Hungary’s commercial real estate market – skinier and skinier

When the property market struggles, the marketing spin has a tendency to rise exponentially. Take this recent example about the sale of a “big format unit”:

“Cushman & Wakefield, the world’s largest privately-held commercial real estate services firm, has secured 200 sq m premium retail space for Skiny, the well-known, originally Austrian underwear retailer, at Market Central Ferihegy on behalf of the owner AIG/Lincoln.”

Er, 200 sq m? That is 0.45 per cent of the space in Market Central Ferihegy, a 44,000 sqm complex described as “one of the most successful” in Hungary.*

It has long been clear that the economic crisis has hit Hungarian commercial property badly. Just how badly is clear from the latest data.

In 2012, developers delivered just three new office buildings in Budapest, with a combined floor area of 23,000 sq m, according to the Budapest Research Forum (BRF), which compiles data supplied by Hungary’s principal real estate agencies.

As the BRF admits, that represents a 74 per cent drop on 2011, when the new build was 86,000 sq m – but compared to the good times of 2008-9, it is a tiny, one might say skiny, fraction: in 2009, the sector delivered a record 300,000 sq m of spanking new office space, says Eanna Maksay, of the agency DTZ in Budapest. That was before the boom expired

Chris Bennett, director of Europa Emerging Europe Fund and long-time regional property guru, cautions not to read too much in the plummeting figures.

“The very low volume of new build in 2012, 13 and 14 is due to the considerable overhang of space built in previous years,” he says. Yet he admits that subsequent take up has been “relatively low” and that there is a “lack of finance for almost anything.”

“Demand is, to put it mildly, muted, and mainly from existing tenants who are nearing the end of a lease and taking the opportunity to reduce costs,” he says.

A few cowboy developers, seeking fast bucks in the 1990s, were not quite as smart as they thought and have also contributed to the poor overall picture.

“It is fair to say that the overall vacancy figure for Budapest is pretty dire, but if one looks at where the vacancy actually is it is not so bad. There are some buildings in very unpopular locations, or which are very poorly specified, which make the total worse than it might be,” Bennett says.

Other factors, such as the demise of Malev, the Hungarian airline, have reduced the attractions of Budapest as a regional hub.

The good news – at least for those capable of founding or expanding businesses – is that rents remain low, though given the continuing imposition of special sectoral taxes, few new rentals will be from the banking, utilities or telecom sectors. Certainly commercial property in Hungary is performing badly on a regional comparison, Bennett says.

“Poland, in particular, is doing much better, partly because it is a much bigger economy. Capital values and the investment market generally continue strong there and are not too bad in Czech, either, [but] there is no market to speak of in Hungary.” And with the economy in recession, Bennett, one of those rare real estate professionals who publicly warned of the central European property bubble long before it burst, says he sees little hope of any quick turnaround in the industry.

“I see no reason why this should change, at least before the next election. And even after that the office market will quite probably remain difficult.”

* Beyondbrics did ask Cushman & Wakefield, the exclusive retail leasing agent of Market Central Ferihegy, for the current occupancy rate of the retail park, but received no reply by publication time.

For the original post visit: http://blogs.ft.com/beyond-brics/2013/01/21/hungarys-commercial-real-estate-market-skinier-and-skinier/#axzz2IgRgFUMK

Recovery of commerical real estate in Colorado Springs remains elusive

COLORADO SPRINGS —Colorado Springs' housing market rebounded in 2012, but the same can't be said for commercial real estate.

Vacancy rates remained historically high late last year for Springs-area commercial buildings, while rents fell, according to a fourth-quarter report by Paul Turner of Turner Commercial Research in Colorado Springs. The report suggests the commercial market has far to go before it recovers from the area's economic downturn.

The combined vacancy rate for local offices, shopping centers and industrial buildings was 11.9 percent in the fourth quarter, up slightly from 11.6 percent a yearearlier, Turner's report shows.

For much of the last 15 years, the combined vacancy rate typically was in single digits. After the economy slumped in 2007, the rate climbed into double digits and has been there ever since — reaching as high as 12.9 percent in 2009.

Meanwhile, the combined average asking rent for commercial properties fell to $9.57 per square foot in the fourth quarter, down 1.5 percent from the same period a year earlier, Turner's report showed. Four years earlier, the average asking rent was nearly $11 per square foot.

"It's not gotten too much worse," Turner said of the latest quarter.

For the original post visit: http://www.denverpost.com/breakingnews/ci_22392934/recovery-commerical-real-estate-colorado-springs-remains-elusive

Commercial real estate agents hope slow but steady growth continues

Commercial real estate specialists in the region will be satisfied if this year’s slow and steady growth in the sector continues as expected into 2013.

That’s the forecast for next year nationwide as well, with the National Association of Realtors predicting modest declines in vacancy rates for office, industrial and retail properties.

Commercial agents reported third-quarter improvement in the mainland Atlantic County market and the sale of some large properties.

The quarter began with the sale of a 30,000-square-foot mixed use/fitness facility at 3330 Fire Road in Egg Harbor Township, with Levin Commercial Real Estate in Atlantic City handling the sale.

Joshua Levin said the investment purchase for $2.65 million involved no change in the businesses leasing space in the facility.

A 90,000-square-foot warehouse/industrial building at 206 W. Parkway in EHT was purchased by Jersey Construction, said Richard Baehrle, of Prudential Fox & Roach in Northfield. The building was owned by Caesars Atlantic City.

Baehrle said this year was good, with settlements done or pending on 280,000 square feet of transactions, with most office or retail.

He said medical uses have driven demand in the office market, which is now starting to outstrip supply.

“There is a misconception that there is an overabundance of office supply,” he said. Hopes for the new year are still pinned to a substantial rebound in the casino industry and the NextGen Aviation Research and Technology Park in Egg Harbor Township finally seeing construction, he said.

“I remain cautiously optimistic that the upward market trend will continue in 2013,” Baehrle said.

Samantha Zerafa Roessler and Frank Sortino, of ForeSite Commercial Realty in Northfield, said they’ve seen slow, steady growth in the office market this year.

