Highway 80 Bridge Study

It is amazing how many people living west of Skidaway Road don't know about this study. Get ready for easier access to Tybee! 
A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Has Commercial Real Estate Bottomed?

Has CRE hit the bottom? Is it starting to get better? These are the questions Jeff Reeves tries to answer in his latest article.

The problem with this question is that it leaves off a key component- locality.

I think that broad national stats are reassuring, but essentially worthless. Yes, Reeves is writing for a national audience and I don't fault him that. But CRE, like all real estate, is an inherently local business.

Miami and Washington, D.C. have had a great year. Charleston I am told had a so-so year. The Savannah market was on fire- blazing- all 2012. And as soon as the first dredging shovel hits the bottom of the Savannah River, West Chatham is going to explode with development.

A frequent question similar to the article's title was "When will the other economic shoe drop?" Well, again, where are you expecting a shoe to fall? There was no one humongous shoe, but a million little ones. Each market was affected differently.

Reeves' article uses office as a measure of CRE health- and it is an excellent choice. When companies hire, they need a place to do work, so office vacancy rates are a direct correlation to the health of U.S. employment.

National office vacancy rates could not sink past the 17% mark all year. So things aren't getting worse, they might get better or they could stay the same for a while. Half way through 2012, Savannah's office vacancy rate got just below 20%. Not great having 1 out of 5 offices vacant. But downtown Savannah's vacancy is around 9%.

But in an incredibly risky $30 mil gamble, the Cay Building was built downtown and pre-leased 96% at $35/SF. That's 96% of 71,000SF. Wow.

Would I buy an office building for an investment? Not unless I had a lease agreement in place with a tenant who would lease said building. Otherwise if I wanted to buy office space low and have potential to sell high I'd invest in an office REIT.

Invest smart, not spec. Think local, not general.

Update on 1/16/13. Genesis Capital also weighs in on office markets as a sign of market health.

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

The ups and downs of interest rates and what they mean for buyers

The following is an article submitted by Mortgage Advisor Steve Nimmer.

It seems like every week we hear news about fluctuating mortgage interest rates. They're up, they're down, they remain unchanged...it's a lot to digest. Educating buyers about how mortgage interest rates work and how changes in rates can affect their loans in process can prove invaluable.

Many factors can influence mortgage rates. The role of the investor, bond prices/yields, other market-driven and policy-driven rates, and lender competition all play a role in determining mortgage interest rates.

Investments
Mortgages are one of the many investment products on the market today that investors "purchase" to realize a profit. Investors, such as Fannie Mae and Freddie Mac, buy mortgage-backed securities, which compete with other investment products in the marketplace and are influenced by the current Treasury bond yields. Mortgage-backed securities also provide fixed coupon payments to investors similar to bonds, but carry more risk and often better returns.

Other Rates
In addition, many other types of interest rates affect mortgage rates. Rates on bonds and securities go up in order to attract investors and the prime and LIBOR rates go down in order to attract borrowers. The Federal Reserve also sets specific rates to ensure stability and balance in the economy, and while the Fed does not set specific targets for mortgage rates, it does indirectly end up influencing them because these rates tend to move in the same direction as other financial interest rates.

Lender Competition
Lenders also compete against each other, balancing what their investors want to buy against what a homebuyer is willing to pay – and what the competition is offering.

Contact me today for more information about interest rates.

Steve Nimmer
Coldwell Banker Mortgage

(912) 604-3834
NMLS #: 186680

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

Q3 Coastal Empire Economic Monitor Reports Encouraging News

Q3 Coastal Empire Economic Monitor published by Dr. Toma reports economic growth in the Savannah MSA.

Employment, retail sales, tourism and housing construction numbers were all positive. For specific data please view the images below. After an elating read, Dr. Toma concludes that "a recession in likely in the absence of a resolution that avoids the impending tax increase and expenditure reduction."

 

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

Fiscal Cliff Hogwash

I don't claim to know it all, but when I read JLL reports projecting increased growth and the benefits of the fiscal cliff, I have to wonder if as an industry we only see the trees and not the forest. Which also happens to be on fire.

