Erik Anderson
Commercial Partners Realty, Inc.
There is increasing sales activity in both the office and industrial markets in the Tampa Bay area, and the savvy players are the ones doing the deals. With vacancy rates hovering around 20%, realistic expectations and creativity are a necessity.
Realism and creativity are cornerstones to making deals work today. Seller financing has become an important tool to overcome the difficult requirements being set by traditional lenders like banks and credit unions.
Tenants with realistic expectations are in a great position as well. This is a perfect time for a tenant to become an owner, with office and industrial prices down to levels below what they were 5-6 years ago, and below the cost to replace the building. With all the creativity that’s being used today, analyzing what makes a good deal can be a little more difficult than it has been in the past.
When a seller is willing to provide financing, they can accomplish a couple of different, but important goals. They may turn a potential tenant into a buyer by giving them the means to purchase that they might not otherwise have. At the same time, they can help increase the sale price by providing financing that’s more attractive than traditional lenders. As we’ve seen in the past, a buyer may be willing to pay a little more if their cost of funds is lower. The seller also turns their sale profit into an annuity and further increases their yield with the interest payments they receive.
By using seller financing, the potential buyer may be able to bring their mortgage payment in line with what they would’ve had to pay in rent. They can keep their monthly cost the same, but now they’ll be building equity. They’ll still need to come up with a down payment, however, the down payment for owner financing may be significantly lower than with a traditional lender.
In the end, this can be a win-win situation. The former tenant is now building equity, and has an asset with growing equity, rather than the liability of a lease. The seller has moved his property, received a down payment, and can take the building back should the buyer fail to keep up with the mortgage payments.
Seller financing is something I encourage both sellers and tenants to consider. It can help a seller get their property sold, and it can turn a potential tenant into a buyer, something they will be very happy with years down the road as prices and rent rates begin to rebound.
Your Team for Industrial, Office, Retail and Investment Properties
Monday, September 20, 2010
Friday, August 6, 2010
Commercial Partners Realty Awarded Exclusive Leasing of 50,000 SF Gandy Office Center
St. Petersburg, FL - (August 2010) Scott Clendening and Erik Anderson of Commercial Partners Realty, Inc. have been awarded the exclusive leasing of The Gandy Center, a 50,000 square foot office property located at 3491 Gandy Blvd. in Pinellas Park.
Gandy Center is home to a variety of professional and medical tenants and offers a wide range of office configurations, with spaces available from 1,700 to 25,000 square feet. The center is also available as an investment sale.
Commercial Partners Realty, Inc. is a full service Commercial Real Estate brokerage specializing in Office, Industrial, Retail and Investment leasing and sales and representing landlords, tenants, buyers and sellers of commercial real estate in Tampa Bay and West Central Florida.
Commercial Partners Realty is a member of the George F. Young of Florida, Inc. corporate family. Established in 1919, George F. Young, Inc. is a full-service professional consulting firm offering engineering, architecture, planning, landscape architecture, environmental, and surveying services throughout Florida.
For more information about this and other listings, visit www.commercialpartnersrealty.com.
Gandy Center is home to a variety of professional and medical tenants and offers a wide range of office configurations, with spaces available from 1,700 to 25,000 square feet. The center is also available as an investment sale.
Commercial Partners Realty, Inc. is a full service Commercial Real Estate brokerage specializing in Office, Industrial, Retail and Investment leasing and sales and representing landlords, tenants, buyers and sellers of commercial real estate in Tampa Bay and West Central Florida.
Commercial Partners Realty is a member of the George F. Young of Florida, Inc. corporate family. Established in 1919, George F. Young, Inc. is a full-service professional consulting firm offering engineering, architecture, planning, landscape architecture, environmental, and surveying services throughout Florida.
For more information about this and other listings, visit www.commercialpartnersrealty.com.
Friday, May 21, 2010
Have We Hit Bottom Yet?
By Erik Anderson
Commercial Partners Realty, Inc.
For months now, we've all been hearing the gloom and doom news that there's another round of foreclosures in the commercial real estate industry. We have certainly seen some reduction in sale prices, but it's nowhere near what you might imagine if you only paid attention to the mainstream news. The truth is, businesses are still operating. Buildings are still being purchased and leased.