“This market is in its second consecutive year of absorption, which is good,” Zerafa Roessler said.

ForeSite’s analysis of the primary office market on the Atlantic County mainland shows a decline in vacancy rates from nearly 13 percent in the fourth quarter of 2011 to about 11 percent in this quarter.

The analysis of four municipalities with more than 300,000 square feet of office space each — including Linwood, Northfield, Egg Harbor Township and Galloway Township — found 206,434 square feet available in the fourth quarter out of total office space of 1.8 million square feet.

In the current quarter, she said, ForeSite has leased properties on New Road and Zion Road in Northfield. Earlier this year, office properties on Central Avenue in Linwood and Chris Gaup Road in Galloway Township were fully leased.

Zerafa Roessler said the highway retail segment has also seen some activity. “We’ve got three properties under contract on the White Horse Pike.”

The office vacancy rate of 11 percent in the core local market is significantly lower than the nearly 17 percent rate reported by the National Association of Realtors nationally.

With the anticipated slow growth in the economy and gradual rise in demand for commercial space, the organization expects office vacancies to remain above 15 percent through next year and into 2014.

Major East Coast markets tracked by the Realtors have office vacancy rates even lower than Atlantic County, with New York and Washington, D.C., at 10 percent. Office property owners are expected to realize a 2 percent increase in rents this year and a bit more next year.

Industrial vacancies are expected to decline only slightly from their current 10 percent rate, and retail vacancies are forecast to hardly ease from their 11 percent rate nationally, the Realtors said.

A 2 percent increase in rents for industrial space and a 1 percent rise for retail locations is expected for the coming year.

As has been true since the housing bubble collapse and foreclosure crisis, apartment rentals remain the strongest commercial division, with a vacancy rate of a mere 4 percent this year continuing in 2013.

That’s a level considered a landlord’s market, and average multifamily housing rents are expected to increase 4 percent this year and nearly 5 percent next year. Contact Kevin Post:

609-272-7250

KPost@pressofac.com

For the original post visit: http://www.pressofatlanticcity.com/business/real_estate/commercial-real-estate-agents-hope-slow-but-steady-growth-continues/article_a376df1c-55f1-11e2-9ba1-0019bb2963f4.html

Matt was commercial real estate pioneer

In the world of commercial real estate, Janet Barry Matt was a rarity.

Matt, of Hartland, who died Monday at the age of 82, was among the first female commercial real estate brokers in the Milwaukee area, and was the first woman in Wisconsin to become a member of the Society of Industrial and Office Realtors.

Matt was only the second woman in the nation to gain membership in the group, said her nephew, James T. Barry III, president of Cassidy Turley Barry, a Milwaukee commercial real estate brokerage.

"Janet was a pioneer in the world of commercial and residential real estate, a true professional and a mentor to many in the Wisconsin real estate community," Barry said.

Matt became a real estate broker in 1965, and in 1977 joined James T. Barry Co., the forerunner to Cassidy Turley Barry. That firm, which focuses on industrial and office sales and leases, was founded in 1921 by her father, James T. Barry, and was then operated by her brother, James T. Barry Jr.

At Barry Co., Matt was involved in numerous high-profile real estate transactions, including the sale of 200 acres to Rockwell Corp.; the sale of 27 acres to Kohl's Corp. for its first Menomonee Falls headquarters; and the sale of a 33,000-square-foot building in Milwaukee to Johnson Controls Inc.

After leaving Barry Co. in 1990, she and her two sons started Matt & Associates, a real estate brokerage in western Waukesha County. That firm's transactions included the sale of 26 acres Highways 16 and 83, in Delafield, for a new Pick 'n Save supermarket.

Source: http://www.jsonline.com/business/matt-was-commercial-real-estate-pioneer-6m6k4hn-167392425.html

BMO sees strength in commercial real estate through 2013

TORONTO -- BMO Economics says the commercial real estate market -- which has been characterized by cautious growth since a severe market downturn in the 1990s -- will become a draw for investors into next year, thanks to a strong real estate market and low interest rates.

Earl Sweet, senior economist and managing director at BMO Capital Markets, said vacancy rates in the commercial real estate sector are lower than historical norms in many Canadian cities.

"The commercial real estate industry benefits from the healthy condition of Canada's financial institutions, the participation of large, well-funded operators and institutional investors, whose long-term objectives reduce volatility during downturns," Sweet said in a report.

"Higher occupancy -- spurred by steady growth in employment, manufacturing, wholesaling, and retailing -- is reducing office, industrial, and retail vacancies, while lease rates are edging upward."

But the market is likely to grow at a more tempered pace this year and next, noted Sweet, as Canada's economic growth slows to two per cent.

The eurozone crisis and slowing momentum in the U.S. are also expected to dampen investors' appetites in the short term, he said.

In Toronto, a healthy financial services sector, stable consumer and business confidence and an increase in manufacturing helped the commercial real estate sector recover last year.

In Montreal, softer employment in the business and professional services industry helped push vacancies up to 9.2 per cent during the first quarter of 2012, from 8.2 per cent at the end of 2011.

But BMO predicts that recovery in the professional services industry, continued growth in financial services and limited space should stabilize the market.

In Vancouver, the lack of supply has kept commercial property prices high. That, along with low bond yields and volatile stock markets, is driving more investors toward commercial real estate.

Toronto-based real estate owner Brookfield Canada Office Properties (TSX:BOX.UN) says it has seen stability across all of the markets it operates in, especially Toronto, Calgary, Ottawa and Vancouver.

The company, which reported second-quarter earnings on Monday that nearly tripled compared to the same year-earlier period, says it expects that rental rates in downtown Toronto will continue to steadily increase.

"The outlook for future demand of office space remains positive," said Jan Sucharda, president and CEO, during a conference call on Tuesday.

"While uncertainties resulting from the European debt crisis and slowing global economies could impact the future direction of the Toronto market, today we haven't seen any fallout."

The company says its Calgary portfolio is 100 per cent occupied, thanks to a strong oil sector that has created demand for office space there.

