Browse Category: NAR

2016 Q2 CRE Market Survey: The Trends Are Your Friends

National Association of Realtors, Washington, ...

Who says you can’t look back? National Association of REALTORS® has released its second quarter 2016 Commercial Real Estate Market Survey, and the takeaways appear pretty good for the national commercial real estate market picture for 2Q.

In June 2016, a random sampling of over 62,000 NAR members with an interest in commercial real estate was asked for their input.  Nearly 1,000 responded with completed surveys, for a response rate of 1.6%.  A quick look at the resulting numbers:

  • Percentage of members completing a commercial lease transaction: 59%
  • Average transaction value: $1.4 million
  • Percentage of sales volume rise from one year ago: 8.4%
  • Percentage of REALTORS who closed a commercial sale 2Q16: 66%
  • Average cap rate nationally: 7.0%
  • Percentage of sales price increase year-over-year: 5.3%
  • Bump in leasing volume over previous quarter: 8.7% 

Number One Concern: Inventory

When asked for their number one concern,  responding NAR members answered that inventory trumped other concerns including bid/ask pricing gaps, financing availability, local and national economic conditions. Pricing and deal value averages are therefore expected to rise nationally as growing demand meets less-rapidly-growing supply.

NAR Members may download the entire report here (login required):

(Photo credit: Wikipedia)

2016 NAR Commercial Member Profile

Browsing through all 100+ pages of the 2016 NAR Commercial Member Profile released yesterday, I was struck by two things: a pipeline and a piano. (Correction for clarity: I wasn’t actually struck by anything, thankfully nothing as sizable as a piano. But I did notice two things right away.)

Pipeline 

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Chart from NAR Commercial 2016 Member Profile

The data on transactions among Members arranged by years in the industry point to an enduring rule in the commercial real estate business about the transaction pipeline for new professionals.  We can boil down the rule this way:  the data says it’s going to take new folks about two years to hit their stride in terms of transactions, as it takes those two years for their deal pipeline to move to a “new normal” where transaction volume begins to resemble performance of more veteran careers. In other words, hang in there, new people. Keep adding value and being there for clients and the rewards will come.

Piano

The report comes this year accompanied by a nice video clip hitting the report highlights. It’s a solid bit of infographic work, but what caught my ear was the inspirational piano music.

The music was at once familiar and new. I couldn’t place it, so I pulled out my smart phone and used the music-identifying app Shazam  to try and discover the title.

That’s when Shazam did something I’ve never seen it do before: it became very confused. At first it identified the track as “Señor Blues”, a classic jazz recording from the late 1950s by the Horace Silver Quintet. Right away I knew it couldn’t be that — for one thing, the recording is too digitally pristine to be from the 50s.

So I tried again. This time, Shazam placed it as Beethoven’s Romance No.2 in F Major. Get a grip, Shazam. Not even close.

Tried once more, and one more Shazam busted: it said we were listening to 19th-century Czech composer Bedrich Smatana’s “The Little Onion”.  Incorrect, even if the title did pick up on the fact that I was hungry.

I guess even Shazam needs a couple of days off. Have a good weekend, everybody.

Source: 2016 Commercial Member Profile | realtor.org

 

Commercial Innovation Grants: Accepting Applications Now

Applications are now open for the Commercial Innovation Grants program held by the Commercial and Global Services division of the National Association of REALTORS®. The program provides financial resources for new commercial programming at REALTOR® associations that have an active commercial structure.

To obtain approval, proposals must demonstrate an impact on the association. Winning projects might take the form of new programs, new products, services or processes that improve an organization’s commercial real estate presence.

Check out the page at Realtor.com/commercial dedicated to the program to find the grant application form as well as a nice listing and summaries of proposals that have been green-lit, ranging from new software applications to learning-day sessions to new study methods examining cases of listing proposals — and everything in between.  You’ve got time to think it through: completed forms must be submitted by December 31st, 2016.

Ready, set, innovate!

How To Apply

To apply, download and complete the Commercial Innovation Grant Application (.DOC, 35KB). If you have any questions during the application process, please contact Shara Varner at 312-329-8282 or via email at [email protected].