Sale prices have been "corrected" from the overinflated value of 4 and 5 years ago, but the sky is not about to collapse. Banks are not foreclosing on properties at a wholesale rate. Although there are troubled assets, banks are learning to deal with them, rather than foreclosing and dumping them on the market at the rate the media would have you believe.
The truth is, nobody wants to foreclose on a property. Not only does the investor lose their investment, they lose the ability to borrow money for similar investments in the near future. The bank also loses in a foreclosure, since it must realize a loss on the defaulting loan. And the market suffers as another building is added to an already bloated inventory as a "short sale." With foreclosure, everyone loses, so everyone is working very hard to avoid it whenever possible.
Because of this, banks have learned to work with their clients and keep the loan working if at all possible. They can switch to interest only payments. They can extend the term. They can fix the rate of an adjustable rate loan. All are ways to reduce the monthly cost of the loan. By doing so, they help the investor maintain possession of the asset.
When the owner maintains possession of the asset, they can continue to pay the loan, saving the bank from realizing (and reporting) a significant loss. This gives the owner an incentive to maintain the project, rather than let it fall into disrepair, which would cause it to lose further value. And often an owner is better able and more willing to maintain the property than a lender already overburdened with assets would be.
I've been involved in a number of projects where the banks have stepped up and modified their loans so that an owner can maintain possession. These are often projects that have seen tenants move out, thereby reducing the cash flow and making it impossible for the owner to continue to service the loan. Rather than stand on the terms of the original loan, they have chosen to sit down with the owner and find ways to modify the loan to allow the owner to maintain possession.
Banks will continue this trend of working with owners, rather than foreclosing on them. The result will be a reduction of foreclosures coming onto the market than previously predicted. This coupled with the recent gains made in the overall economy will lead to a "bottoming out" of commercial real estate prices and hopefully a recovery in the very near future.
Having said all that, what does this mean for you? It means that we are at or close to the bottom of the market. Sale prices and lease rates are lower than they've been in years, and with the economy in recovery, now is the time to take advantage of the market. If your business is stable right now, chances are that it's only going to get better. There are some great opportunities in the market today, and prices are not likely to continue to fall much more, so take advantage. Anyone who is buying or leasing commercial real estate right now, is going to be very happy as they watch the market and the economy rebound over the next few years.
Commercial Partners Realty, Inc.
For months now, we've all been hearing the gloom and doom news that there's another round of foreclosures in the commercial real estate industry. We have certainly seen some reduction in sale prices, but it's nowhere near what you might imagine if you only paid attention to the mainstream news. The truth is, businesses are still operating. Buildings are still being purchased and leased.
Sale prices have been "corrected" from the overinflated value of 4 and 5 years ago, but the sky is not about to collapse. Banks are not foreclosing on properties at a wholesale rate. Although there are troubled assets, banks are learning to deal with them, rather than foreclosing and dumping them on the market at the rate the media would have you believe.
The truth is, nobody wants to foreclose on a property. Not only does the investor lose their investment, they lose the ability to borrow money for similar investments in the near future. The bank also loses in a foreclosure, since it must realize a loss on the defaulting loan. And the market suffers as another building is added to an already bloated inventory as a "short sale." With foreclosure, everyone loses, so everyone is working very hard to avoid it whenever possible.
Because of this, banks have learned to work with their clients and keep the loan working if at all possible. They can switch to interest only payments. They can extend the term. They can fix the rate of an adjustable rate loan. All are ways to reduce the monthly cost of the loan. By doing so, they help the investor maintain possession of the asset.
When the owner maintains possession of the asset, they can continue to pay the loan, saving the bank from realizing (and reporting) a significant loss. This gives the owner an incentive to maintain the project, rather than let it fall into disrepair, which would cause it to lose further value. And often an owner is better able and more willing to maintain the property than a lender already overburdened with assets would be.
I've been involved in a number of projects where the banks have stepped up and modified their loans so that an owner can maintain possession. These are often projects that have seen tenants move out, thereby reducing the cash flow and making it impossible for the owner to continue to service the loan. Rather than stand on the terms of the original loan, they have chosen to sit down with the owner and find ways to modify the loan to allow the owner to maintain possession.