The real estate owner is boosting its annual dividend by eight per cent as it reports earnings of $134.4 million, or $1.44 per unit, nearly tripling the $47.5 million, or 51 cents per unit it earned in the same quarter a year-earlier.

The latest quarterly results included a $100-million fair value gain, reflecting a change in the value of its buildings, compared to a gain of $15 million in the same period of 2011.

Source: http://www.ctvnews.ca/business/bmo-sees-strength-in-commercial-real-estate-through-2013-1.891142

Megadeals Mark Commercial Real Estate Market in H1

Buyers continue to show eagerness to snap up fancy offices, hotels and malls in Russia, and though commercial real estate investment won't reach last year's historic high, it could surpass $6 billion, analysts say.

Snapping up fancy offices, hotels and malls is continuing apace in the domestic market, and though commercial real estate investment won't reach last year's historic high, it could surpass $6 billion, analysts say.

This year's level of investment, which is measured in purchases of buildings by other real estate players, is already more than $2 billion, according to various estimates.

Jones Lang LaSalle puts the amount for the first half of 2012 at $2.4 billion, while fellow real estate consultancy Knight Frank Russia & CIS said the deals closed in the first six months equal $3 billion.

Including the $1.1 billion sale of St. Petersburg's Galeria shopping complex — a deal that was supposed to close in January, Bloomberg reported at the time — Cushman & Wakefield gives the first-half figure as $4.18 billion.

This year's big transactions include Russian real estate investor O1 Properties' purchase of Ducat Place III, the Class A office tower at 6 Ulitsa Gasheka, from U.S. developer Hines for about $370 million, said Tom Devonshire-Griffin, head of capital markets for Jones Lang LaSalle Russia and CIS.

Immofinanz Group bought a 50 percent stake in Zolotoi Vavilon, or Golden Babylon, a 450-store shopping center in Moscow, for more than $500 million, according to information from Cushman and Knight Frank.

Also among the deals is Bin Group's purchase of the Summit office complex on Tverskaya Ulitsa and other properties for about $980 million, according to Jones Lang LaSalle.

Despite the hefty figures, deal volume so far this year has been substantially lower — perhaps by nearly half — compared with the volume in the first six months of 2011.

Investment transactions tapered off in the first quarter because of European debt malaise, a respite after year-end deal-making, and a wait-and-see attitude among Russian buyers because of the March presidential election.

International investors weren't deterred, Devonshire-Griffin said, because "they want to see stability." Barring a change in government or tax policies, they take the approach that politics "is what it is" here, he said.

Views differed on the liquidity needed for major investments.

"We do have the availability of finance, which is key to Russian deals," Devonshire-Griffin said, given that they are typically huge transactions that require the parties to seek out loans.

Russia's VTB, Sberbank and Alfa Bank are the most active lenders, he said. Foreign institutions Raiffeisen, UniCredit and Aareal Bank are also engaged in the market.

Alexei Filimonov, general director of real estate adviser Astera, called project financing "more like mythology than reality." He did point to Sberbank and VTB as relatively active lenders.

Compared with last year's $7.5 billion in overall investment, excluding the Galeria deal, this year's haul is expected to be about $5 billion, said Olga Yasko, regional director for analysis and market research at Knight Frank Russia and CIS.

Somewhat higher is the 2012 estimate from Jones Lang LaSalle, which is $6.5 billion.

"We will get very close to last year's volume," said Alexander Zinkovsky, a senior research analyst at Cushman. The firm expects investment volume to be $7 billion.

"There is demand, and there is supply," Zinkovsky said.

He said investors are seeking Class A and Class B offices, Class A warehouse space with modern technologies and shopping centers with a mall concept and interior design.

Many analysts said Europe's debt crisis has weighed down the market.

"The significant factor in investment is the general economic situation in both Russia and in the world at large," Yasko said. "Further development [of the market] will depend greatly on the resolution of the European Union situation."

Source: http://www.themoscowtimes.com/business/article/megadeals-mark-commercial-real-estate-market-in-h1/461871.html

Crombie Real Estate shows rise in revenue

Stellarton-based Crombie Real Estate Investment Trust reported an increase in first-quarter revenues Thursday.

Crombie said they generated $59.4 million in property revenue for the first quarter ending March 31, up $3.4 million or 5.6 per cent over the same period in 2011.

Same-asset cash net operating income for the quarter increased by $0.3 million or one per cent to $33.2 million, compared to $32.9 million for the first quarter last year.

Funds from operations was $0.26 per unit compared to $0.28 per unit for the same period in 2011 and adjusted funds from operations was $0.22 per unit compared to $0.23 per unit last year.

The company is 47 per cent-owned by Sobey-controlled Empire Co. Ltd., and invests in income-producing retail, office and mixed-use properties.

They currently own a portfolio of 161 commercial properties in nine provinces, comprising about 13.5-million square feet of rentable space.

“The acquisition of 22 retail properties from Goldmanco for approximately $255 million in April added approximately 850,000 square feet of primarily grocery and drug store freestanding and anchored properties in Ontario and Western Canada. It is the largest acquisition from third parties in the REIT’s history,” said Donald E. Clow, company president and CEO, in a statement.

“We expected 2012 would be a challenging year for some Canadian retailers and this has proven to be correct. Crombie is focused on creating value to improve our portfolio from these opportunities and we have solid momentum in our re-leasing and redevelopment efforts.”

Crombie shares on the Toronto Stock Exchange closed at $14.49, up slightly from the previous close.

Source: http://thechronicleherald.ca/business/95058-crombie-real-estate-shows-rise-in-revenue

Real Estate competition heats up

If you think the perfect way to kick off summer is with a move to Manhattan, you might want to reconsider your plans.

For apartment hunters looking for a new place in the city, this spring and summer are set to be one of the biggest real estate rat races in recent memory, according to experts. Coming off an unusually mild winter that saw a higher flurry of activity than usual, rental prices have skyrocketed. They were 6.5% higher in February than the year before, according to real estate firm MNS. So now the warmer months - the real estate market's busiest time of the year - will have fewer apartments up for grabs and more renters fighting over slim pickings.