Key Dates for the second cycle of 2016 Commercial Innovation Grant Applications:

  • June 1st: Application period opened
  • July 31st: All application materials due
  • August 31st: Grant recipients contacted

Don’t forget: first cycle grant recipients must download and complete the executive summary (.DOC, 17KB). Completed forms must be submitted to Shara Varner by December 31st, 2016.

Survey: CRE Lending Trends

The NAR Commercial annual report Commercial Real Estate Lending Trends 2016 is now available for free download. The 31-page overview of the national commercial property markets includes a great many leading and trailing indicators that situate the commercial property markets in the wider economy.  Wondering what sector added the most jobs in 2015?  (It was business and professional services.)  Like to know the total CRE closed transactions in ’15?  $534 billion, says NAR research partner Real Capital Analytics.  Interested in the national average for a commercial real estate deal in 2015? $1.8 million.

You can get this overview for free in two ways.  Download a PDF using this link, or peruse the report clicking on the image right below in this page.  Happy reading!

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Average Sales Volume, Prices Up: 2015 Q4 Commercial Real Estate Market Survey

The latest survey of the national CRE market was published late last week. The key takeaways from the most recent survey sampling randomly from nearly 50,000 REALTORSⓇ holding an interest in CRE:

  • Sixty-six percent of commercial REALTORS® closed a sale.
  • Sales volume rose 7.4 percent from one year ago.
  • Sales prices increased 4.1 percent year-over-year.
  • Cap rates averaged 7.8 percent.
  • The average estimated transaction value slid from $1.9 million in Q3 2015 to $1.6 million in Q4 2015.
  • Sixty-three percent of members completed a lease transaction.
  • Leasing volume advanced 3.0 percent from previous quarter.
  • Leasing rates increased 2.5 percent over the previous quarter.
  • Concession levels declined 3.1 percent on a quarterly basis.
  • Inventory shortage topped the list of current challenges, followed by buyer-seller pricing gap and local economic conditions.

To read the entire report, click below!

Commercial Real Estate Market Survey, Q4 2015

 

Commercial REALTORS®: Apply For The 2016 Commercial Innovation Grant

Through its Commercial Innovation Grant program, he National Association of REALTORS® (NAR) is interested in funding “game-changing ideas that deliver a benefit to commercial members or add value to commercial real estate professionals.”

Grant applicants can be local associations, or individual members who are deemed to meet the innovation criteria.  The full list of criteria,  found on the program application, touch on measurability, budget, educating the genera: membership, and other key criteria.

Download the 2016 Commercial Innovation Grant application here.

Important Details:

  • Not all applicants receive grants.
  • NAR does not fulfill requests for funding towards general Operating Expenses.
  • If you have received a 2015 Innovation Grant you must have submitted your 2015 Executive Summary in order to be considered for a 2016 Innovation Grant.

Applications must be submitted by February 29, 2016, to be eligible for consideration. Grant recipients will be selected by March 31, 2016 and notified via email.

 

Presenting the 2015 National Commercial Award Winners

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At NAR Expo 2015, the announcement came for the year’s winners of the National Commercial Awards. We offer our deepest congratulations to these leaders in their markets and associations!

As is so often the case, the credentials are strong with this group – you have Certified International Property Specialists (CIPS), Society of Industrial and Office Realtors (SIOR), Accredited Buyers Representatives (ABR), Certified Commercial Investment Members (CCIM) just to name a few of the distinctions these leading professionals have amassed.

2015 Winners Poster

Pick up a poster with all the winners printed on it by downloading a PDF right here. 

2015 Winners Handout

Or get all the winners in a handy two-page handout format – grab that PDF from this link.

The Program

If you want to recognize the sterling achievements of a commercial professional in your association or market, it’s easy.  Contact Shara Varner at [email protected]

Commercial Events, Meetings And Sessions At REALTORSⓇ Expo 2015

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For all location details, visit www.realtor.org/Conference.

