If you are reading this and thinking that this looks very familiar, you may have already read one of my entries on 2011 Land, Office or Industrial activity. I admit that I use almost the exact same format and even wording in order to make them a little faster to get out. That said, I promise that you are not reading the same thing under a different title. In that these reports are some of the most labor intensive reports I produce, I am simply trying to be as efficient as possible. That said, let's get down to business.
I'm continuing my review of Louisville Commercial Real Estate for 2011. Today, I am looking at the Retail Market. Here is what I found -
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 128 Leases for approximately 459,803 SF of Retail space. The median lease space was 1935 SF while the average lease was for 3,592 SF. Retail leases in 2011 ranged for spaces from 500 SF to 38,068 SF.
Regarding Retail Property Sales, KCREA reported 53 Retail Buildings sold in 2011 consisting of 291,022 SF selling for $14,289,750. The median building size was 4,200 SF while the median transaction size was $200,000. The average selling price per square foot was $50.70 and the average building size was 5,491 SF. The average sale was for $269,618. (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property or had invalid numbers entered.)
The largest Retail sales transaction was a 30,000 SF Building in Louisville which sold for $1,069,000. The smallest unit sold was a 718 SF unit which sold for $109,000. The smallest transaction in terms of price was a 1,756 SF unit in the CBD which sold for $14,000.
What this says to me -
At 128 leases and 53 sales for the year, we are seeing about 2.4 leases and 1.0 sales per week. Half of the leases are for less than 1,935 SF. It is interesting to note that the Retail market is far more uniform than the Office or Industrial market. This tells me that in 2011, there were few larger leases to dominate the statistics. While information on the term of the leases is not provided in the KCREA stats, conversations with other brokers leads me to believe that we are continuing to have shorter term leases.
For Retail Property Sales, more has been selling although again, mainly smaller properties at lower prices. It is worth noting that although there were more Retail Property sales, that the total dollar amount of the Retail Sales was much less than that for either Office or Industrial properties.
Recommendations -
The figures for Retail indicate that Retail Property is continuing to struggle. There was very little big box activity in Louisville in 2011 which you would expect when Retail Sales are down nationally. The improvement in Retail sales in late 2011 should bode well for 2012. If the economy continues to improve and especially locally if unemployment continues to improve, we can expect Retailers to begin to test the waters for expansion again.
That said, it may be a while for this to happen and so my recommendations remain the same. I would say that things are looking better. My retail colleagues in the office tell me that December was a very good month. Still, we continue to have a lot of inventory and downward pressure on pricing.
Successful Landlords and Sellers will keep their properties in top condition and price them competitively.
Notes, Disclaimers and Such -
BTW - If you would like me to evaluate your particular property, give me a call. Also if you need any help on any real estate needs, I would love to help. I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate. I work with Buyers, Sellers, Landlords, Tenants and Investors. I handle Office, Industrial, Land, Retail and Investment properties. Heck, I can even set you up if you need help with residential property.
ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course) If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections. What you should not feel free to do though is make comments which are inappropriate or offensive. Should I see any such comments, I will delete them.
Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance). This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity. It is also dependent on the individual brokers to enter and maintain their information. As such it is subject to some error. Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.
Let me know if you have any questions or if I can be of some help. Thanks for reading. Hope you have a good day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
Thursday, January 19, 2012
Wednesday, January 18, 2012
Louisville 2011 Industrial Review
I'm continuing my review of Louisville Commercial Real Estate for 2011. Today, I am looking at the Industrial Market. Here is what I found -
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 127 Leases for approximately 1,127,191 SF of Industrial space. The median lease space was 3924 SF while the average lease was for 41,748 SF. The largest Industrial Lease reported for 2011 was 162,000 SF while the smallest lease reported was 475 SF.
Regarding Industrial Sales, KCREA reported 38 Industrial Buildings sold in 2011 consisting of 1,635,993 SF selling for $37,115,500. The median building size was 24,960 SF while the median transaction size was $487,000. The average selling price per square foot was $22.96 and the average building size was 42,535. (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property or had invalid numbers entered.)
The largest Industrial sales transaction was a 248,400 SF Building in Louisville which sold for $7,760,000. The smallest unit sold was a 2,400 SF unit which sold for $130,000.
What this says to me -
At 127 leases and 38 sales for the year, we are seeing about 2.4 leases and 0.73 sales per week. Half of the leases are for less than 3,924 SF. When the average space leased exceeds the median by such a large margin, this screams that there are very few large transactions in the market place. The vast majority of the transactions are very small spaces. While information on the term of the leases is not provided in the KCREA stats, conversation with other brokers leads me to believe that we are continuing to have shorter term leases.
For Industrial Sales, the activity remains somewhat light. Things being sold are tending to be smaller properties at lower price points. Like the leasing, it is interesting to note that the top 5 sales transactions amounted to more than half of the total dollar volume of the reported sales.
Recommendations -
Louisville has had a fair amount of good economic news in 2011, with expansions planned at Ford and GE, among others. As these lines begin to come on-line and as suppliers and other companies also begin to expand, it looks as though things in Louisville will continue to improve.
My recommendations remain the same. Like the Office, I would say that things are looking better - number of calls and showing are up and unemployment is improving. Also, while I cannot quantify this, I am beginning to see a willingness of companies to consider longer terms in their leasing.
We continue to have a lot of inventory and downward pressure on pricing. Successful Landlords and Sellers will keep their properties in top condition and price them competitively.
Notes, Disclaimers and Such -
BTW - If you would like me to evaluate your particular property, give me a call. Also if you need any help on any real estate needs, I would love to help. I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate. I work with Buyers, Sellers, Landlords, Tenants and Investors. I handle Office, Industrial, Land, Retail and Investment properties. Heck, I can even set you up if you need help with residential property.
ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course) If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections. What you should not feel free to do though is make comments which are inappropriate or offensive. Should I see any such comments, I will delete them.
Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance). This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity. It is also dependent on the individual brokers to enter and maintain their information. As such it is subject to some error. Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.
Let me know if you have any questions or if I can be of some help. Thanks for reading. Hope you have a good day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 127 Leases for approximately 1,127,191 SF of Industrial space. The median lease space was 3924 SF while the average lease was for 41,748 SF. The largest Industrial Lease reported for 2011 was 162,000 SF while the smallest lease reported was 475 SF.
Regarding Industrial Sales, KCREA reported 38 Industrial Buildings sold in 2011 consisting of 1,635,993 SF selling for $37,115,500. The median building size was 24,960 SF while the median transaction size was $487,000. The average selling price per square foot was $22.96 and the average building size was 42,535. (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property or had invalid numbers entered.)
The largest Industrial sales transaction was a 248,400 SF Building in Louisville which sold for $7,760,000. The smallest unit sold was a 2,400 SF unit which sold for $130,000.
What this says to me -
At 127 leases and 38 sales for the year, we are seeing about 2.4 leases and 0.73 sales per week. Half of the leases are for less than 3,924 SF. When the average space leased exceeds the median by such a large margin, this screams that there are very few large transactions in the market place. The vast majority of the transactions are very small spaces. While information on the term of the leases is not provided in the KCREA stats, conversation with other brokers leads me to believe that we are continuing to have shorter term leases.
For Industrial Sales, the activity remains somewhat light. Things being sold are tending to be smaller properties at lower price points. Like the leasing, it is interesting to note that the top 5 sales transactions amounted to more than half of the total dollar volume of the reported sales.
Recommendations -
Louisville has had a fair amount of good economic news in 2011, with expansions planned at Ford and GE, among others. As these lines begin to come on-line and as suppliers and other companies also begin to expand, it looks as though things in Louisville will continue to improve.
My recommendations remain the same. Like the Office, I would say that things are looking better - number of calls and showing are up and unemployment is improving. Also, while I cannot quantify this, I am beginning to see a willingness of companies to consider longer terms in their leasing.