Now or never

Lauren Weitz thought that she had the perfect moving plan. Coming from Oceanside, Long Island, she would take the first few months of this year to look around and see what's out there. By April, she would have seen plenty of places and picked the best one, and by May, she'd be ready for a summer move to the city.

So her head was spinning when she was suddenly forced to whittle down what she expected to be a months long process into two weeks. She put down a deposit on a West 98th Street pad that she viewed that same day and made the move in the middle of March - two months sooner than she expected. It wasn't necessarily because this place was her dream home and she was sold the second she saw it. It was because if she had waited until May like she planned, the competition for apartments in Manhattan would be so fierce that her chances of scoring a place at all could have been dashed.

As her broker told her: In this market, it's either now or never.

A tight squeeze

Realty firm Citi Habitats projects that a total of only 2,230 new apartments will hit the Manhattan market in 2012 - the lowest figure since the company began tracking it in 2005. In a city of 8.2 million, that serves less than 0.1% of the population.

A report by StreetEasy.com out this week showed that asking prices for new apartments for sale in the city rose 12.4% this past year to an average of $1.46 million. The demand for housing is at a fever pitch. Meanwhile, inventory in the buying market dropped nearly 8%, according to the StreetEasy report.

When Weitz was looking earlier this year, she felt the pinch.

"One [apartment] I liked was gone before I even had a chance to see it," said Weitz, 31. "I thought I would have a couple leisurely months to look around." "Those days are pretty much gone," said Gary Malin, president of Citi Habitats. Vacancy rates in the city are the lowest they've been in years - less than 1%, he noted. "An apartment literally could be gone while you're [viewing the listing online]," Malin said. "The market moves so fast."

Be prepared

One thing he said renters should do if they're dying for a Manhattan home is adjust their expectations. If they can be flexible on what they're willing to pay or when they're willing to move in, it will widen their options.

Morgan Turkewitz, an agent at Citi Habitats who helped Weitz score her Upper West Side pad, has seen cases where clients come to apartment viewings at 11 a.m., and when they call at 2 p.m., the apartment has already been scooped up.

"The scary thing is it gets even tighter over the summer," Turkewitz said. So she tells her clients to come prepared with the paperwork ready to sign a lease on the spot if they find an apartment they like. "The one thing they can control is the paperwork."

Source: http://www.amny.com/urbanite-1.812039/real-estate-competition-heats-up-1.3669198 "You can't wait on the market," she added. "It's New York - thousands of people are looking for apartments."

Commercial Mortgages: Capital is flowing into real estate

Bono probably wasn't thinking about the rebirth of commercial real estate when he sang "After the flood all the colors came out" in U2's "Beautiful Day," but the song evokes the budding optimism that can be felt in the industry today.

After four tough years of battles with lenders, tenants and investors, commercial real estate developers seem poised to move beyond their recent past and look toward the future.

What is the reason for this outlook? In a word: capital.

Capital is the life blood of real estate. When it's flowing, the industry blossoms, and when it's not, the industry shrivels.

For the better part of four years, capital has been receding from real estate (and other assets); now it is flowing back in.

Bill Gross, the famed head of PIMCO, the world's largest bond investor, recently released an investment outlook that is a bit scary for investors because Gross predicts that real growth will be severely limited by excessive fiscal deficits and high debt-to-gross domestic product levels.

The good news: Investment real estate, in his view, is one asset class that has the potential to deliver the most return with the least amount of risk. The caveat is that the assets shouldn't be "burdened by excessive debt and subject to future haircuts."

Of course, savvy investors have already come to the same conclusion and have been running to so-called "fortress" commercial real estate for several years.

That is, they have been investing in the top buildings in the top markets and using low leverage in their purchases. The thinking is that as inflation kicks in, rents will go up and you will have good returns that are a hedge against inflation.

The only problem with the thinking is that when everyone is trying to buy the best building in the best cities in the country, it is hard to get a price that creates attractive returns.

No matter how attractive a building, every building has a price that is unattractive. That is why investors are now looking beyond "fortress" real estate and exploring secondary markets.

For instance, February sales volume fell year-over-year in Boston, Los Angeles, San Francisco and Washington, but rose in Chicago, Detroit and Seattle, according to research from CoStar Group, a Washington-based real estate information provider.

While one month is hardly a trend, it shows an expected progression in the recovery and has industry participants in smaller cities feeling more upbeat.

A huge help in this trend of capital turning to secondary markets is the availability of debt.

With commercial mortgage-backed security lenders more active and extending their success of the past few months, more money is flowing to a wider range of real estate.

Pricing for five- and 10-year mortgages is now in the 4 to 4.85 percent range, respectively, for solid non-recourse mortgages from life insurance companies and Wall Street conduits (commercial mortgage-backed security lenders), according to the John B. Levy & Co. National Mortgage survey.

Lower leverage deals are priced lower and smaller loans financed with community banks are priced higher.

Rates on commercial mortgages are higher this month than they were last month primarily because yields on U.S. Treasuries have increased significantly. This has occurred because investors have a little more faith in the economy and are willing to look elsewhere for higher returns.

The same is occurring in commercial real estate.

Investors are moving away from "fortress" real estate and into secondary markets to get better returns.

Richmond should be a direct beneficiary in this movement and has already benefited from an increase in debt capital availability.

The question is how long will prices remain attractive while debt remains cheap? As Bono would say, "It's a beautiful day, don't let it get away."

Source: http://www2.timesdispatch.com/business/2012/apr/09/tdmbiz06-commercial-mortgages-capital-is-flowing-i-ar-1827844/

Foreign real estate investors silently prepare for a new landing in Vietnam

VietNamNet Bridge – The foreign direct investment (FDI) capital flow into the real estate sector has been slowing down recently. However, experts believe that this is just a necessary period of rest before the foreign investors prepare for a new landing in Vietnam.

