"Year of the Small Deal"

 






Here's an article of interest from April/May Realtor magazine.

The article acclaims the already known fact that 2012, especially the last quarter, brought a bumper crop of CRE deals. It doesn't mention that much of that was due to political fear and a desire to avoid 2013 taxes. It reports that capital markets surged, CMBS lending increased and that cash flow remains king.

2013 hasn't slowed down either, which is fantastic. It shows the motivation to invest is economic more than political. And best of all, Savannah made the cut!

 

This little infographic shows the top 10 U.S. cities with greatest YOY CRE volume. But don't equate the prosaic interview that jobs = growth = CRE deals, with the cities' numbers.

I can't imagine that Lexington, where I used to live, added so many jobs in 2010-2011 that the newly generated wealth prompted a buying CRE buying spree in 2012. And the Savannah MSA unemployment rate was around 9% in 2011 and decreased only .9% in 2012.

So yes, jobs keep a city alive, but don't equate to dramatic CRE sales volume. Remember that multi-family topped $75 billion in sales last year. I think the numbers reflect pent up demand, sales of REOs, and local and foreign investment.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

IRS "Compliance Gaps" Includes Real Estate Investors

I've said it before, that the government views property owners like John Dillinger viewed banks.

Due to new Medicare laws, real estate investors would do well to qualify as real estate professionals. However, there is an exception for those who would qualify.

Read How Real Estate Investors Can Protect Themselves From the IRS to learn more about it.

And if I were local to Savannah I'd call Stephen Leonard over at Hancock Askew.


A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Low interest rates + multiple offers = bad time to buy

Everyone is howling about the low interest rates, even myself on occasion, as THE reason to buy property. "Buy now while rates are low!" It is the ticking clock method of persuasion.

However, if your market is particularly hot, and properties that fit your criteria are receiving multiple offers, then it might not be the best time to buy.

"What?" you may ask. "How can things not be on sale already since prices are so far off from 2007?"

Keep in mind that 2007 prices were hyper-inflated, nobody is predicting yearly future appreciation rates, and low interest rates don't justify a bidding war.

In many markets and in almost every sector, investors are trying to buy as much real estate (especially residential) as possible to either rent or flip. If you find yourself in a multiple offer situation on a property where other buyers are throwing cash around like a ticker tape parade, don't buy the property.

There are more foreclosures coming; the shadow inventory is huge. Don't let your emotions hijack your wallet in a bidding war for anything at any time. If you can't sell the property you intend to buy for $X within a week of purchase and get what you paid, you're probably going to pay too much.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga