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Friday, December 30, 2011

Marriage and Real Estate

You might be surprised to know that in about half of the states, marriage provides a special kind of real estate ownership known as Tenancy by the Entirety. This type of ownership is unique in that the law in essence treats the married couple as though they were one unit. The interest in the property cannot be severed without the consent of both or the death of either. Upon death of one, the surviving spouse remains as sole owner.

In other states, married couple may own property according to the legal concept of Community Property. These laws treat the married couple as though they are business partners. States recognizing the concept of Community Property consider property acquired during the marriage to be equally co-owned by husband and wife. Each has a one half interest in property acquired by either during the marriage no matter how the title of the property is held.

This is not to say that spouses cannot have individual title to property, however. Even in Community Property states, there is a concept of Separate Property which separates property as belonging specifically to one spouse if it was acquired prior to their marriage or if it was acquired during the marriage by gift or inheritance.

While these may seem like bland concepts, this information will become very important to you IF you have a real estate deal go bad, you find yourself in the unfortunate position of facing divorce, or someone wants to collect some debts by foreclosing on real estate.

Especially in Commercial Real Estate, it is commonly assumed that these laws do not apply. And in practice, the majority of commercial real estate deals occur without a hitch. But it is a mistake to think they do not apply. Kentucky real estate law requires a listing contract to be written and signed by all owners. Likewise, real estate contracts must have the signatures of all of the owners. Also, you may not be able to borrow money without your spouse's approval.

If you are married, your spouse may well be partial owner of the property. The net effect here is that in Kentucky you cannot legally sell your property without your spouse's consent, nor can you legally buy property using borrowed money without your spouse's consent. You can purchase property for cash without your spouse's approval however you may well share ownership with your spouse in that transaction.

An agent friend of mine recently discovered the difficulties that these laws can cause when he sold an office condo. He had a signed listing agreement from the owner of the condo, received an offer on the condo which the owner of the condo accepted. He had a contract signed by both buyer and seller. Unfortunately, the Seller got cold feet and decided he did not want to sell after all. None of the contingencies of the contract would allow him to renege on the offer. The Seller relied on Kentucky State law to declare that the listing contract and the purchase and sales contract were both invalid because they did not have the signatures of his wife, a partial owner by Kentucky State law. Since state law requires a written contract with signatures of all of the owners of the property, the contract was not valid.

These kinds of problems can sometimes be avoided with a little foresight.   If a property is held in a company name, I like to ask for a copy of a company resolution which states that the signing party has the authority to bind the company.    If the property is held individually or jointly with individuals, the best practice is to have all parties sign, including spouses even if they are not listed on the deed.   If for some reason, it is not practical for all parties to sign, I like to ask that the signing party have an executed power of attorney to demonstrate that he / she has the authority to sign for all parties.  These documents can then be added as exhibits to the contracts.  

Let me know if you have any questions or comments.   Thanks for reading.

Notes, Disclaimers and such -

BTW - If you need any help with real estate, give me a call.   I specialize in Commercial Real Estate and work with Buyers, Sellers, Landlords, Tenants and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even set you up with a residential specialist if you need help there.  

ALSO - I am sure that my managing broker would appreciate me clarifying that the view expressed here are my own and not necessarily those of Commonwealth Commercial Real Estate, its brokers, agents, or employees (other than me, of course).   If you have a question, comment or opinion you would like to express, you are free to add one in the comments sections.   What you are not free to do, is to make inappropriate, or offensive remarks.   Should I see any such remarks,  I will exercise my right to delete them.


David

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

ofc: (502) 379-6005
cel: (502) 905-5274
www.ccre.biz

Tuesday, December 27, 2011

Positive Outlook for Commercial Real Estate?

If you have been reading along for a while, you know that I think a lot about the economy and taxes.   Commercial Real Estate activity is obviously dependent on how well the economy is doing.   The last few years, we have had several fits and starts where it appeared that the economy was trying to improve.   And while I have analyzed inflation, taxes, international trade, consumer confidence, and other economic indicators, the fact is that one of the best predicters of real estate activity is unemployment.   

It's really obvious when you think about it.  When people have jobs, they can afford to buy a house, goods or services.   If they do not have jobs, they have to cut back on purchases and maybe have to sell a house.   Likewise for businesses, if they are hiring more people, they will at some point need more space for them to work, whether in a warehouse or an office.    If on the other hand they have to lay people off, they need less space.   