Banks will continue this trend of working with owners, rather than foreclosing on them. The result will be a reduction of foreclosures coming onto the market than previously predicted. This coupled with the recent gains made in the overall economy will lead to a "bottoming out" of commercial real estate prices and hopefully a recovery in the very near future.
Having said all that, what does this mean for you? It means that we are at or close to the bottom of the market. Sale prices and lease rates are lower than they've been in years, and with the economy in recovery, now is the time to take advantage of the market. If your business is stable right now, chances are that it's only going to get better. There are some great opportunities in the market today, and prices are not likely to continue to fall much more, so take advantage. Anyone who is buying or leasing commercial real estate right now, is going to be very happy as they watch the market and the economy rebound over the next few years.
Monday, May 10, 2010
Commercial Partners Realty Announces Recent Transactions
Commercial Partners Realty, Inc. is pleased to announce the following recent transactions:
The lease of 6,000 SF of Industrial space at 8440 43rd Street N, Pinellas Park, FL to Gator Dredging. Erik Anderson represented the Landlord, Lado Properties in the transaction.
The sale of a 3,400 SF warehouse at 2434 22nd Street N., St. Petersburg, FL. Scott Clendening represented the buyer, Cheese Popper, LLC, in the transaction.
Commercial Partners Realty, Inc. is a full service commercial brokerage firm, specializing in the sale and leasing of office, industrial, retail and investment properties.
The lease of 6,000 SF of Industrial space at 8440 43rd Street N, Pinellas Park, FL to Gator Dredging. Erik Anderson represented the Landlord, Lado Properties in the transaction.
The sale of a 3,400 SF warehouse at 2434 22nd Street N., St. Petersburg, FL. Scott Clendening represented the buyer, Cheese Popper, LLC, in the transaction.
Commercial Partners Realty, Inc. is a full service commercial brokerage firm, specializing in the sale and leasing of office, industrial, retail and investment properties.
Tuesday, April 20, 2010
Commercial Real Estate Outlook for Tampa Bay
Are things finally looking up for commercial real estate and the economy in general? Retail sales in March surpassed expectations, fueling hope that economic recovery was underway. March also saw a significant amount of job creation. As employment continues to rise, spending by individuals returning to work, as well as currently employed consumers should also increase, although growth in retail sales is expected to be limited due to consumer debt and unemployment rates.
Despite increased consumer spending, unemployment remains high and a depressed housing market, with high foreclosure rates and nearly one out of every four mortgages being "upside down" in debt-to-value ratio, threaten to slow economic recovery. Even with the better than expected numbers from March, retail sales are still below what they were two years ago.
Retailers will need to see a few more quarters of sustained growth in demand before we can expect any significant expansion. First quarter numbers show retail vacancy in the Tampa/St. Petersburg market increased to 7.7%, comparable to the national rate of 7.5%. The area had a negative absorption of nearly 553,000 SF of retail space during the first quarter of 2010, with approximately 23,000 SF of new space entering the market. Currently, over 138,000 SF of retail space is under construction in the Tampa/St. Petersburg market - only 30.8% of which is pre-leased.1
As long as retail demand continues to grow, the manufacturing sector will need to increase production. Output of consumer goods rose at an annual rate of 4.9% in the first quarter of 2010 2 and seven out of ten indicators helped spur an overall increase in the leading US economic index.3 Contributing to the rise was the interest-rate spread, increasing factory hours, slower supplier deliveries, rising stock prices and an increase in building permits.
Manufacturing has been expanding steadily in 2010, with employers adding over 45,000 positions in the first quarter. Increased production is expected to stabilize demand for industrial space and vacancy rates are expected to edge up to just over 12% by the end of 2010.4
Although tempered by high unemployment and weak construction spending, this growth in retail and manufacturing gives consumers cause for hope. According to Michael Feroli, chief U.S. economist at JP Morgan Chase & Co., “the momentum is carrying on into the second quarter as well. Capital spending, which was already strong at the end of the 2009, is continuing into this year, and that’ll support the recovery.”5
1 CoStar Retail Report 1st Quarter 2010 Tampa/St Petersburg Retail Market. The Costar Group. 2010
2 Industrial Production and Capacity Utilization. The Federal Reserve Statistical Release. Federal Reserve. April 15, 2010
3 The Conference Board’s index is a gauge of current economic activity, which tracks payrolls, incomes, sales and production.
