Commercial Real Estate Recovery… are we there yet?

As a commercial real estate broker and small business owner I get a lot of questions about my thoughts on the state of the commercial real estate market, both  locally and  nationally.  The most common question centers on how long the bottoming is going to last, and are we even there yet?  My answer has turned upbeat in recent weeks as the positive news keeps coming in about the economy.  Not that I wasn’t always optimistic but the answers  were somewhat “structured” based on whether I was talking to a seller/landlord or a buyer/tenant.  Of course, there is still considerable pain and suffering for many owners, especially if they purchased in the height of the market.  So for them, my answers implied that we are at least a few years from experiencing “favorable” conditions that would resemble any kind of “old normal” that they might be accustomed to.  On the other hand, for  commercial real estate buyers or retail or office tenants we would encourage them to grab the best deal they can, as fast as they can, because the commercial real estate market has presented, what may easily be a generational opportunity for buying or leasing.

Overall I think the real answer to where we are in the commercial real estate cycle has a lot to do with the old buzzwords LOCATION, LOCATION, LOCATION.  Whether it be the a major or secondary market , a prime corner versus something second tier, a trophy building or a class C asset  the economic influences are going to determine to a degree at what stage of the recovery we are in.  Those areas hit the hardest, it would seem, will take the longest to recover but the quality of the asset will play a major role in how that particular property holds up regardless. 

If I use my market, Ft.Myers, Naples Florida, which is sitting at 13% unemployment one could make a case for us being in the doldrums for an extended period of time, however, the market is quite active and what a great location.  The market is still in a quandary due to oversupply but velocity of absorption is increasing and some of the new construction that has been empty for three plus years is starting to get some movement.  On another note, there are national markets that didn’t get hit as hard and they are recovering nicely based on many  industry  reports.  After all, we have been in this mess for over 3 years already, so one would like to believe that the economic indicators are beginning to tell the real story.

Here are a couple of bullet points that got my attention.

• Interest rates still at generational lows
• Unemployment finally moved lower to 9.4%
• Retail sales for December up 5.5%
• 17  consecutive quarters of increased manufacturing
• Bush tax cuts extended and include a payroll tax cut
• Positive discussion coming on deficit reduction and spending cuts
• Potential restructuring of  Obamacare  
• Very positive  corporate earnings reports
• Banks are softening on credit and money is available to lend  
• Wall Street is back to positive momentum and restoring people’s wealth
• There is no shortage of money chasing commercial real deals

If you follow the trends one can certainly make a case  that we have passed the point of complete collapse and are in a positive uptrend.  Yes, we still have considerable issues to contend with but many signs are pointing north.  I would say we have passed bottom and are well on our way to recovery in the commercial real estate market.

About Boback Commercial Group

Boback Commercial Group, a full service, commercial real estate company, located in Fort Myers, FL, has over 30 years of professional real estate experience. The company offers services and advice for real estate owners, users and investors, related to Florida commercial property sales and leasing, Florida commercial property and association management, investment properties, asset management, and distressed or foreclosed property workouts for banks. Boback Commercial Group serves the southwest Florida area with a primary focus on commercial real estate in Fort Myers, Cape Coral, Naples, Port Charlotte and the surrounding communities. Please visit our Website at BobackCommercialGroup.com or contact us by telephone at 239-466-7770.

Commmercial Real Estate : Up, Down or Sideways

The incoming data on the state of the commercial real estate market is about as definitive as a “leading economist’s” predictions about the US economy. Depending on who you believe, it could be up,down or sideways. Of course, many of the observations are local to markets being reported , which has a lot to do with the conclusions drawn, but if you are someone looking for a clear direction, as a whole, it’s hard to make a case for anything absolute.

Let me cite a few examples.

In my own backyard, Fort Myers/Naples, Florida, I recently saw a report noting that for the first time in a couple of years we had achieved positive absorption in 3Q in a few commercial real estate  market segments, namely office and industrial products. Next, I read an International Council of Shopping Centers (ICSC) newsletter that touts larger retail operators,(Target,Kohl’s and JC Penny) are “on the offense” and have plans for numerous new store openings next year. An additional ICSC brief notes a Barclay’s economist predicting  that retail is going to lead the recovery and it’s going to be brisk. Further, a CoStar piece dictates that the industrial market has turned positive. Of course, all  this is good stuff ,however, let us not forget all real estate is local in nature. 

 So what are we to believe? Is the commercial real estate market up,down or sideways.  Obviously some of the “experts”  cited previously are pretty profound in their assessments. Personally, my “boots on the ground” observations, in the Fort Myers /Naples FL commercial real estate market, tell me it’s a little bit of all three,especially when you add in the “local” factor.  There are signs of life,treading water and despair.  And from where I’m sitting it appears it will be  as such  for some time longer.

