As part of the NAR’s Member Value Plus (MVP) Program, where REALTORS® earn rewards for participation in actions geared to improve our industry, today’s call is for a brief survey of your business activity and what you see in your marketplace. This survey is an extension of the monthly REALTORS® Confidence Index Survey and annual Member Profile, meaning results will of course be shared with members and in other venues.
Today’s wariness of banks and private lenders to finance commercial real estate transactions is widely reported as this industry’s leading challenge as it comes out of the recession. There are many reasons given why bank lending volume isn’t where it should be, but at the core, credit availability depends on lenders being good at assessing risk. It’s not as if the country’s largest banks have earned the most sterling reputations when it comes to evaluating, securitizing and financing real estate risk — the recession itself speaks here.
It’s not exactly fair to say CNBC’s foremost investment guru Jim Cramer touches on commercial real estate very often. As is usual with folks following equity markets on TV, publicly traded REITs come into his view only every now and then, he makes his pronouncements, slaps a button to make a sound effect and moves on to the next sector with nary a pause.
That said, nobody twists Mr. Cramer’s arm to give investment advice on TV. So when he consistently gets a sector wrong, it’s worth noticing. If it’s a hugely successful and growing commercial real estate market, all the more worth noticing. And Jim Cramer couldn’t get data centers more wrong than he has.
As part of its Land U program, REALTORS® Land Institute has announced its Agricultural Land Brokerage and Marketing Hybrid Course. This is one agricultural hybrid not related to a crop: the no-travel course focuses at two subjects at once: land brokerage and land marketing.
Trillion Dollar Market
The agricultural investment land market is estimated at a trillion dollars. This RLI course delivers the knowledge it takes to work this market, and more:
“To tap into this market, the land professional needs to know what market forces impact the value of agricultural land; the importance of soils and how they determine the highest and best use of the land; why land is an investment that attracts investors from around the world; how to analyze the income potential of agricultural land and estimate probable selling prices and costs; and how to market properties through online, print, electronic media, and RLI marketing sessions. This course counts as an elective toward earning the Accredited Land Consultant (ALC) Designation. “
Smart Growth is important stuff. The commercial property market and the land use decisions that go with it loom very large in the balance of a community’s economic health. Growth needs to be managed intelligently to maintain that balance, and that takes experts in commercial property engaging the community at large, shaping that balance among stakeholders.
Market upturns such as we’re experiencing bring a greater number of entrepreneurial projects – it’s the free enterprise system’s most reliable behavior and probably its greatest feature. Without entrepreneurs, markets and wealth would concentrate into an ever-smaller segment and stagnation would follow, as discovery of new ways of adding value would be postponed forever.
Commercial real estate is no exception. Practitioners, tech folks and others split off from brokerage or services firms to seek their own fortune, widening the marketplace and leveraging what and who they know — and why and when they know it. The ways in which this takes place changes over time, even if the motivations don’t. Let’s take a look at three such new arrivals to the commercial property marketplace.
As the global commercial property market evolves, it is marked by two kinds of growth. First, the sources of investment capital grow in number around the world. Then comes growth in the number of destinations for such capital. Buyers and investors in commercial real estate are increasingly international, so investments and returns have to make long trips to get where they’re going. When that’s true, the demand for clarity, predictability, reliable measurement and sustainability — known collectively in commercial real estate as transparency — becomes increasingly important.
Today’s NAR Commercial podcast by NAR Treasurer Bill Armstrong is loaded with new developments and member benefits for NAR Commercial REALTORS®. Bill sat down with NAR Commercial Senior Vice President of Marketing Bob Goldberg to run down the recent and exciting changes in the marketplace for commercial property listings, research, solutions and more.
There’s no doubt we see many signs of recovery in the national commercial real estate market. But as with any gigantic, inter-related collection of localities, sectors and instruments, it’s tough to know with any certainty what to expect long-term. As always, there’s plenty of room for disagreement about what lies beyond the horizon. Here are three conflicting looks at the CRE market long-term:
The Good: At this month’s NREI’s Strategic Real Estate Investment Conference in New York, panelist Arthur Mirante, principal and tri-state president of Avison Young painted a sunny picture of commercial investment, noting its steady attractiveness when compared to stocks. While he points out that knowing the market means mastering complexities, he believes that long-term, commercial real estate is the better value.
One of the greatest things about our system of government is the amount of lawmaking done in public. The texts of bills, and speeches on bills of all kinds is public information. When proposed laws come up, we have a chance to see what they are, where they came from, who they will benefit, who they will impact and why, and when the votes are coming.
But because of all the work involved, it’s still a only a slim chance. Being allowed access to this information is merely the first step. For example, NAR Commercial’s efforts on Capitol Hill include this exhaustive work of staying on top of the congressional record, watching carefully for issues that relate to commercial real estate when they arise, tracking their progress through the chambers and replicating all of this for all 50 states in addition to DC.