4 CoStar Industrial Report 1st Quarter 2010 Tampa/St Petersburg Industrial Market. The Costar Group. 2010
5 Production Jumps as U.S. Factories Lead Recovery. Business Week. April 15, 2010
Despite increased consumer spending, unemployment remains high and a depressed housing market, with high foreclosure rates and nearly one out of every four mortgages being "upside down" in debt-to-value ratio, threaten to slow economic recovery. Even with the better than expected numbers from March, retail sales are still below what they were two years ago.
Retailers will need to see a few more quarters of sustained growth in demand before we can expect any significant expansion. First quarter numbers show retail vacancy in the Tampa/St. Petersburg market increased to 7.7%, comparable to the national rate of 7.5%. The area had a negative absorption of nearly 553,000 SF of retail space during the first quarter of 2010, with approximately 23,000 SF of new space entering the market. Currently, over 138,000 SF of retail space is under construction in the Tampa/St. Petersburg market - only 30.8% of which is pre-leased.1
As long as retail demand continues to grow, the manufacturing sector will need to increase production. Output of consumer goods rose at an annual rate of 4.9% in the first quarter of 2010 2 and seven out of ten indicators helped spur an overall increase in the leading US economic index.3 Contributing to the rise was the interest-rate spread, increasing factory hours, slower supplier deliveries, rising stock prices and an increase in building permits.
Manufacturing has been expanding steadily in 2010, with employers adding over 45,000 positions in the first quarter. Increased production is expected to stabilize demand for industrial space and vacancy rates are expected to edge up to just over 12% by the end of 2010.4
Although tempered by high unemployment and weak construction spending, this growth in retail and manufacturing gives consumers cause for hope. According to Michael Feroli, chief U.S. economist at JP Morgan Chase & Co., “the momentum is carrying on into the second quarter as well. Capital spending, which was already strong at the end of the 2009, is continuing into this year, and that’ll support the recovery.”5
1 CoStar Retail Report 1st Quarter 2010 Tampa/St Petersburg Retail Market. The Costar Group. 2010
2 Industrial Production and Capacity Utilization. The Federal Reserve Statistical Release. Federal Reserve. April 15, 2010
3 The Conference Board’s index is a gauge of current economic activity, which tracks payrolls, incomes, sales and production.
4 CoStar Industrial Report 1st Quarter 2010 Tampa/St Petersburg Industrial Market. The Costar Group. 2010
5 Production Jumps as U.S. Factories Lead Recovery. Business Week. April 15, 2010
Monday, March 15, 2010
Commercial Partners Realty, Inc.
If you are interested in commercial real estate in the Tampa Bay area, you are in the right place. It is our hope that this blog will be of interest to tenants, owners and investors. You'll find links here to information about the market as well as properties that might be of interest. Feel free to ask questions, or visit our website for more information.
Who are we?
We are a commercial real estate brokerage located in St. Petersburg, FL. We are experienced in leasing, sales and investments. As part of the George F. Young family, we can also provide help in developing projects, such as engineering, surveying and environmental planning and analysis. If you are looking to buy, sell, lease or develop property in West Central Florida, we can help.
Thank you,
Commercial Partners Realty
299 Dr. Martin Luther King Jr. St. N.
Saint Petersburg, FL 33701
727-822-4715 Phone
727-812-4528 Fax
Who are we?
We are a commercial real estate brokerage located in St. Petersburg, FL. We are experienced in leasing, sales and investments. As part of the George F. Young family, we can also provide help in developing projects, such as engineering, surveying and environmental planning and analysis. If you are looking to buy, sell, lease or develop property in West Central Florida, we can help.
Thank you,
Commercial Partners Realty
299 Dr. Martin Luther King Jr. St. N.
Saint Petersburg, FL 33701
727-822-4715 Phone
727-812-4528 Fax
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