About Boback Commercial Group

Boback Commercial Group, a full service, commercial real estate company, located in Fort Myers, FL, has over 30 years of professional real estate experience. The company offers services and advice for real estate owners, users and investors, related to Florida commercial property sales and leasing, Florida commercial property and association management, investment properties, asset management, and distressed or foreclosed property workouts for banks. Boback Commercial Group serves the southwest Florida area with a primary focus on commercial real estate in Fort Myers, Cape Coral, Naples, Port Charlotte and the surrounding communities. Please visit our Website at BobackCommercialGroup.com or contact us by telephone at 239-466-7770.

Commercial Retail Tenant Market …. Dead or Alive?

The retail leasing world is a mixed bag of tricks based on personal observations. Is it dead or alive? I asked myself this question recently after some traveling around Florida subsequent to Boback Commercial Group’s attendance at the International Council of Shopping Centers(ICSC) Orlando show.We exhibited  at the  show and had a chance to interact with a number of retailers, developers and tenant reps looking for space.The general consensus from our group of attendees was positive but quite guarded when it came to opportunities for a rapid return to prosperity,especially in the Fort Myers/Naples markets.It seemed very evident that those retailers expanding were highly focused on more major markets in the state.There was ,however, a good buzz about plans for 2012.A number of retailers were starting to plan for a comeback in that period.

As mentioned earlier, I did some looking around on recent trips to Orlando, near  University of Central Florida , International Drive by Wet n Wild and in Kissimmee, as well as  the Boca Raton area. My objective was to get a real feel for what was happening in these locations when it came to retail vacancy.Needless to say I was  quite surprised by the number of vacancies in the Orlando areas I visited.Kissimmee was even more challenged.The Boca Raton seemed to be holding up far better.Of course,their were holes in a number of buildings but not to the extent I witnessed in the Orlando area,primarily in the tourist corridors. I guess I expected it to be better off than the Fort Myers /Naples FL markets based on what I had been hearing at ICSC conferences the last few years regarding retailers concentrating on major markets. 

One thing I know for sure…. retail may not be dead but it has a long way to go before it’s really alive.

How can we help you with your sales, leasing or property management needs?

Fort Myers – Naples , Florida Commercial Real Estate NOT DISTRESSED , NOT INTERESTED.

 The old adage about real estate… LOCATION,LOCATION,LOCATION  seems to have taken a backseat to the new buzzwords in the  Fort Myers – Naples commercial real estate market. Today it’s DISTRESSED, FORECLOSED , BANK OWNED   that appear to be the new barometer for measuring the best options. Not that location is no longer important, but as a qualifier, if a property doesn’t fit the aforementioned  categories it most often won’t make the short list regardless. In essence, NOT DISTRESSED, NOT INTERESTED.

Let’s make one thing perfectly clear, there is no shortage of buyers in the market. On the other side, there is certainly no shortage of supply either.The common denominator is , however, price. The Fort Myers – Naples, Florida  commercial real estate market has become so price sensitive that potential buyers use the distressed category as the initial search parameter. Not necessarily a bad thing if you are a bank with real estate owned(REO) but certainly not a good thing if you are Joe ,the average seller. And the funny thing is that Joe could very well have a very good opportunity for someone as well.

Let’s face it, everyone wants a good deal.The problem is we now have gone to the opposite extreme in finding what is perceived as  the best opportunity.Maybe the new buzzwords should be PICKY,PICKY,PICKY. 

Bottom line….if you are a buyer in this market don’t be so shortsighted and limit your choices to just the distressed properties.There are some deals out there that might be just as attractive from a seller who bought right in the first place.

Remember you make money in real estate when you buy, not when you sell.

Boback Commercial Group is a full service commercial real estate brokerage specializing  in commercial real estate in  Naples Florida,Fort Myers Florida  and surrounding communities.The company offers sales, leasing and  commercial property management services.Contact us at 239-466-7770 or at www.bobackcommercialgroup.com.

Time to buy Naples & Fort Myers , FL Commercial Real Estate

As the saying goes ….you make money in real estate when you buy not when you sell.Well now is the time in Naples/Ft.Myers  for acquiring outstanding  commercial real estate properties for use or investment.Prices are incredibly low and the supply is plentiful.Everyday I am amazed by the opportunities that come available for  commercial real estate.

 By most comparisons the  prices for commercial property,whether it be, investment property,office space for personal use or retail space for your business,  are about 50% less than a few short years ago. And there are many examples where properties have traded for 70-80% below those levels.The most astonishing fact beyond the price is the properties themselves. We’re talking TROPHY properties in premium locations! This applies to commercial properties for sale or lease.

If you are in the market for  Naples/Ft.Myers  commercial  real estate or in any of the surrounding communities, you are in luck.

 Timing is everything.  

Boback Commercial Group is a full service commercial real estate brokerage specializing  in commercial real estate in  Naples FL,Ft.Myers FL  and surrounding communities.The company offers sales ,leasing and property management services.Contact us at 239-466-7770 or at www.bobackcommercialgroup.com.