Core markets (D.C., Chicago, L.A., New York, Atlanta, San Fransisco, etc) that are seats of industry and goverment will almost always do well. And there are smaller markets, like Savannah, that have the real estate throttle wide open.

The problem is that articles glossing over the fiscal cliff, Patient Protection and Affordable Care act, Up-Eurs Zone volitility, etc. make a key error. They presume that decreased uncertainty will equal increased economic growth. Such is not the case.

In his acceptance speech Obama did reduce uncertainty and make some very specific tax proposals. In particular, he promised to:

• Raise the top marginal income tax rate to 39.6%.
• Raise the top short-term capital gains tax rate to 39.6%.
• Raise the top long-term capital gains tax rate from 15% to 20%.
• Raise the top tax on dividends from 15% to 39.6%. There will also be an additional 3.8% tax on dividends as of January 1.
• Replace the alternative minimum tax with the "Buffett Rule." That means the highest income-earners will pay a minimum 30% tax rate on wages, interest, dividends and capital gains.
• Raise the estate tax rate from 35% to 45%.

Every day bits of "Obamacare" are translated into Treasury code and released to the public. These new rules are not reported by media, but their effects are. Layoffs, decreased hours, diminished bonuses, hiring freezes are now daily reports.

In unrelated news, inflation has ticked up, jobless claims are up, poverty rates are spiking.

How can going over "the fiscal cliff" possibly help commercial real estate or the economy as a whole?

The authors gush "Continued low interest rates will prompt people to buy!" True, but lending standards are still tight because banks don't want to lend money if they can't make a decent profit. They'd rather keep the cash in excess reserves for the Fed to pay them interest on.

"Less uncertainty in healthcare means more real estate deals!" I've lost two medical office deals due to the new certainty of taxes and regulation in the last month.

Let's get real about the fiscal cliff: there won't be one. Obama owns this budget deficit now. He must act on it or his legacy will be mud. When has Congress ever had a problem compromising to let federal spending continue?

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

Refinance to plan for employment uncertainty

I had lunch yesterday with a mortgage broker, a digital advertiser and a flooring wholesaler. Apart from Thanksgiving and Disney World plans, conversation mostly concerned the regulations that are published as the Patient Protection and Affordable Care Act legislation is turned into Treasury code. Everyone there except for me (being self-employed) is concerned about the potential impact on their employment.

If your employment contract is likely to be renegotiated to comply with the Patient Protection and Affordable Care Act, it is an idea to refinance your property NOW.

You could reduce your monthly payment and capture low interest rates for the next 20 - 30 years. If you are concerned your hours may be cut to 28 per week, that $200 month savings on your mortgage will come in handy!


Lenders I recommend:

For residential:

Kirsten Ray, IKON Financial
9 one two-354-eight 555

400 Mall Blvd, Ste G
Savannah, GA, 31406

Lucy Bukowiec, BB&T Mortgage
912-9 two one-8752
http://www.bbt.com/lbukowiec

326 Mall Blvdsavannah, ga, 31406
United States

For commercial:

Deepika Paul, EVP, United Community Bank
912-2 three five-3147

8201 White Bluff Road
Savannah, GA, 31406

Anne-Marie Jones, First Citizens Bank
912-23 one-two 194
13 E. York Street
Savannah, GA, 31401

And the attorney to handle it:
TJ Hollis, Lee Black Rouse and Hollis
Nine one 2-355-0023
7395 Hodgson Memorial Drive.
Savannah, GA 31406 

 

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

New Savannah Real Estate Scam Artist

Absentee Home Owners Beware!

Five vacant homes in Savannah this week have been unlawfully rented out by a man saying his name is Lafayette. He claims he is the home owner and rents the property to unsuspecting tenants.

"Lafayette" even goes as far as having updates done to the home like new paint. Four of the homes belong to investors and one was listed by one of our REALTORS.

Please check your vacant homes personally or call your REALTOR. The Savannah-Chatham Police department has a case open. If this happens to you please contact them at 912.651.6675. Also you might want to check Craigs List to make sure your properties are not listed there for rent.


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