The last couple of months, we have been getting good reports on the jobs front.   While there are many pundits telling us that the improvement is not nearly good enough, the fact is that unemployment has decreased.  Certainly, I would like it to decrease faster but as long as it is decreasing, we can expect there to be an improvement in the commercial AND residential real estate markets.

So, keep your fingers crosssed for continued improvement in 2012 and have a great day.  

Thanks for reading.

Notes, Disclaimers, and such -

I am sure that my managing broker would appreciate me clarifying that the views expressed here are my own and do not necessarily represent the opinions of Commonwealth Commercial Real Estate, it's brokers, agents, and employees (other than me, of course.)   If you have a comment or another opinion, you are welcome to make a comment.   However, you are not welcome to make inappropriate, inconsiderate or hateful comments.   Should I see any such comments, I will exercise my right to delete them.

BTW - If you know someone in need of help with real estate, give me a call.  I specialize in commercial real estate and I work with Buyers, Sellers, Landlords, Tenants and Investors.  I handle Office, Industrial, Land, Investment and Retail properties. Heck, I can even set you up with someone to help with residential property.

David

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

ofc:  (502) 379-6005
cel:   (502) 905-5274

DMcCoy@ccre.biz
www.ccre.biz

Wednesday, December 21, 2011

Retail Surprise at Springhurst Towne Center

It would appear that Santa came early for our friends in the Hocker Group.    The Hocker Group was until recently the owners of Springhurst Towne Center shopping center on Westport Rd, which almost everyone seems to associate primarily as the home of Tinseltown Cinema.    The Hocker Group bought this center about 2 years ago for about $42.4 Million from the Centro Properties Group, which was a Real Estate Investment Trust out of Australia which was having financial difficulties due to the world wide recession and real estate crash.   It was announced last week that the center had been sold on December 7th to the California State Teachers Retirement System for $78 Million.  

The obvious question now is, does this indicate a big turning point in retail property values in Louisville?   Since the financial crash in 2008, property values of retail properties have been hard hit.   Although this is a very encouraging sign, I am not ready to declare an end to the difficulties in the retail market.  When you look around the city, there is still a lot of vacancy and until we begin to see occupancy levels returning to pre-recession levels, I don't think we can begin to celebrate.

For our friends with leases in Springhurst Towne Center, they can expect to get a different kind of surprise next year.    Most retail leases require the tenant to pay their pro-rata share of the real estate taxes on a property.    With a sale at nearly double the price of the previous sale, they can expect those taxes to also double next year when the property is re-assessed due to the sale.  

In any case, Kudos to our friends at the Hocker Group. They obviously hit a home run with this one.

Have a great day everybody!  

BTW - If you have a real estate question or problem, give me a call.   I work with Landlords, Tenants, Buyers, Sellers and Investors.  I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even hook you up with a residential broker if you need one.   I would love to help

ALSO - I am sure that my managing broker would appreciate me clarifying that the views expressed are my own and do not necessarily represent the views of Commonwealth Commercial Real Estate, its brokers, agents, or employees (other than me, of course).  If you have a question or a different opinion, you are welcome to express it in the comments, or give me a call.   However, you are not welcome to make inappropriate or offensive remarks.   Should I encounter any, I will exercise my right to delete them.

David

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

www.ccre.biz

ofc: 502-379-6005
cel: 502-905-5274

Tuesday, December 20, 2011

Downtown Office Available 20,000 SF with Free On-site Parking

Med Center II - 1046 E Chestnut St


I am looking for some help for an extra nice property in downtown Louisville.   This former textile mill was renovated about ten years ago and features very nice office space with lots of large windows, sky lights, oak trim, and exposed brick walls.    This is a very nice property with lots of free on-site parking.    The ideal tenant would need about 20,000 SF although we can probably accomodate users for 2,500 SF, 5,000 SF, 10,000 SF or 20,000 SF.   

Some of the features follow - 
  • Up to 20,000 SF contiguous space available on 2 floors
  • Divisible to 2,500 SF
  • Super nice historical renovation of 19th century textile mill featuring exposed brick walls and large windows throughout
  • Ample free on-site parking
  • Downtown location with easy access to CBD, downtown medical district and to Intersta!te system
Extraordinarily nice office space in downtown area with free on-site parking.   This is ideal for executive office space where impressions are important.   Please let me know if you know of anyone who might have an interest.   

