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Thursday, June 30, 2011

New Construction on Residential Condos

I happened to notice that there is some new construction going on.   Recently, they started some new townhouse condo units at the corner of Shelbyville Rd and Dorsey Lane.   This development started a few years back and I was surprised to see these new units starting.   Most of the market data on condos indicates that they are a hard sell right now especially because they are difficult to finance.    Still, it is good to see some construction activity.  I am sure that the contractors are grateful to have some work and I hope that they are successful.   

We are coming up on the 4th of July and all day I have been hearing about people planning to take tomorrow off for an extended weekend or vacation next week.   So, I am guessing that things will be quiet tomorrow.

Have a great holiday weekend.   

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, Ky  40299

Tuesday, June 28, 2011

Slowing Economy and Slumping Demand?

We seem to be hitting a summer lull in Louisville commercial real estate activity.   Louisville seems to be falling in line with the rest of the country as we begin to feel a second slow down in economic activity.   Brokers I am talking with in other parts of the country are reporting similar situations.   One friend from the Pennsylvania area tells me that it was as though someone turned a spigot completely off about 2 weeks ago.   

I am noticing that while I have several deals in the works, that my activity has decreased.   The number of phone calls and e-mails is down and transaction times are increasing.   While these feelings are hard to quantify, a look at some internet statistics seem to back this up.    One of my on-line listing services reported a total of 2,292 hits on the top ten listing for the Louisville area over the last 30 days.   Two months ago, (April 29) this same listing service reported more than 3,100 hits for the top ten listings in the Louisville area.    Although this is not a scientific sample or study, it does give pause to see that the total hits on the top 10 listings is down about one third.   

Also telling is the what people are looking at.   Of the top ten most active listings on this service, 5 were retail properties (cumulatively receiving 1357 hits), 4 were multifamily listings (cumulatively receiving 742 hits) and one was a Hotel / Motel listing receiving 193 hits.     Office, Industrial and Land were absent from the list.

Recent headlines indicate that the economy is slowing again.    Recently, an economist from the St Louis Federal Reserve branch spoke to the Louisville Home Builders Association and reportedly told them that we were in a double dip recession.   

The bottom line is that we remain in a real estate market in correction.   My advice to property owners remains the same.   In a very difficult market, in order to compete, you must be very agressive in marketing your properties.   In pricing and condition of the property, you want to position yourself to be in the top 2% or 3% in order to be successful.

Let me know if you have any questions about this information OR if you have questions about your own property.   I would love to be of assistance.  

Have a great day.

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299

Thursday, June 16, 2011

Delinquent Property Tax Bills

In yesterday's Courier Journal, 21 pages of delinquent property tax bills were published as a Legal Notice for their sale on July 21, 2011.    The public at large then has the opportunity to purchase tax obligations from the County Clerk in exchange for a Certificate of Delinquency which attaches a tax lien against the property.  In this way, the County is able to collect the delinquent taxes for their expenses and the purchaser is allowed to charge 12% interest against the debt until it is paid.   Not too bad in a world where we get 1% or 2% on our savings accounts.

Of course, the problem is that you have to collect the money.   If you are unable to collect, and the property owner fails to pay their property tax next year, you get priority to buy the next year's obligation as well.   This would allow you to bring a foreclosure action against the property in order to have the debt satisfied.  Having a tax lien against the property would put your obligation at the top of the line in satifying the debt and also would provide for you to collect reasonable and necessary legal fees.       

If this sounds like it might be of interest to you, I'm afraid that it is already too late for this year.   In order to buy the Tax Delinquency Bills, you have to register at least 60 days before the sale, which would make yesterday's notice in the paper about 24 days too late.     With the sale schedule for July 21, the last day to register would have been May 22.    

Maybe next year.

Have a great day.  It looks like it is going to be a great one and be sure to let me know if you need any help with your real estate needs!  

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299

Wednesday, June 15, 2011

Louisville Market Activity

My experience for the year is that overall market activity for commercial real estate here in Louisville has been uneven.    I have had several runs of 2 or 3 weeks when things were very busy followed by 2 or 3 weeks where appointments were canceled and people would not return phone calls.  

Lately, I have been having another busy streak.   One listing I have has had several proposals and requests for proposals.   Another listing has a lease presently under negotiation.  A tenant rep client of mine is trying to negotiate a lease with a landlord.   AND another listing of mine has two people both promising that they intend to submit purchase offers (although we have been waiting a week for both of these so far)

Persistance is very important to getting a transaction closed. Two or three years ago, this amount of activity would have seemed like a sure bet but in today's uncertain economy, prospects on both sides of the transaction will suddenly unexplicably disappear.   

Especially now it is important to not count your chickens before they hatch.   Continue to pursue all options until your deal is signed. 

Have a great (albeit rainy) day and let me know if you need help with your real estate needs.

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299

Friday, June 10, 2011

Real Estate and Luck

A fair amount of success with Real Estate is luck.    There are those who work very hard and seem to have fate work against them at every turn and there are those who seem to just have things thrown in their lap.    I sometimes hear people say that they make their own luck and usually I find that these people have been extraordinarily lucky and unfortunately are not humble enough to realize how kind the fates have been.   That said, I would agree that you do not have to be totally at the whims of fate.  Like any commodity, real estate has market risk and property specific risk.

Market Risk includes overall state of the economy, the employment rate, interest rates, availability of financing, and consumer confidence levels.     Most of these factors are outside of the control of the real estate agents, buyers, sellers, landlords and tenants.    While we cannot control these factors, the other side of the coin is that we cannot ignore them and pretend that they do not exist.  These factors define the frame within which we must work.   If we ignore them, our chances of success are slim.   Of course there will always be stories of people who were lucky and managed to have a terrific windfall in spite of ignoring all the signs.   There is also always a lottery winner, but that does not make it reasonable or smart to invest all of your retirement savings in lottery tickets.

Being fairly risk adverse, I like to read the market and make decisions based upon those readings.  Pricing and property condition are factors that do not have to rely on chance.   Still, when I see a penny on the ground, I am going to pick it up for luck and I am not opposed to burying a St Joseph figurine on the property to help it sell. (smile)

Have a great day and a great weekend.   Stay cool and enjoy summer.  It's just awesome, isn't it?

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Parkway
Louisville, KY  40299