Analysts have predicted a new wave of FDI capital flow into the real estate sector which would be seen in the next few months. They say that the Vietnamese real estate sector now shows all favorable conditions for foreign investors to earn money.

A lot of real estate projects have been delayed due to the lack of capital, caused by the tightened monetary policies. Therefore, the developers of the projects are trying to transfer the projects, which is really a golden opportunity for foreign investors to buy back the projects at low prices.

Meanwhile, in the first two months of the year, Vietnam received only one FDI project in the real estate sector with the registered capital of 100,000 dollars – a modest sum. The figure represents a sharp fall from the FDI capital in the golden age of 2008, when the registered FDI capital in the sector reached 23 billion dollars.

Phan Huu Thang, Director of the Foreign Investment Research Institute, a unit of the Hanoi National University, has noted that the lack of capital for project implementation has been badly affecting not only domestic, but foreign investors in Vietnam as well.

“The worsening real estate market has forced foreign investors to interrupt the investment or lengthen the implementation period, while waiting for their opportunities,” Thang said.

The decline in the FDI capital flow into the real estate sector has been attributed to the fact that foreign investors have to deal with their own problems caused by the global economic crisis. The investors do not have enough money to implement a lot of projects at the same time.

Besides, as the Vietnamese real estate market is facing many problems, including the low liquidity, few transactions and the credit tightening policy, foreign investors need a time of rest to think about what they should do in the next steps. Meanwhile, the oversupply has been warned for the high end apartments and resorts – the market segment in which foreign investors have advantages.

However, analysts believe that foreign investors do not intend to abandon the plan to invest in Vietnam. They are still waiting for the opportunities to penetrate the market which they believe have great potentials.

The US Las Vegas Sands has expressed its willing to pour billions of dollars to the resorts in Hanoi and HCM City. Most recently, Thai Trinity Company has opened a 30 million dollar fund which would disburse for the low cost investment projects in Vietnam.

Oliver Smith, Investment Director of Trinity, has noted that the opportunities are awaiting foreign investors at this moment, when the market is quiet and many investment funds plan to quit the market.

He said that a lot of investment funds, which are holding big volumes of properties, now want to sell the assets when they are about to close the funds as scheduled.

Marc Townsend, General Director of CBRE Vietnam, also thinks that the FDI capital flow into the real estate sector would increase rapidly in the time to come, because 2012 is believed to be the end to the recession period.

One of the signals showing that the FDI capital would return is that the real estate market recently has witnessed a series of the merger and acquisition deals.

CBRE has predicted that the FDI capital into the real estate sector in 2012 would be triple that of 2011, with the presence of 20 foreign investors.

Source: TBKTSG

Real estate's top end doing it tough

Update If you thought selling your ordinary home in an average suburb last year was hard, spare a thought (or not) for your wealthy neighbour.

Economic woes in 2011 hammered million-dollar-plus suburbs across Australia, cutting the number of suburbs in that top-tier price range by about one in seven, or 14 per cent.

Australia's most costly suburbsSydney's top 10 suburbsMelbourne's top 10 suburbs

Property analysts RP Data recorded 225 suburbs with median property values in excess of $1 million in 2010. By the end of 2011, after a year of falling property prices, that figure had shrunk to 194.

Last year, seven of the top 10 most expensive suburbs in Australia (Point Piper, Tamarama and Bellevue Hill among them) were in Sydney, only two were in Melbourne (Deepdene and Toorak) and one was in mining boomtown Perth (Dalkeith).

A significant factor affecting super-expensive suburbs last year was a drop in the number of luxury homes sold - pushing them off the list of the nation's priciest.

Some suburbs like Peppermint Grove in Perth that normally feature on any million-plus list, dropped off because they recorded fewer than 10 sales in the year.

Squeezed out

Low sale numbers can also affect the reliability of median results because of extreme highs or lows at either end of the price bracket.

In Melbourne, Alphington, St Kilda East and South Melbourne were squeezed out of the million-dollar suburb bracket last year, according to RP Data.

Sydney’s Dawes Point and Chiswick also dropped off.

Point Piper recorded a median house price of $5.21 million from just 14 sales, Tamarama's $4,337,500 median was from similar volumes and Deepdene’s $2,495,000 median result was from just 15 sales.

The paucity of sales may explain why the tiny enclave of Deepdene knocked Melbourne's blue-blood Toorak off its most expensive suburb perch for the first time.

Real estate sale volumes across Australia last year were at their lowest levels since 1996, RP Data analyst Cameron Kusher said.

Over a ten-year period, the number of suburbs with a median house or unit price of $1 million or more increased from 43 nationally to a peak of 225 neighbourhoods in 2010.

Last year's decline was only the second time in a decade that the number of million-dollar suburbs fell.

In 2008, during the depths of the global financial crisis, the tally of rich suburbs eased back by just three - underscoring how much the market came off the boil last year.

A widely-known combination of factors including sliding prices, debt-shy households and a slowing jobs market were behind last year’s decline.

‘‘It’s concentrated more in top-tier suburbs because since the financial crisis people aren’t getting the same sort of bonuses in the banking and finance sector as they used to before 2008,’’ Mr Kusher said.

‘‘All the stats we have show the top end is much weaker than other areas of the market,’’ he said.

Source: http://www.wellingtontimes.com.au/news/national/national/general/real-estates-top-end-doing-it-tough/2491065.aspx?storypage=0

Survey: Commercial real estate outlook brightens

Real estate executives at last Friday’s Akerman U.S. Real Estate Summit in Miami are more optimistic about the commercial real estate market than in the recent past. In a survey of participants, 82 percent of respondents expressed greater confidence and an improved outlook for the industry, a 6 percent increase over last year, with 50 percent citing the improving U.S. economy as the primary driver for their optimism.

There was broad consensus among survey respondents that the multifamily sector would be the most active in terms of the number of real estate transactions, foreign investment and return to pre-recession development levels in 2012, the organizers said.

“The outlook for the commercial real estate industry in 2012 is bright, but the recent recovery is still tenuous, and could be dampened by a range of factors, including the continued uncertainty in Europe, persistent restraints on debt and equity financing and the threats to the health of the U.S. economy due to rising energy costs,” said Richard Bezold, chaiman of the Akerman National Real Estate Practice Group.