We continue to have a lot of inventory and downward pressure on pricing. Successful Landlords and Sellers will keep their properties in top condition and price them competitively.
Notes, Disclaimers and Such -
BTW - If you would like me to evaluate your particular property, give me a call. Also if you need any help on any real estate needs, I would love to help. I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate. I work with Buyers, Sellers, Landlords, Tenants and Investors. I handle Office, Industrial, Land, Retail and Investment properties. Heck, I can even set you up if you need help with residential property.
ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course) If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections. What you should not feel free to do though is make comments which are inappropriate or offensive. Should I see any such comments, I will delete them.
Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance). This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity. It is also dependent on the individual brokers to enter and maintain their information. As such it is subject to some error. Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.
Let me know if you have any questions or if I can be of some help. Thanks for reading. Hope you have a good day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
Tuesday, January 17, 2012
2011 Louisville Office Review
I'm continuing my review of Louisville Commercial Real Estate for 2011. Today, I am looking at the Office Market. Here is what I found -
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 141 Leases for approximately 504,846 SF of Office space. The median lease space was 1746 SF. The largest Office Lease reported for 2011 was 101,000 SF at the call center on Lakefront Place. The smallest lease reported was 150 SF.
Regarding Office Sales, KCREA reported 46 Office Buildings / Condos sold in 2011 consisting of 352,687 SF selling for $18,092,309. The median building size was 2782 SF while the median transaction size was $195,000. The average selling price per square foot was $49.47. (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property.)
The largest transaction in both size of building and dollar value was a 140,826 SF office building in the Louisville CBD. The smallest unit sold was a 1000 SF Office Condo. The smallest transaction was a 2942 SF Office building in Henry Co which sold for $31,000.
What this says to me -
At 141 leases and 46 sales for the year, we are seeing about 2.7 leases and 0.9 sales per week. It is interesting to note that 50% of the leases are for space less than 1800 SF. Also, one single lease (the call center mentioned above) comprised 20% of the leased space reported for the year.
Given the number of showings I had for companies looking for 30,000 SF and up last year, it is telling that of all of the leases reported on KCREA, there were only 2 recorded for more than 20,000 SF. That seems to validate the feeling that many of my colleagues and I shared that there was a lot of activity looking at space but not nearly as much actually going to lease. Most of the space being leased, continues to be smaller space.
For Office Sales, the activity remains somewhat light. Things being sold are tending to be smaller properties at lower price points. Like the leasing, it is interesting to note that the one 140,826 SF building sold comprised approximately 40% of the Square Footage of Office property sold.
Recommendations -
My recommendations remain the same. While I would say that things are looking better - number of calls and showing are up and unemployment is improving, I would also have to say that we continue to have a lot of inventory and downward pressure on pricing. Successful Landlords and Sellers will keep their properties in top condition and price them competitively.
Notes, Disclaimers and Such -
BTW - If you would like me to evaluate your particular property, give me a call. Also if you need any help on any real estate needs, I would love to help. I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate. I work with Buyers, Sellers, Landlords, Tenants and Investors. I handle Office, Industrial, Land, Retail and Investment properties. Heck, I can even set you up if you need help with residential property.
ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course) If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections. What you should not feel free to do though is make comments which are inappropriate or offensive. Should I see any such comments, I will delete them.
Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance). This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity. It is also dependent on the individual brokers to enter and maintain their information. As such it is subject to some error. Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.
Let me know if you have any questions or if I can be of some help. Thanks for reading. Hope you have a good day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 141 Leases for approximately 504,846 SF of Office space. The median lease space was 1746 SF. The largest Office Lease reported for 2011 was 101,000 SF at the call center on Lakefront Place. The smallest lease reported was 150 SF.
Regarding Office Sales, KCREA reported 46 Office Buildings / Condos sold in 2011 consisting of 352,687 SF selling for $18,092,309. The median building size was 2782 SF while the median transaction size was $195,000. The average selling price per square foot was $49.47. (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property.)
