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By AZ Advisory Team, January 26, 2010 6:08 pm

Purchasing ahead of the market’s bottom, as opposed to waiting for concrete signs of recovery, provides investors with the advantage of relatively limited competition. Resumption of job growth will draw more investors back into the market, and, while prices may soften further before stabilizing, they ultimately will pass through current levels at the start of the next appreciation cycle.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 11, 2010 4:02 pm

The troubled US commercial real estate sector has been attracting a new wave of capital from sources including US private equity firms, foreign banks and foreign investors. Although the current situation is good for opportunistic investors,  their bottom-feeding strategies can be disrupted by rising interest rates.

Nonetheless, the growing interest from investors and the deals coming out of it will bring liquidity to the market which would help the commercial real estate sector, the affected banks and the US economic recovery.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 5, 2010 4:27 pm

We think that troubles in commercial real estate will not be that bad to bring down the economy.

Other analysts said last year that pending commercial-property bankruptcies could push the country back into recession – wreaking damage on the financial system equivalent to the subprime residential mortgage losses. We disagree to this because the  value of outstanding commercial mortgages is only a fraction of the value of outstanding residential mortgages.

Nonetheless, more losses will come over the next couple of months or years for commercial property owners and their lenders. The amount of loss and regained investments would depend on how owners, investors and lenders hold or sell their commercial properties and then make strategic acquisitions that is more aligned to their objectives, core and operational competencies as well as a good build-up timing for the coming upturn.

Commercial real estate’s decline in value is already slowing this year and we should expect it to bottom and turn around by the half of 2010.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 4, 2010 1:38 pm

Based on our survey, it’s clear that investors want to pursue new acquisitions.  Seventy-two percent (72%) of respondents say that they are currently reserving and amassing capital for buying opportunities. The majority of investors expect to execute more transactions. More than one in four respondents (28%) say they have already started adding to their portfolios, while an additional 41% say they plan to begin acquiring property over the next six months. Although 2009 was an unusually slow year for investment sales, investors appear to be more optimistic that investment sales will pick up in 2010. Property sales year-to-date through September totaled $12.4 billion, which is a fraction of the $110.6 billion notched during the same period in 2007, according to Real Capital Analytics, a New York-based research firm that tracks office, industrial, retail, apartment and hotel transactions above $5 million.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 2, 2010 4:15 pm

The 1031 Exchange Rule

A property transaction can only qualify for a deferred tax exchange if it follows the 1031 exchange rule laid down in the US tax code and the treasury regulations.

The foundation of 1031 exchange rule by the IRS is that the properties involved in the transaction must be “Like Kind” and both properties must be held for a productive purpose in business or trade, as an investment.

The 1031 exchange rule also lays down a guideline for the proceeds of the sale. The proceeds from the sale must go through the hands of a “qualified intermediary” (QI) and not through your hands or the hands of one of your agents or else all the proceeds will become taxable. The entire cash or monetary proceeds from the original sale have to be reinvested towards acquiring the new real estate property. Any cash proceeds retained from the sale are taxable.

The second fundamental rule is that the 1031 exchange requires that the replacement property must be subject to an equal or greater level of debt than the property sold or as a result the buyer will be forced to pay the tax on the amount of decrease. If not he/she will have to put in additional cash to offset the low debt amount on the newly acquired property.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, December 22, 2009 11:00 pm

Similar to the report released by the CCIM Institute and the Real Estate Research Corporation, Moody’s Investors Service said today that prices of commercial real estate continue to decline, but the speed of the decline may be slowing. The Moody’s/REAL Commercial Property Price Index declined 1.5% in October to 107.98 from 109.61 in September. Based on the index, prices for commercial real estate were 36.4% lower than in October 2008 and 43.7% below the peak measured in October 2007. The index is based on repeat sales of the same properties across the U.S. This is a very clear indication that we are very near the bottom.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By Alex Zylberglait, December 21, 2009 6:28 pm

Financing, pricing gap and wait for distressed sales are blocking the path for commercial real estate investors.

According to an exclusive survey produced jointly by National Real Estate Investor and my company Marcus & Millichap, buyers are preparing to forge ahead with acquisitions in 2010. Two-thirds of investors (65%) who responded to the 6th Annual Investment Survey plan to boost their investment in commercial real estate over the next 12 months. That figure is up from 56% in the third quarter and 51% a year ago. The fact that buyers are once again returning to the table is a huge vote of confidence for a commercial real estate industry that has been slammed in the past year by falling property values, occupancies and rents. Respondents to the annual survey who do plan to expand existing portfolios anticipate an average increase of 26%, up from 24% in the third quarter and 22% a year earlier.

Contact me to receive the full report.

Are you one of the 65% of investors who are looking to expand portfolios and go ahead with acquisitions on bargain commercial real estate properties in the next 12 months? Contact me in advance for me to find a good strategic acquisition for you.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By Alex Zylberglait, December 18, 2009 10:15 pm

Price declines in the commercial property sector around the nation are dwindling slightly according to a report by the CCIM Institute and the Real Estate Research Corporation. And that a potentially meaningful recovery is projected to in about six months, the report said.

The quarterly report noted volume increases in the office, retail, apartment, and hotel sectors on a quarter-to-quarter basis, but it is still declining overall on a 12-month trailing basis.

In its 2010 forecast, the report said that credit is projected to remain stiff, and as more loans reach its due, bank foreclosures are expected to swell.  Commercial real estate sales volume and transactions are expected to increase as more entrepreneurial and opportunistic funds will flow into the market.

Contact me if you want to explore and seize opportunities in commercial real estate across the nation as I find the best investment strategy and the best fit between investors and property assets.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, December 17, 2009 2:30 pm

In a report by Reuters, Bank of Canada Governor Mark Carney said that about the U.S. real estate that: “It is going to be a difficult situation for a period of time but it is not going to be a shock to the system. And there’s a big difference between the two.”

Meanwhile, Wells Fargo Securities said in its 2010 outlook report that  the economy will rebound, but will take a couple of years to return to levels seen a few years ago.

“Housing and commercial real estate are central to the recovery. It has been complicated by the stimulus programs. The future will be determined by the fundamentals, it is not likely to improve until employment and income improve, ” said Mark Vitner, senior economist at Wells Fargo. “We expect a 20 percent rebound in 2010 and 2011,” he said.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, December 16, 2009 2:37 pm

Moody’s Investor Services, learning from lessons received 20 years ago, predicts in a report that U.S. life insurers will suffer a less due to commercial-mortgage losses compared to banks. The commercial real estate market last went through a crisis 20 years ago which resulted in major losses for the life insurers.

“Life insurers’ portfolios today demonstrate that they have learned from past missteps dealing with commercial real estate,” said Senior Vice President Jeffrey Berg. Right now, the sector has only moderate exposure to commercial loans and these loans were well-diversified across geographies and property types as well as these loans were conservatively underwritten and maturities were well-distributed.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.