems affecting Wall Street and scaring the bejabbers out of the rest of us today, look at a pretty good article to be found in the October 1st issue of the National Real Estate Investor that can be found at www.nreionline.com and read the article entitled “A CMBS and CDO Primer”.
After you read it and feel you now understand the national debt workings, call your local bank and get the loan you wanted before you read the article.
Let me know what you think about the debt market.