The largest transaction in both size of building and dollar value was a 140,826 SF office building in the Louisville CBD. The smallest unit sold was a 1000 SF Office Condo. The smallest transaction was a 2942 SF Office building in Henry Co which sold for $31,000.
What this says to me -
At 141 leases and 46 sales for the year, we are seeing about 2.7 leases and 0.9 sales per week. It is interesting to note that 50% of the leases are for space less than 1800 SF. Also, one single lease (the call center mentioned above) comprised 20% of the leased space reported for the year.
Given the number of showings I had for companies looking for 30,000 SF and up last year, it is telling that of all of the leases reported on KCREA, there were only 2 recorded for more than 20,000 SF. That seems to validate the feeling that many of my colleagues and I shared that there was a lot of activity looking at space but not nearly as much actually going to lease. Most of the space being leased, continues to be smaller space.
For Office Sales, the activity remains somewhat light. Things being sold are tending to be smaller properties at lower price points. Like the leasing, it is interesting to note that the one 140,826 SF building sold comprised approximately 40% of the Square Footage of Office property sold.
Recommendations -
My recommendations remain the same. While I would say that things are looking better - number of calls and showing are up and unemployment is improving, I would also have to say that we continue to have a lot of inventory and downward pressure on pricing. Successful Landlords and Sellers will keep their properties in top condition and price them competitively.
Notes, Disclaimers and Such -
BTW - If you would like me to evaluate your particular property, give me a call. Also if you need any help on any real estate needs, I would love to help. I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate. I work with Buyers, Sellers, Landlords, Tenants and Investors. I handle Office, Industrial, Land, Retail and Investment properties. Heck, I can even set you up if you need help with residential property.
ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course) If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections. What you should not feel free to do though is make comments which are inappropriate or offensive. Should I see any such comments, I will delete them.
Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance). This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity. It is also dependent on the individual brokers to enter and maintain their information. As such it is subject to some error. Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.
Let me know if you have any questions or if I can be of some help. Thanks for reading. Hope you have a good day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
Monday, January 16, 2012
2011 Review of Louisville Commercial Land Sales
As I begin my planning for 2012, I am taking a final look at 2011. Today, I analyzed Commercial Land Sales for last year. Here is what I found:
The Numbers
For all of 2011, KCREA recorded 30 land sales for a total of 1020.25 Acres selling at $9,811,546. The average parcel size was 34 acres and average sales price per acre was $9,683. The average transaction size was $338,329. Median parcel size was 4.86 acres and median dollar value of a transaction was $226,250.
The largest transaction in terms of dollar value and also tract size was a 410 acre parcel in New Washington, Indiana which sold for $1,300,000. The smallest transaction in terms of dollar value and tract size was a 0.06 acre tract in downtown Louisville which sold for $10,000.
This amounts to 8 transactions totaling $1,990,000 in 4th Quarter 2011 for an average transaction of $248,750.
What this means
If you are looking at the numbers alone, 2011 was another draught for Commercial Land and Development, in general. With only 30 total transactions recorded for the year, one would expect only 2.5 land sales in any given month. Looking at the average price of property sold, you would also conclude that the vast majority of the land sold was unimproved land which was not ready for development.
Development is a highly leveraged business so that when it goes well, the payoff is great but if it doesn't go well, the possibility of loss is also magnified. It is well known that many Developers went out of business in this recession and that many remain under water. The Developers remaining are far more cautious, both because of their risk aversion as well as that of their lenders. In this environment, we should expect the recovery for Land to progress slowly.
Still, as I mention in November, there are beginning to be some encouraging signs. The number of calls on land is up. And although these transactions did not go through, I had respectable offers on three separate parcels of land I have listed in the last quarter of 2011. I am also aware of some new plans for some decent sized developments that are in the works for 2012.
The things that I expect to move in 2012 are parcels that are competitively priced, already zoned properly and have infrastructure in place.
Anyway, I am looking forward to a good year in 2012. Have a great day, everyone. Thanks for reading.
Notes and Disclaimers and such -
If you know of anyone who would like help with real estate, give me a call. I am licensed in Kentucky and Indiana. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Investment and Retail properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck, I can even set you up with some help for residential property if you need it.