Respondents cited the policies of the current administration (38 percent) and global economic uncertainty (30 percent) as reasons for a lack of confidence in the industry’s outlook for 2012.

Most respondents (43 percent) cited availability of credit as the most pressing issue facing the real estate industry right now. However, that number is down 10 percent from 2011. The belief that uncertainty of government policy is the number one concern for the industry has doubled to 25 percent this year.

The survey included the responses of 150 senior executives.

Nancy Dahlberg

Source: http://www.miamiherald.com/2012/03/15/2696192/survey-commercial-real-estate.html

Real Estate Prices Deal A Double Blow To Small Businesses

Randy Truckenbrodt has just as many headaches as he does properties. The co-owner of Randall Industries, an Elmhurst, Ill.-based company that rents and sells construction equipment, has spent more than 20 years acquiring personal, investment and business real estate, including a home in Indian Head Park, Ill., an investment property in New Buffalo, Mich., two small farms in Lockport, Ill., and three business properties in Florida.

This growing empire has become not an asset but a drag on his business as many of these properties are now underwater, with some vacant and others tied up in major disputes with banks. Like many small-business owners, Truckenbrodt has used his properties to leverage his business, and since his assets have lost value, he's unable to rent them out to raise money for his business. "What affects me personally affects the company," Truckenbrodt said.

In recent years his company's employee count has dropped from 195 to about 115. The proceeds from his Florida business property rentals have declined from $15 million in revenue four years ago to $3.5 million.

Entrepreneurs like Truckenbrodt who own small businesses and real estate may be suffering from a one-two punch following the Great Recession, with declines in both their companies' income and their real estate's value. Many of these small-business owners might experience financial difficulty until the real estate market recovers.

And this involves a large majority of entrepreneurs. About 92 percent of small-business owners own some form of real estate, according to a study last month by the National Federation of Independent Business. About 89 percent of small-business owners own a home, while more than 20 percent own their place of business and 35 percent own investment properties, according to William J. Dennis, a senior research fellow at the federation and author of the report.

"What [entrepreneurs] have frequently done in the past is either mortgaged the proceeds and put that back into the business or collateralized it for business purposes," Dennis said. "When the housing market fell apart ... they took a huge nosedive. They lose an enormous amount of value, which means not only can't they borrow on it, but there's also a wealth effect, in that you tend not to spend when you don't think you have anything to back it up."

Truckenbrodt is feeling the pain. "Instead of investing in my business, I'm doing everything I can to pay debts down," he said. "I used to leverage [these properties] for business, and now I'm just trying to get out of the grasp of these banks."

Their grip has tightened as Truckenbrodt has tried to get a new mortgage on his home and keep up with his existing property loans through the recession. Though he previously owned his home outright, he wanted to take out a new mortgage but was turned down as a result of his company's losses.

"They almost do a strip search to get a loan approved on a mortgage," Truckenbrodt said. "It's unbelievable the information they're asking when you think just a few short years ago, people were walking in off the streets with virtually no verification of employment. It's gone totally in the other direction."

And the decline in real estate value and demand pose a huge burden. Truckenbrodt's commercial buildings were assessed at half the amount he bought them for four years ago. "We have an empty building," he said. "There are empty buildings everywhere."

Perhaps the most frustrating situation Truckenbrodt has encountered was when a bank wanted to charge him $85,000 in fees for a fairly standard loan covenant waiver and, when he balked, said it would raise the interest rate to 13 percent on his $5.5 million loan instead.

Though the bank eventually backed down, Truckenbrodt claims that being a business owner who meets his financial obligations in a punishing real estate market is a challenge. "The banks are coming in and whacking anyone who can pay their bills. If you can show any hint of staying power, they're going to come after you, raise your rates, try to hit you with penalties," he said.

"Banks have seen a lot of pressure from the regulators to address underperforming or underwater loans," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a trade association representing 100 of the largest financial services firms. That pressure from regulators is part of the reason why banks are toughening their standards, he said.

"The reality is real estate, whether it's your home -- or the land on which your business is built -- has declined, and this decrease in assets makes it harder to get access to credit," Talbott said. "Financial services firms are working harder to help homeowners and business owners deal with the decrease in real estate, primarily through loan modifications."

When it comes to helping small businesses recover fully, politicians and bankers need to look at broader economic issues raised by the recession, said Dennis of the National Federation of Independent Business. "This is all tied together, and any single-minded approach really misses the point."

Source: http://www.huffingtonpost.com/2012/03/13/real-estate-prices-small-businesses-_n_1291867.html

Poly Real Estate home sales up 46% in Feb

BEIJING -- Poly Real Estate Group, China's second largest property developer by market value, said on March 11 that its home sales rose 46.29 percent year-on-year to 3.62 billion yuan ($574.6 million) in February.

Transaction area surged 69.53 percent from one year earlier to 377,900 square meters last month, the developer said in a statement filed to the Shanghai Stock Exchange.

However, weighed down by the government's tightening measures, the group's home sales still slid 30.73 percent year-on-year during the first two months of 2012, while sold floor space slumped 29.84 percent.

The government has imposed a raft of measures since 2010 to curb the excessive growth in home prices, including higher down payments, higher loan rates, a ban on third-home purchases, property-tax trials and the construction of low-income housing.

Prices have seen slower growth as a result of the cooling efforts. In January, home prices in 70 major Chinese cities monitored by the National Bureau of Statistics all saw prices stabilize.

Premier Wen Jiabao said last week that China will continue to regulate the real estate market to bring property prices to a reasonable level.

In a separate statement, the developer said it obtained two plots of land in Xi'an, the capital city of North China's Shaanxi province, last month at a cost of 631 million yuan.

Source: http://www.chinadaily.com.cn/bizchina/2012-03/12/content_14812117.htm

Hackensack Real Estate Group Gives Back on the Red Carpet

On Thursday, February 23rd Alexander Anderson Real Estate Group hosted its first annual Red Carpet Open House Event to benefit the Joseph M. Sanzari Children’s Hospital at Hackensack University Medical Center.