A few more interior pictures follow:





Thanks, so much.  Have a great day!

David

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

www.ccre.biz

ofc: 502-379-6005
cel: 502-905-5274

Wednesday, December 14, 2011

Bluegrass Industrial Park Activity

I have been surprised at how many people were interested in my post on Bluegrass Industrial Park from last April.    I am reviewing a listing I have in the park and decided to update the information.

Sales Data

Currently (as of 12/13/2011) there are 26 Industrial Properties listed for sale on KCREA (Kentucky Commercial Real Estate Alliance) which is about the same inventory level as last April.   Three Industrial properties in the Park have sold in the six month period since then (period of 5/1/2011 to 11/30/2011).   This included one 7200 SF facility, a 37,175 warehouse distribution building, and a 61,164 SF building.   

Leasing Data

As of 12/13/2011, there are 64 Industrial properties for Lease in Bluegrass Industrial Park.   This is a pretty good sized drop in Inventory from the 79 properties which were listed last April.    In the last 6 months, KCREA reported 36 leases signed.   Only 5 of these leases exceeded 10,000 SF.  

Analysis

It has seemed as though the market in Bluegrass has been improving and this snap shot of the Park would seem to confirm this.   Three sales in six months compared to three sales in eighteen months is a marked improvement.   At this rate, we would expect the time to sell the existing properties to be about 4 years.   Of course, this is still a long time but it is a big improvement over the 12 year expected rate from 6 months ago.    Still with only three data points, we need to be cautious in our optimism.   Certainly this is good news but thee sales does not necessarily indicate a trend.

Leasing also seems to have improved.   A decrease in the number of available properties and increase in the number of leases both bode well.    With an inventory of 64 properties for lease and 36 leases in 6 months, we might expect the existing inventory to be leased in about 11 months.   Once again though, when we look a little closer, we see that only 5 of these lease were for properties larger than 10,000 SF.   If we arbitrarily divide the market at the 10,000 SF line, we see things a little differently.  
  • Below 10,000 SF, we see an inventory level of 45 property with 31 properties leased in the last 6 months.   At this rate, we would expect the inventory of properties under 10,000 SF to lease in about 7 and 1/2 months.  
  • Above 10,000 SF, we see an inventory level of 19 properties with 5 properties leasing in the last six months.   At this rate, we would expet the inventory of properties above 10,000 SF to lease in about about 23 months, which is about half of the time we  would have expected last April.
Conclusion

I think that it is a little too soon to call the outlook rosy but things certainly look much better than they did 6 months ago.   Louisville has had some good economic news and the economy for the country has been improving.   I think that this is reflected in this activity.   What is harder to measure is business outlook.    On the street, I am still hearing a lot of worry among business owners.   A lot of deals are continuing to fall apart in the current economic climate and a lot of business owners are still trying to plan cautiously, asking for steep discounts and for short term leases.  Although things look better, I still recommend that Landlord keep their properties in top condition and keep them priced competitively.

Have a great day, everyone and good luck with your holiday shopping!  

Notes, Disclaimers and Other Info -

The information in this analysis came from the Kentucky Commercial Real Estate Alliance  (KCREA).   This information is maintained individually by the subscribing Commercial brokers and is not necessarily an accurate census of the activity.   It is only the information provided by the cooperating brokers and its accuracy is dependent on the individual brokers efforts to maintain their information.   Never-the-less, I think that it is a good indicator of the market at large.

ALSO, I am sure that my broker would appreciate me clarifying that the views provided here are my own and do not necessarily represent the views or opinions of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me of course)   You are welcome to present other opinions in the comments if you so desire.   HOWEVER, you are not welcome to make inappropriate or hateful comments.   Should I see any such comments, I will exercise my right to delete them.

AND FINALLY - If you know someone who would like some help with real estate, give me a call.  I work with Tenants, Landlords, Buyers, Sellers, and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even hook you up with someone to help you with your residential real estate needs.    Give me a call, I would love to hear from you.

Thanks for reading! 