The Information presented here comes from KCREA (Kentucky Commercial Real Estate Alliance) data base. This information is dependent on the individual members keeping it current and accurate. It is not a census of all commercial transactions. It contains only the information of the members of KCREA and other who contribute. As such, I cannot guarantee its accuracy. Still I believe that it is a good indicator of activity and is useful to examine.Also, I am sure that my broker would appreciate me clarifying that the views represented here 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). Should you wish to comment on this post or to offer another opinion, you may feel free to do so in the comments section. What you should not feel free to do however, is to make any inappropriate or offensive comments. Should I encounter any such comments, I will exercise my right to delete them.
Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
www.ccre.biz
The Numbers
For all of 2011, KCREA recorded 30 land sales for a total of 1020.25 Acres selling at $9,811,546. The average parcel size was 34 acres and average sales price per acre was $9,683. The average transaction size was $338,329. Median parcel size was 4.86 acres and median dollar value of a transaction was $226,250.
The largest transaction in terms of dollar value and also tract size was a 410 acre parcel in New Washington, Indiana which sold for $1,300,000. The smallest transaction in terms of dollar value and tract size was a 0.06 acre tract in downtown Louisville which sold for $10,000.
This amounts to 8 transactions totaling $1,990,000 in 4th Quarter 2011 for an average transaction of $248,750.
What this means
If you are looking at the numbers alone, 2011 was another draught for Commercial Land and Development, in general. With only 30 total transactions recorded for the year, one would expect only 2.5 land sales in any given month. Looking at the average price of property sold, you would also conclude that the vast majority of the land sold was unimproved land which was not ready for development.
Development is a highly leveraged business so that when it goes well, the payoff is great but if it doesn't go well, the possibility of loss is also magnified. It is well known that many Developers went out of business in this recession and that many remain under water. The Developers remaining are far more cautious, both because of their risk aversion as well as that of their lenders. In this environment, we should expect the recovery for Land to progress slowly.
Still, as I mention in November, there are beginning to be some encouraging signs. The number of calls on land is up. And although these transactions did not go through, I had respectable offers on three separate parcels of land I have listed in the last quarter of 2011. I am also aware of some new plans for some decent sized developments that are in the works for 2012.
The things that I expect to move in 2012 are parcels that are competitively priced, already zoned properly and have infrastructure in place.
Anyway, I am looking forward to a good year in 2012. Have a great day, everyone. Thanks for reading.
Notes and Disclaimers and such -
If you know of anyone who would like help with real estate, give me a call. I am licensed in Kentucky and Indiana. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Investment and Retail properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck, I can even set you up with some help for residential property if you need it.
The Information presented here comes from KCREA (Kentucky Commercial Real Estate Alliance) data base. This information is dependent on the individual members keeping it current and accurate. It is not a census of all commercial transactions. It contains only the information of the members of KCREA and other who contribute. As such, I cannot guarantee its accuracy. Still I believe that it is a good indicator of activity and is useful to examine.Also, I am sure that my broker would appreciate me clarifying that the views represented here 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). Should you wish to comment on this post or to offer another opinion, you may feel free to do so in the comments section. What you should not feel free to do however, is to make any inappropriate or offensive comments. Should I encounter any such comments, I will exercise my right to delete them.
Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
www.ccre.biz
Sunday, January 8, 2012
Delivering Bad News
Unfortunately for the last few years, I have had to deliver a lot of bad news to property owners. With the economy in a deep recession, I have often had to tell people that there property has declined in value often as much as 40%. Sometimes, however I get a little help.
A property owner recently contacted me to ask about some property he has had leased for several years. The present lessee has struggled to pay the rent and a potential buyer of the lessee's company contacted the owner to discuss a new lease.
After reviewing the market around this property, I concluded that the market rent had declined by nearly 33% since the last lease on this property. Although he would have liked to have heard that the market rate had not declined, actually the property owner was pretty happy with the news. It turns out that the new prospective tenants had asked him to reduce the rent by 70%.