Wednesday November 11th, 2015

  • CIPS – Asia/Pacific & International Real Estate (registration required) 8:00-5:00pm
  • Discovering Commercial Real Estate (registration required) 8:30-11:00am

Thursday November 12th, 2015

  • Smart Growth for the 21st Century (registration required) 8:00-12:30pm
  • Commercial Legislation & Regulatory Advisory Board 12:30-2:00pm
  • Commercial Real Estate Research Advisory Board 2:00-4:00pm

Friday November 13th, 2015

  • Land:  Investment Opportunities 8:30-9:30am
  • Commercial Committee Meeting 8:30-10:30am
  • Property Management Forum 10:30-12:00pm
  • Commercial Lending & Financing 10:30-12:00pm
  • Land Use, Property Rights, and Environment Committee 10:30-12:30pm
  • Be Involved in Economic Growth w/RPR Commercial 11:00-12:00pm
  • Commercial Economic Issues & Trends Forum 1:00-3:00pm
  • Be Ready:  1031 Exchanges Enhance You Professional Value 1:30-3:00pm
  • Commercial Marketplace at the Expo 3:00-6:00pm

Saturday  November 14th, 2015

  • Commercial Caffeinated Networking Breakfast (registration required) 7:30-8:45am
  • Commercial Leadership Forum 9:00-11:00am
  • Commercial Marketplace at the Expo 9:00-4:00pm
  • Be Ahead:  Advanced 1031 Exchanges are on the Rise 11:00-12:30pm
  • Insight: Top Ten Issues Affecting Real Estate 1:30-2:30pm
  • Commercial Red Carpet Networking Reception (registration required) 6:30-8:00pm

Sunday November 15th, 2015

  • Top Ten Issues Affecting Real Estate 9:00-10:00am
  • Commercial Marketplace at the Expo 10:00-5:00pm
  • Using A Drone in Your Business: Knowing Your Risk 11:00-12:30pm
  • Top Ten Commercial Agent Success Strategies 1:30-2:30pm

Monday November 16th, 2015

  • Commercial Marketplace at the Expo 9:00-1:00pm
  • Deal Making! Event at the Commercial Marketplace 9:30-12:30pm
  • Be Ready: 1031 Exchanges Enhance You Professional Value 10:45-12:15pm

Commercial Marketplace at the Expo: Learning Theatre Schedule

Friday November 13th, 2015

  • Commercial Broker 101 – Best Practices for your Career 3:30-4:30pm
  • All New CommercialSearch.com Demo Night 4:30-6:00pm

Saturday November 14th, 2015

  • Efficiently Finding the Right Lender 10:00am
  • IREM: Your Partner For Success in Property Management 10:30am
  • Why Land?  The Dirt on Dirt! 11:00am
  • Lead Generation & Management 11:30am
  • What’s New at SIOR 12:00pm
  • The Importance of Placemaking 12:30pm
  • Generating Traffic to Your Listings 1:00pm
  • Can Green Buildings Improve Your Bottom Line? 1:30pm
  • Analyzing the Market 2:00pm
  • CCIM: How Education Leads to Being the Best of the Best 2:30pm

Sunday November 15th, 2015

  • Why Commercial Investors are Trending Green 10:30am
  • Positioning Your Commercial Property Against the Competition 11:00am
  • 1031 Exchanges: Build Your Clients Reasons to Sell 11:30am
  • Building Security Using Smart Locks 12:00pm
  • Minimizing Time & Maximizing Impact 12:30pm
  • When 9-1-1 Falls Short 1:00pm
  • Peer to Peer Commercial Real Estate Lending 1:30pm
  • The Language of Commercial Real Estate 2:00pm
  • Influential Women in Commercial Real Estate 2:30-3:30pm
  • Analyzing the Market 3:30pm

Monday November 16th, 2015

  • Deal Making! Event (registration required) 9:30-12:30pm

Ten Ways To Benefit From A Live Dealmaking Event

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Announcing a special event at the 2015 REALTORSⓇ Expo in San Diego: Deal Making In The Commercial MarketplaceHosted by Peter West, CCIM, ABR, CRS, this event brings together deal making professionals from around the country to pitch, showcase and review properties.  Register for the event here.

