Alton Webb & Associates Commercial Real Estate - Monthly Update - January 2010
Where is value? This is an essential question for real estate and the economy in 2010. If we know where true value is and can assign a numerical figure therein, we will have the foundation for starting over again.
Once the market floor is established, confidence will be revived & folks will start buying again. As long as value floats aimlessly, so will the market. Unfortunately, we still have uncertainty and a moving target for deal-making in the commercial arena. Yet, good news awaits as we've seen the beginnings of positive movement in residential property sales - home credits seem to have assisted kicking off this process. We believe commercial real estate trends will follow residential trends, which could mean a better commercial market by 3rd to 4th quarter 2010.
Cost for new construction, renovation, and finish work remains steady while ccomparable sales lag. Currently, a large gap resides between the two. As an example, I may pay $750,000 to build an office building today, but the comparable sales of existing property in the last 12-15 months show a value of $625,000. This will work itself out in due time.
Investors and small businesses are furthered & created during times of struggle. Don't be like Mark Twain, who said, "I was seldom able to see an opportunity until it had ceased to be one." For example, we have an investor who knows how to own & operate multi-family property. He is buying 8-12 unit buildings for $100,000 less then this time last year, yet still collects the same amount of rental income as he did then. This requires him to spend or borrow less money & actually make more.
Like our investor, we must take it upon ourselves to re-establish the market. Encourage others! Values will begin to settle and solid footing will be created for 2010 and beyond.
The above is merely opinion, subject to change or error, & not warranted by Alton Webb & Associates.
I like to provided that value drifts endlessly, so will the industry. Fortunately, I have concern and a going focus on for deal making in the professional area.
Posted by: ציוד לבריכות שחיה | January 17, 2012 at 12:03