With pending homes sales at a 2 year high (according to the National Association of Realtors) Eric Anderson and Corrado Belgiovine owners of Alexander Anderson Real Estate Group decided to celebrate the recovering economy by giving back to the Hackensack community. This fundraiser is unique – Alexander Anderson – newly headquartered in Hackensack – is donating a 10% of all profits from both residential and commercial real estate listings they receive in March, April and May to the Joseph M. Sanzari Children’s Hospital at Hackensack University Medical Center. The Red Carpet Open House Event was the kickoff to this very special 3 month long fundraiser.

“We are seeing a spike in both buyer and seller confidence. And we want the success of our industry to contribute to the success of our overall community. So this spring we are celebrating the recovery of the real estate market by sharing the good fortune with the Joseph M. Sanzari Children’s Hospital.” Said Eric Anderson, CEO of Alexander Anderson as he joined Hackensack Mayor Jorge E. Meneses for the ceremonial ribbon cutting of their new headquarters at 14 Bergen Street.

The most distinguished names in Bergen County gathered at the new Alexander Anderson headquarterd in the historical Salvation Army building. In attendance were over 200 Bergen County political and business notables including: Hackensack Mayor Jorge E. Meneses, Hackensack City Council – John. P. Labrosse, Marlin G. Townes, Karen K. Sasso, Teaneck Mayor Mohammed Hameeduddin, Freeholder Candidate Tracy Zur, City Attorney Joseph Zisa, City Manager Steve Lolacono, Chamber of Commerce Members Darlene Damstrom, Donald Pearlman & Corethia Oates, Chairman Lou Stellato of the Democratic Committee of Bergen County and other local notables – Frank Pratt of Sanzari Enterprises, Dan & Laura Kirsch, and Albert Dib, Executive Director of the Upper Main Alliance.

Guests dined on authentic Greek fare provided by Greek Island Grill owner Gina Tarkazikis and had the red carpet treatment with “paparazzi” pictures taken by Sameh Abdallah owner of Bright Lights Studios. Event logistics were donated by Noelle Frieson of Prosperiti Partners.

Source: http://www.rew-online.com/2012/03/07/hackensack-real-estate-group-gives-back-on-the-red-carpet/

Are Sellers Softening Up?

With the start of the home buying season just around the corner, years of low prices and dashed hopes for the long awaited housing recovery may be changing the way sellers price and prep their properties.

More than half (51 percent) of 600 agents in a recent Coldwell Banker survey reported that sellers are more willing to price their homes competitively than this time last year and 45 percent said sellers are more willing to change the appearance of their homes to entice buyers than they were one year ago.

"Within the past year, sellers were more willing to price their homes competitively and took my advice to make their home inviting and appealing to a broad cross-section of potential buyers." said Jessica Edwards, Coldwell Banker Real Estate Consumer Specialist.

Last year, by contrast, many sellers refused to budge on their prices. One reason was the high percentage, some 22 percent of home owners with a mortgage, who owe more thantheir home is currently worth are not in a position to negotiate. Also, some sellers were willing to wait in hopes of getting a higher price.

A survey last November by Move, Inc. found that time is running out on homeowners delaying selling their home because of low prices. The survey found that the number of homeowners who delayed (17.5 percent) has not grown during this time of protracted low prices but has actually declined slightly since March 2010, suggesting the pending supply of homes is showing signs of stabilizing.

The Move survey found that more homeowners ages 35 to 49 (22 percent) and those making $40,000-49,000 a year (21 percent) compared to other respondents said they've delayed selling their home in the past year. This may indicate growing families in need of more space may be having a difficult time moving up as the result of today's market conditions.

After years of low prices, more than half of all homeowners (52.2 percent) said they would be motivated to place their homes on the market by price increases in their neighborhoods. A 5 percent increase in home prices would motivate 11.7 percent owners to sell their homes. Price increases of 15 percent or less would motivate more than one quarter (26.6 percent) to put their homes on the market. Only 44.6 percent of owners said that they would not sell their home even if prices rose over 20 percent in their neighborhood.

A factor currently working in sellers' favor is a dramatically lower number of homes for sale, which may change with spring time. The national for-sale inventory dropped by 6.59 percent in January, the eighth consecutive month of decline. The total number of listings on Realtor.com is now 23.20 percent below the levels observed in January 2011.

Source: http://www.upi.com/Business_News/Real-Estate/2012/02/21/Are-Sellers-Softening-Up/2131329852981/

Delta: Commercial real estate forecast is cloudy

The implications of federal austerity for the region’s commercial real estate market already are being felt, with modest absorption of office space in 2011 as tenants’ decision-makers wait for more information. Some further deterioration in rents is likely in 2012, although superior properties in strong neighborhoods are likely to buck this trend.

Business uncertainty holds back the local economy

Even at the local level, companies are uncertain about future conditions, and that uncertainty has caused economic growth to slow in the Washington area. At the end of every year Delta Associates surveys regional “market makers,” asking them about expected business conditions over the next 12 months.

Consumers and businesses, nationally and locally, are still feeling pessimistic. Our survey at the end of 2011 showed uncertainty rising and confidence falling when respondents were asked about the next 12 months. Confidence reached a nadir of 5 percent in 2008, (meaning only 5 percent expected conditions to improve the following year), according to Delta’s Business Confidence Index. The confidence index is again declining, although the level remains well above the trough experienced during the Great Recession.

With the Dodd-Frank Wall Street Reform Act, the carried interest tax provision for investors, Fannie Mae and Freddie Mac and the Affordable Care Act all up in the air, it is no wonder uncertainty prevails. We expect consumers to remain cautious in spending and many businesses to refrain from leasing decisions and hiring commitments through 2012.

investors have found strong returns

Investors in Washington commercial real estate found strong returns in 2011, but little of this was driven by significant leaps in asset performance, and that improvement is not likely to be repeated in 2012 given the economic uncertainty and the fact that prices have already been driven up for core assets.

