Global Real Estate Investment hits $604B for 2011

2011 Investment is reported to have reached the second highest in the last 10 years.


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Bay Area Tri-County Market Overview

Optimism pervades the multi-family market in the Bay Area Tri-County

Looking ahead to 2012, Latitude 38 Group has identified excellent investment opportunities in the Bay Area Tri-County and has put together a market overview showing the major trends in this area.

Renter demand in San Francisco, Santa Clara and San Mateo counties continues to grow intensively, fueled by booming tech-sector job creation. The limited supply of housing in preferred urban neighborhoods has led to increasing demand in nearby communities in the Peninsula. Because of their proximity to the tech-startup companies, demand in Santa Clara and San Mateo County has been affected most positively. 

Rising rents are attracting investors targeting apartment properties.

In recent years transactions and sales velocity across both counties have built momentum, bringing cap rates close to those in the city.

This has created an opportunity because prices still have not reached pre-recession levels and therefore new development has been delayed. Find out more:CLICK HERE

Head to www.l38group.com for more in-depth look at the multi-family market. 

Apartments are certainly the flavor of the year for REITS

REITS that generally have a core competency in other sectors than multi-family are now investing in apartments. This is driving the apartment sector to yet another level in pricing. Pricing levels that are certainly starting to feel like a bubble.

To read more Click Here 

Should We Be Concerned about the China Bubble?

 

How concerned should we be about The China Bubble? Definitely not as concerned as the possible the bubble in our tech market or the collapsing Euro.

I also think this article lacks merit because a lot of the equity in the China market comes from savings rather than just borrowing. If there really is a China Bubble, as far as our local real estate market is concerned, I see it as a positive. The Chinese are super smart people, have a great handle on what’s going on globally and therefore are very likely to mitigate their risk and spread their eggs further afield than just their local market. That is, they will be more inclined to invest in real estate here in the US.

It makes sense to invest in US real estate. We are close to or at the bottom of our market. Leverage has never been better. Our economy is still the strongest in the world and with a world population at 7B and ever increasing, there is still a premium to Commercial Real Estate.

Team Member Spotlight: Danny

Greetings, everyone! my name is Danny and I was the marketing intern here at Latitude 38 Group. I have been working here for the past six months and have had a great time here. I'm the guy responsible for updating this blog and our Facebook and Twitter pages. Unfortunately I'm on my way out but it has been a pleasure posting and commenting on our posts.

Here's a little about myself, I was born in Hong Kong (my family, however, is actually Burmese) and moved here when I was 12, and I have lived in the Bay Area ever since. I did my undergraduate studies in engineering at UC Davis and now I am working towards my MBA at the University of San Francisco. When I need a break from the pressures of life, I love to unwind by grabbing some food with friends and singing my heart out at karaoke. I may not be the best singer out there, but I am certainly the loudest.

Latitude 38 Group would like to thank Danny for his great contributions to our group. We thank you for everything you did for us and always going above and beyond what we asked for. We wish you the best of luck!

Deals Decline in U.S.

In the past three months, the U.S. commercial real estate market has slowed. A total of $49.8 billion of commercial property was exchanged in the third quarter, down from $58.5 billion in the previous three months, according to Real Capital Analytics. The 15% decline is the second biggest since the first quarter of 2009.

New York City is Top Global Commercial Investment

Based on the a new report, New York City is the top global commercial investment in the third quarter, with a 165% increase in activity.

Recovery Slows in Commercial Real Estate

Early this year, John B. Levy, principal of John B. Levy & Co., a real estate investment bank in Richmond, Va, said the market seemed to be recovering. Now he is not so sure. In fact, he says it could be heading towards a cliff. The fear is that there won't be enough capital to refinance commercial loans.

Archstone Sale Likely to go for a Huge Price

The Archstone Portfolio is an amazing collection of multi-family assets. Probably as good a portfolio of this scale and quality that will come up over the next decade.

800 Market sells for $1100/ft.....now that's frothy

San Francisco is now moving past the 06’ – ’07 pricing – exciting but somewhat of a concern as there is millions of square feet of available space. It does however bode well for property owners in San Francisco and to some extent Silicon Valley but don’t go any further – there is a cliff.