David

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

www.ccre.biz

Monday, December 12, 2011

Jefferson Pavilion - Development Parcels Adjacent to Jefferson Mall





For my property promotion today, I am looking for people that might need some land.  I have Three very nice Development parcels available adjacent to Jefferson Mall which are shaded red in the aerial shot above.   Features include –
  • 3 development parcels available –
    • parcel 1 - approximately 1.5 acres adjacent to GFS and Target - available at $375,000 / acre
    • parcel 2 – approximately 2.2 acres with frontage on Jefferson Blvd – available at $375,000 /acre
    • parcel 3 – approximately 16.5 acres adjacent to Target  - available at $175,000 / acre
  • Adjacent to Jefferson Mall home of more than 100 retail stores, including Macy’s, Dillard’s, Sears and JC Penney.   
  • Property already zoned C-2
  • All utilities are to site
The smaller sites would be great for smaller stand alone retail or office sites.   The large site could be a good site for a big box retail use, assisted living, or perhaps multifamily .     If you know of someone who might have an interest, please let me know or have them give me a call.  

Thanks so much for the help!  

BTW - If you need help with your real estate needs, give me a call.   I specialize in Commercial Real Estate and work with Landlords, Tenants, Buyers, Sellers and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even hook you up with someone if you need help with residential property.   I would love to help if I can.

David

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


Friday, December 9, 2011

Economic Development Issues - the case of Amazon.com

This is an interesting article published by CoStar about Amazon.com.    While the issue of economice development funds is interesting in and of itself, Amazon like the rest of the e-tail industry is unhappy about state laws that require it to collect sales tax on on-line sales.    In this case, Amazon abandoned a $100,000,000 proposed facility that would have created 1,250 jobs in SC because the state did not pass a law to exempt Amazon from having to collect the tax.  

http://www.costar.com/News/Article/Amazoncom-Flexes-Real-Estate-Jobs-Muscle-In-Location-Decisions/128728

The practice of Economic Development is in my experience an uncertain science.    States and municipalities regularly compete for large projects that would create new jobs and provide stimulus to the economy.   The results are sometimes unpredictable.  

What are your thoughts on this issue?   Should the state be willing for forgo large tax receipts in exchange for the jobs and the investment in the community?   I think that it is an interesting question.

Have a great day, all.  

David

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

Europe's Woes - Bretton Woods Deja Vu

It is easy to criticize the governments of Greece, Spain, Italy, Ireland and all of the other countries facing financial difficulties.    From one perspective, they have had an extraordinary run.   They have passed overly generous programs which have increased their debts well above sustainable levels.   The other citizens of the European Union may feel resentment in that they have been having to foot the bill for these excesses.

Even though this may all be true, the Greeks and other financially strapped countries are being offered no palatable choices.   With their economies already in trouble, you can understand the populace wondering how they can possibly survive.    From their perspective, it is a little like the government showing up at the soup kitchens and telling the indigents that due to budget difficulties they are going to shut them down.

Looking back at the European Union, these difficulties should not be a surprise.    The European Union has never really been an economic union.   The politics of nationalism prevented that from being considered.   Instead, the European Union could probably have been called Bretton Woods 2.0.   Bretton Woods was a currency exchange system used by countries to determine exchange rates from 1958 into the 1970s.     Bretton Woods fell apart in the 1970s when it became apparent that aritficially setting exchange rates between currencies was unsustainable.  

By adopting a common currency without a centralized government with the authority to enforce the financial and economics policies, they had in effect simply set up another currency pegging system.  When the EEC was in a boom cycle, the problems could be overlooked.    When things began to turn bad however, the individual economies had no alternatives to deal with their problems.   If they had their own currency, they could have allowed it to revalue itself against the other currencies.   This would not eliminate their economic problems however, it would allow the effects to be softened.

On the other hand, if they had a true economic union with a strong central government, with a common tax policy and common policies on things like unemployment assistance, much of the EEC residents concerns about the fairness of the system would be minimized.  In the current system, it is easy to see how the citizens of the countries in trouble might feel like they are simply being discarded in the trash. 

Europe seems to understand this now and it appears that it will either move toward a more centralized continental wide government to manage the EEC or the Euro will fall apart as the individual countries abandon it.  

From the United States perspective, the survival of the European Union is probably less of a concern than the survival of the European Financial system. The recent volatility on Wall Street, I think is much about whether the European Banks can survive the fall of the Euro. Given the world wide recession that occurred in 2008 when the US Banking system faltered, it is certainly understandable that the US and the rest of the world would have concerns of a similar international financial upheaval.

Unfortunately, there are no easy choices for Europe.   We can only hope things go well for them.

With that said, I hope things are going  well for you too.   Have a great day.