The advice for this property owner was to try to hold onto the tenant if possible but to target the new rent at the current market conditions. Since the tenant was having problems paying the rent, I suggested that part of the rent could be done as a percentage of sales. By setting a floor and a percentage of sales, the owners does share some of the risk however, the owners can expect to get near market rates and perhaps better than market rates if the store can increase its sales.
Sometimes, fate steps in and makes things a little easier.
Have a great day, all.
Notes and Disclaimers and such -
BTW - If you know of anyone needing assistance with Real Estate, have them give me a call. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Retail and Investment properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck I can even find you 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 represent the view of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course.) If you have a question or a comment on anything here, you are free to make a comment. However, you are not free to make inappropriate or offensive comments. Should I find any such comments, 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
mailto:DMcCoy@ccre.biz
www.ccre.biz
A property owner recently contacted me to ask about some property he has had leased for several years. The present lessee has struggled to pay the rent and a potential buyer of the lessee's company contacted the owner to discuss a new lease.
After reviewing the market around this property, I concluded that the market rent had declined by nearly 33% since the last lease on this property. Although he would have liked to have heard that the market rate had not declined, actually the property owner was pretty happy with the news. It turns out that the new prospective tenants had asked him to reduce the rent by 70%.
The advice for this property owner was to try to hold onto the tenant if possible but to target the new rent at the current market conditions. Since the tenant was having problems paying the rent, I suggested that part of the rent could be done as a percentage of sales. By setting a floor and a percentage of sales, the owners does share some of the risk however, the owners can expect to get near market rates and perhaps better than market rates if the store can increase its sales.
Sometimes, fate steps in and makes things a little easier.
Have a great day, all.
Notes and Disclaimers and such -
BTW - If you know of anyone needing assistance with Real Estate, have them give me a call. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Retail and Investment properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck I can even find you 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 represent the view of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course.) If you have a question or a comment on anything here, you are free to make a comment. However, you are not free to make inappropriate or offensive comments. Should I find any such comments, 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
mailto:DMcCoy@ccre.biz
www.ccre.biz
Price Reduced on Southern Indiana Car Shop
1414 Spring Street - Jeffersonville, IN
I am looking for some help finding a buyer for a property in Southern Indiana adjacent to Clark Memorial Hosptial in Jeffersonville.
This property, formerly Nationwide Auto Restoration, has approximately 7,700 square feet with nearly 4,000 additional square feet of storage in the basement. There is an office on Spring Street and an industrial shop with 3 drive in doors in the rear. It would be a great spot for a small auto shop or contractor's office and it is easily accessible from I-65. There is parking in front and in the rear.
The industrial part of the building has 16 foot ceilings and has 2 Ingersol Rand compressors running in tandem as well as air lines through out. The building has heavy power and there is a paint booth which can stay with the building.
The building was originally priced at $320,000. The owner is anxious to sell and has now lowered the asking price to $234,000.
If you know of anyone who might have an interest, give me a call.
Thanks for your help! Have a great day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
mailto:DMcCoy@ccre.biz
www.ccre.biz
I am looking for some help finding a buyer for a property in Southern Indiana adjacent to Clark Memorial Hosptial in Jeffersonville.
This property, formerly Nationwide Auto Restoration, has approximately 7,700 square feet with nearly 4,000 additional square feet of storage in the basement. There is an office on Spring Street and an industrial shop with 3 drive in doors in the rear. It would be a great spot for a small auto shop or contractor's office and it is easily accessible from I-65. There is parking in front and in the rear.
The industrial part of the building has 16 foot ceilings and has 2 Ingersol Rand compressors running in tandem as well as air lines through out. The building has heavy power and there is a paint booth which can stay with the building.
The building was originally priced at $320,000. The owner is anxious to sell and has now lowered the asking price to $234,000.
If you know of anyone who might have an interest, give me a call.
Thanks for your help! Have a great day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
mailto:DMcCoy@ccre.biz
www.ccre.biz
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