Peter has put together a list of Ten Ways To Benefit From Attending A Live Dealmaking Event!

1) Dispose of Property

This forum allows you to present your listing to brokers from all over the country gaining maximum exposure for your sellers.

2) Acquire Property/Project

Attending this meeting will expose you to a variety of properties that you might not have seen on the marketplace, thus gaining more opportunities to present to your buyers.

3) Solve a problem

Ever have a tough listing? At this event you will hear how others are handling the same type of tough listings. Maybe you can exchange out of it into something else.

4) Obtain Funding

Many times participants have contacts with lines of cash. Attending this forum may provide you with additional resources to close deals.

5) Networking

You will leave this event with a directory of all the participants and contact information. This will allow you to meet and network with other commercial practitioners from around the country.

6) Provide Funding

Do you have a client that has cash and isn’t making a great return at the bank? Do you have a client that would like to improve their return on their IRA? You can present your “cash” and find a suitable opportunity.

7) Obtain Expertise

There will be other practitioners at this event with the same situations that you have as well as practitioners that have a special expertise. Come meet with them and build your network!

8) Provide Expertise

Do you have a unique specialty? Offer up your specialty to other brokers that may need yourservices in the future.

9) Provide Services

Do you provide niche services? This is an ideal forum to let other commercial practitioners what you do.

10) Learn

You will always come away with a new idea or approach to handling a certain listing or how to help a buyer through a situation.

Peter West has been a Realtor since 1984. He is licensed in MA, NY, VT, and FL. Peter has been awarded the prestigious SEC designation from the Society of Exchange Counselors. He also has the CCIM, ABR, and CRS designations.

Peter is a former National Sales Trainer for Century 21 Real Estate Corp. Currently Peter trains real estate agents throughout all of North America. He is a frequent presenter of the National Association of Realtors buyer agency programs.

Latest NAR Commercial Real Estate Outlook

 

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas is provided by REIS Inc., a source of commercial real estate performance information.

Office Markets

Office vacancy rates are forecast to slightly decline from 15.7 percent in the fourth quarter to 15.6 percent through the fourth quarter of 2015.

The markets with the lowest office vacancy rates in the fourth quarter are Washington, D.C., at 9.3 percent; New York City, 9.6 percent; Little Rock, Ark., 11.6 percent; San Francisco, 12.2 percent; and Seattle, at 12.8 percent.

Office rents are projected to increase 2.4 percent in 2014 and 3.3 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 35.6 million square feet this year and 48.8 million in 2015.

Industrial Markets 

Industrial vacancy rates are expected to fall from 8.8 percent in the fourth quarter to 8.4 percent in the fourth quarter of 2015.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.6 percent; Los Angeles, 3.7 percent; Seattle, 5.8 percent; Miami, 6.0; and Palm Beach, Fla., at 6.5 percent.

Annual industrial rents should rise 2.4 percent this year and 2.9 percent in 2015. Net absorption of industrial space nationally is expected to total 110.7 million square feet in 2014 and 102.5 million square feet next year.

Retail Markets

Vacancy rates in the retail market are expected to decline from 9.7 percent currently to 9.5 percent in the fourth quarter of 2015.

Currently, the markets with the lowest retail vacancy rates include San Francisco, at 3.5 percent; Fairfield County, Conn., 3.9 percent; San Jose, Calif., 4.6 percent; Orange County, Calif., 5.2 percent; and Long Island, N.Y., at 5.3 percent.

Average retail rents are forecast to rise 2.0 percent in 2014 and 2.5 percent next year. Net absorption of retail space is likely to total 11.4 million square feet this year and jump to 18.9 million in 2015.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates slightly increase from 4.0 percent currently to 4.3 percent in the fourth quarter of 2015. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are Orange County, Calif., and Sacramento, Calif., at 2.2 percent; Providence, R.I., and New Haven, Conn., at 2.3 percent; and Hartford, Conn., at 2.5 percent.

Average apartment rents are projected to rise 4.0 this year and 3.9 percent in 2015. Multifamily net absorption is expected to total 216,300 units in 2014 and 171,200 next year.