BTW - If you need help with real estate, give me a call.  I would love to help.   I specialize in Commercial Real Estate and work with Buyers, Sellers, Landlords, Tenants and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.  Heck, I can even hook you up if you need help with residential real estate. 

ALSO - I am sure that my managing broker would appreciate me clarifying that the views expressed here are my own and do not necessarily reflect the views of Commonwealth Commercial Real Estate, its brokers, agents, or employees (other than me, or course.)   If you would like to comment on these views, you are welcome to add comments.   What you are not welcome to do, however, is to make comments which are inappropriate or objectionable.   Should any such comments appear, I will exercicse my right to delete them.

Thanks, all.

David

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

Tuesday, December 6, 2011

Real Estate Mining & T Boone Pickens

When I graduated college in 1980, we were in the midst of another Economic slump.  That recession had double digit inflation, double digit interest rates, and double digit unemployment.   We were also dealing with an energy crisis which had led to a surge in oil and gas exploration throughout the country and really the world.     Oil prices were rapidly rising in response which was causing more problems with the economy.   As these prices rose and exploration became even more in demand, the cost of exploration and drilling also soared.

In this environment in the early 1980s, was the first time I ever heard of T Boone Pickens.   As far as I could tell, no one outside of Texas and perhaps Oklahoma had heard of him.   Mr. Pickens made the scene when his Oil and Gas Company, Mesa Petroleum began to make offers to buy much larger Oil and Gas Companies, including Citgo, Gulf, Phillips, and Unocal. 

At the time, people thought he was crazy.  But T Boone Pickens realized something that seemed to have escaped the market at large.    The value of the oil reserves of these companies at market oil prices exceeded the stock value of their companies.    In other words, as Mr. Pickens explained, it would cheaper to buy these oil companies than it would to actually drill for the oil.

Mr. Pickens successfully bought the assets of some oil companies but in most of the cases, his stakes in the companies was bought out at a large profit instead.    It also led to many mergers and acquistions between oil and gas companies for these same reasons.

That has always stuck with me.  It was a very astute and yet simple observation.  I can't help but wonder if when things turn around for real estate, and commercial real estate in particular if we could have something similar occur.   At some point in time, the value of the underlying real estate in Real Estate Investment Trusts could exceed the trading prices for the REITs.    If those prices vary significantly, we could see a similar market upheaval to the Oil and Gas Companies in the 1980s.

AND when and if we see this type of activity, it probably is a pretty good sign that the market has passed its bottom.

Just a thought.   Hope you have a great day.

BTW - If you want some help with any Real Estate needs, give me a call.  I would love to help.   I specialize in Commercial Real Estate and work with Buyers, Sellers, Landlords, Tenants and Investors.   I handle Office, Industrial, Land, Investment and Retail Properties.  Heck, I can even hook you up for residential needs. 

ALSO - I am sure that my broker would appreciate me clarifying that these views are my own and are not necessarily those of Commonwealth Commercial Real Estate, its brokers, agents, or employees.  (other than me, of course)  AND I probably should note that I am not a stock broker or investment counselor.    Those are questions for other professionals.    These are simply my opinions.  

David

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

Thursday, December 1, 2011

NICE 21,000 SF Louisville Industrial Building for Lease - Property Promotion for the Day



2520 Ridgemar Court

My Property promotion for the day -

Looking for someone needing a nice industrial building to lease.   This is a very nice warehouse building with a meticulous owner who has kept it very well maintained.    It is available for lease immediately.     Let me know if you know someone who may have an interest.

Features of this building include -

  • 21,000 + Square Foot Industrial building
  • Approximately 4,000 Square Feet of Office
  • 1 drive in door and 2 dock doors
  • Ceiling height of 18 to 22 feet
  • Located in Bluegrass Industrial Park, home to approximately 850 businesses and employing approximately 38,000
  • Easy access to two Interstate interchanges on I-64 (I-64 @ Hurstbourne Pkwy and I-64 @ Blankenbaker Pkwy)
This is a very nice and very clean industrial building and did I mention that it is available immediately?    The owner would love to get a new tenant.  Please let me know if you know of anyone looking for about 21,000 SF of industrial space in the Louisville area.  

Thanks so much!  Have a great day.

BTW - If you need help with commercial real estate, give me a call!  I work with Buyers, Sellers, Landlords, Tenants and Investors.  I handle Office, Industrial, Land, Investment and Retail properties.  Heck, I can even set you up with help on residential real estate if you need it. 

David

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