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Archive for December, 2012

Video: Commercial Real Estate’s Economic Contributions to the Economy

December 28, 2012 Leave a comment

Commercial real estate development is a valuable economic engine in the United States – it creates jobs, generates income and significantly contributes to the U.S. economy. Watch this video produced by the NAIOP Research Foundation to learn how commercial real estate development positively impacts the economy throughout economic highs and lows.

About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs throughout the Boise Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime locations in the Boise metropolitan area. More information is available at www.sundanceco.com or 208.322.7300.

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Commercial Real Estate’s Top 10 List for 2013

December 21, 2012 Leave a comment

The U.S. commercial real estate (CRE) recovery, although slow, has been visible in improved fundamentals, capital availability, asset pricing and transactions. REITs continue to outperform others, primarily due to higher liquidity and relatively easy access to capital markets. However, the CRE recovery appears to be unsteady, with increased “caution” given the nation’s stalled economic recovery, which is due, in part, to sovereign debt problems and economic stagnation in Europe as well as slowing growth in emerging markets such as China and India.

This report, the 14th in Deloitte’s series on critical issues affecting real estate, examines CRE market trends and developments, with a focus on potential solutions to help CRE players favorably position themselves in the medium-to-long term future.

The report examines the top 10 issues facing U.S. CRE in 2013, and how innovation can drive industry growth during this period of slowed CRE recovery.

The top 10 issues for commercial real estate in 2013 are:
• Macroeconomic fundamentals
• CRE fundamentals
• CRE lending
• Real estate investment trusts (REITs) and private equity real estate (PERE)
• CRE deal flow
• Single-family homes
• Globalization of CRE
• Sustainability
• Technology
• Analytics

The complete 32 page report can be downloaded by clicking here.

About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs throughout the Boise Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime locations in the Boise metropolitan area. More information is available at www.sundanceco.com or 208.322.7300.

Real Estate Forecast 2013-2014: Commercial Properties

December 12, 2012 Leave a comment

A recent article from Forbes magazine looks into the future and offers its opinions on how 2013 will play out. Continue reading the rest of the story here or below.

Commercial real estate will improve marginally in 2013. New construction activity will inch upward, operating income will be a little better, and property values will level off. Later, in 2014 or 2015, operating income and prices will both rise, triggering increased construction.

The recession clobbered occupancy of office, industrial and retail space, which pulled rents down. Landlords suffered from lower revenues. In the slow recovery, new construction dwindled to nearly nothing. Current need for additional square footage was nil, and those developers who wanted to build for future demand found that lenders were hesitant to take much risk.

The current situation is that leases are dribbling in, generating small increases in occupied square footage. The current pace of construction is not only lower than in the boom, but well below historic averages. We know that given even middling economic growth, we’ll eventually need to build at a much stronger pace. However, the high vacancy rates that are a legacy of the recession will limit new construction through 2013 at least.

Property values have done quite well despite lackluster tenant growth because of low interest rates. If one thinks of a valuation as future earnings discounted by some interest rate, then lower interest rates lead to higher property values. The best mortgage rates have been obtained on excellent properties: good cash flow and good tenants. For such deals, interest is so cheap that it’s almost free. Properties of lower quality have a much narrower range of financing choices, resulting in higher interest rates. High quality commercial properties have appreciated by six percent in the past 12 months, with lower rates of gain for other buildings.

Real estate is always local, and a few markets are seeing a bit of life. However, our perusal of activity in many markets points to mostly build-to-suits in construction activity.

Although there will be very little construction activity in 2013, landlords will see modestly better occupancy. They will curtail rent concessions. Some markets will even experience rent increases. These will help operating earnings.

Interest rates will not fall further in 2013, and long-term mortgage rates may rise late in the year. Thus the operating income gains will not translate into further increases in property values.

New construction in 2013 will be just a little better than this year. The real boost in activity is likely in 2014 or 2015, depending on the market area. Nationally, more of the gain will occur in 2015 than earlier.

Business implications
Tenants with long-term plans for occupancy should lock in rental rates for as long a term a possible. Landlords, in contrast, should be eager to offer two or three year leases, to take advantage of better rental rates in the future. Developers should do the cheap part of planning new projects, but delay commitments to spend large amounts until we have surer signs of future demand.

About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs throughout the Boise Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime locations in the Boise metropolitan area. More information is available at www.sundanceco.com or 208.322.7300.

What Do We Need Less of and More of in Commercial Real Estate?

December 5, 2012 Leave a comment

Duke Long at DukeLong.com thinks that commercial real estate is getting to the point that there is too much stuff that we don’t need and not enough of what we do need? Here are some of his suggestions:

We Need Less.                                     We Need More.
Emails Conversations                            Information Wisdom
Experts Learners                                     Selling Authenticity
Data Walls                                               Data Access
Data Restriction                                     The Cloud
Historical Data                                       Real Time Data
Data Confusion                                     Data Standard
Social Media                                           Digital Media
Quarterly Reports                                   Daily Market Updates
General Markets                                     Localism
iPad 1                                                      iPad 2
Outlook Salesforce                               CRM
CMBS                                                       CMBS (Yea I Know!)
Drip Mail Touch                                   Belly to Belly|
Blast Mail                                               Shoe Leather
The Office                                               The Street
AARP                                                     Generation Z
Cubicles                                                 Virtual Desktops
BS Hype                                                 Reality
Malls                                                     Netflix (Think about it!)
Kindle                                                   Any Device
PDF Flyers                                           Mobile Apps
1- Dimension                                     3- Dimension
Facebook                                             LinkedIN
Broker Bashing                                   Respect
Corp PR/SM                                       True Voice
Websites                                               WordPress
Online Fear                                         Online Interaction
Marketing                                           Content
Blog Lists                                             Deal Making

Just a few thoughts. What do you think? What does commercial real estate need more of and could use a little less of?

About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs throughout the Boise Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime locations in the Boise metropolitan area. More information is available at www.sundanceco.com or 208.322.7300.