Click here for more information

Could China Property Prices Drop?

According to a Standard Charted Bank research report, signs of a bubble are surfacing in China's selective tier one cities. While the prices are expected to stay firm in these cities, a drop in prices in tier two cities is expected.

Is Commercial Real Estate Improving?

This is an interesting piece by ParkRecord.com about the current state of commercial real estate. It's common knowledge that for several months commercial real estate appeared to have been the local industry most severely affeccted by the recession. According to some experts, though, this is improving somewhat. While widespread commercial foreclosures were predicted, this has not occurred. Maybe the good news here is that things aren't getting worse.

NOW IS DEFINITELY THE RIGHT TIME TO SELL

1)      Interest rates at a steady low,

2)      Rents are still improving

3)      Frothy cap rates

4)      Buyers are still very active

5)      Financing in multi-family is still very available

6)      Pricing is close to an all time high   

7)      Cash will be king in the next few months

8)      There will be some of the greatest buying opportunities of our time in the next few years

9)      The down market will definitely impact the commercial real estate values

Help us sell your property in the next 21 days. Either by a full marketing campaign or quietly bringing the property to a few very qualified, motivated buyers. We can handle anything from $1m to a $1B portfolio.

Click here for more info

 

An Oasis Surrounded by a Sea of Misery

San Francisco is certainly an odd ball city, however as far as investment in real estate is concerned, it is cookin’.  While there are still a lot of issues, the economic boost from social media, biotech, clean tech, especially in South of Market (SOMA), are creating a new bubble. Or in other words LaLa Land, frothy investment market, overheated environment, crazy numbers – whatever else you would like to describe it, it’s here ….again.

Rents on the Up While Vacancies Go Down

Apartment landlords are having a good time as rents rise and vacancies fall. The average effective rent in the second quarter was $997, which is up from $974 the year before. The rent levels rose the fastest in San Jose to $1,501 in Q2 while the effective rents for San Francisco, Wichita and New York were $1,806, $495, and $2,826, respectively. Vacancies in the second quarter also fell in 72 of the 82 markets with a vacancy rate of 6%, down from 7.8% the year before.

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Surban Office Market in Limbo

Office buildings in New York, Washington, and San Francisco have been showing an unexpected recovery. Unfortunately, the surburban market hasn't been so lucky. Vacancy rates have started to fall in cities while staying flat in the suburbs, in part due to declines in the surburban heavy seactors such as housing. The index tracking suburban office property values has stayed relatively flat after falling more than 42% from peaks.

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Rates Up in Silicon Valley

Rents in Silicon Valley rose by 12.6% in Q2 with the average of $1,759-a-month topping all markets in the country. According to RealFacts, some of the biggest rent hikes came in Sunnyvale, which was up 17.6% from last year. San Mateo and Mountain View were up 14.5% and 13.2%, respectively. The most expensive rents are in Cupertino and Palo Alto.

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Developer Kushner Finds Help

Developer Jared Kushner has reached a tentative deal to rescue his investment in 666 Fifth Ave in Midtown New York City. He bought the office tower for a record-high of $1.8 billion but struggled with a heavy debt load. Right Kushner reached an agreement with LNR Property Corp. on the outlines of a deal that would allow him to hold the tower by modifying the $1.2 billion morgage tied to the office portion of the building.

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Singapore and Blackstone Compete for Japan Property

Global Logistic Properties, LTd., majority owned by Singapore's sovereign-wealth fund, is in final negotiations to acquire a Japanese real estate portfolio worth up to $1.7 billion. Private-equity firm Blackstone Group is also in close competition with GLP to acquire the portfolio. This could be the biggest property deal in Japan in two years.

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Student-Housing Developments Seen in New Light

The student-housing sector has been gaining respect lately. With rising college enrollment and landlords boosting rents, returns of REITs that own student housing are approaching those that focus on rental apartments. New development and sales of the properties are also increasing. American Campus Commuinities, Inc. the nation's first and largest student-housing REIT, has posted a return topping 30% in the past year. Educational Realty Trust, Inc. has had a gain topping 35% for the same period.

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