Instead, leasing of office, industrial and retail space will have to pick up for commercial real estate indicators to match their 2011 performances. Washington also experienced a slowdown in sales volume during the 2nd half of 2011 when office volume totaled $3.3 billion on 47 transactions (excluding portfolio transactions) during the 1st half of 2011, but only $2.4 billion on 39 transactions during the 2nd half of the year.

In sum, 2011 offered some great opportunities for investors but also some cautionary signs and the local growth cycle will likely be weaker than the region is accustomed to.

Christopher Dubberly is an associate at Delta Associates. Staff at Delta Associates contributed to this article. For more information, please visit www.deltaassociates.com.

Source: http://www.washingtonpost.com/business/capitalbusiness/delta-commercial-real-estate-forecast-is-cloudy/2012/02/13/gIQA1RT1NR_story.html

Residential real estate market endures dismal 2011

It seems 2011 was the year for sitting — or perhaps cowering — in your house, not buying a new one.

Lawrence home sales declined by 14.7 percent in 2011 from the previous year, and sales of newly constructed homes plummeted by nearly 45 percent for the year, according to recently released figures from the Lawrence Board of Realtors.

“It is still the economy, and in particular people lost some confidence in the economy and Congress,” said Gary Nuzum, a senior vice president with McGrew Real Estate in Lawrence. “Everything that went on during the year just put people in a do-nothing mode.”

The new numbers also created questions about whether the market is poised to turn around. Sales in December 2011 were down 24.7 percent compared to December 2010 totals. The local numbers are in contrast to national reports. The National Association of Realtors reported that December sales of existing homes were up 3.6 percent compared to December 2010.

Realtors said the local real estate market did deteriorate considerably in the second half of the year.

“The fall was definitely slower than we were anticipating,” said Oliver Minnis, president of the Lawrence Board of Realtors and an agent with Stephens Real Estate. “As slow as the fall was, it is positive that we had the totals that we did. There wasn’t any real sense of urgency with buyers last year, and that feeds on itself.”

In terms of totals, the report found:

• Nearly 200 fewer homes were sold in the Lawrence area than in 2010. Home sales totaled 1,058 for the year, down from 1,240 in 2010 — or a decline of 14.7 percent. The numbers also are down from 2009 totals, when 1,253 sales were recorded.

• Sales of newly built homes continued to reach new lows in 2011. Only 64 newly built homes were sold in 2011, down from 115 in 2010 — or a decline of 44.3 percent.

• The year ended on a sourer note than 2010. At this time last year, real estate agents had reason for optimism. Home sales in 2010 were down just 1 percent from 2009 totals. And sales of newly built homes had shown signs of life, increasing by nearly 20 percent from 2009 totals.

• Lower home sales have not resulted in lower selling prices. The average selling price for 2011 was $185,095, up 2.6 percent from 2010’s mark of $180,339. The median sales price has held steady at $158,000. This data, though, runs counter to what the Douglas County Appraiser’s office is seeing through its sales data. The appraiser is predicting a general decline in appraised values. His office currently is setting those tax values, and change of value notices will be mailed in March.

• It is taking longer to sell a home. The average days on market rose to 94 in 2011, up from 81 in 2010. The median days on market rose to 60, up from 44.

Added all up, the numbers suggest a local real estate industry that is in full weather-the-storm mode.

“The last couple of years have been downturn years, no doubt,” said Bryan Hedges, president of Realty Executives Hedges Real Estate. “You just have to live through them. As far as last year, we’re just trying to forget.”

Real estate agents with several different firms, though, said there are signs of 2012 getting off to a better start. Unseasonably warm weather has helped bring out more potential buyers.

“For some home buyers, spring is already here,” Minnis said. “It seems like the general mood is more optimistic than it has been for a few years. I don’t think we’re going to set any records for 2012, but I think it is going to be better.”

Source: http://www2.ljworld.com/news/2012/jan/30/residential-real-estate-market-endures-dismal-2011/

Property boom causes blind buy

WOULD you buy a house without looking inside?

A buyer snapped up this South Mackay home last week without inspecting it, determined not to be beaten to the deal by seven other interested parties.

It's behaviour Vision Real Estate Mackay principal Eric Rickman hasn't seen since the last property boom.

"I listed it a week ago and it sold prior to inspection," he said.

"They put a contract on it without viewing inside.

"That doesn't happen very often but... in the past boom in the mid-2000s that did happen."

Mackay property owners pocketed massive profits in the last boom, with the median house price jumping 184%, from $128,000 to $363,000, between 2001 and 2006. Median prices have remained more stable during the last five years, rising 10.2% to $400,000.

Vision Real Estate Mackay director Darren Symons says prices are on the rise again now, driven by rapidly rising rental costs, which are prompting many to buy their own homes.

"There's so many new people coming to town the prices of the houses are going up now," Mr Symons said.

"I don't think there'll be a spike (to the extent of that during the last boom) but with the present mining boom going on we're certainly going to see an increase in property prices.

"Days on the market have reduced drastically.

"The average time on the market is 10 weeks (but) you're probably seeing about half that at the moment: four or five weeks, provided it's priced realistically.

"Everything up to about $600,000 is selling well."

Mr Symons said the rental market was doing even better than in boom one, with high returns luring investors back.

"The rental market is incredible at the moment.

"It has already surpassed boom one.

"The investor market is coming back for the first time in a considerable time."

Recent interest rate cuts had also spurred many home buyers into action, Mr Rickman said.

"November and December were two of our best months," he said.

PRICE RISES

Mackay median prices

2001: $128,000

2006: $363,000

2011: $400,000

Moranbah prices

2001: $53,000

2006: $357,500

2011: $618,000

Dysart median prices

2001: $30,000

2006: $317,500

2011: $485,000

Rockhampton prices

2001: $102,000

2011: $317,250

Townsville prices

2001: $130,000

2011: $363,500

Source: http://www.dailymercury.com.au/story/2012/01/30/property-boom-causes-blind-buy-house-mackay/

Fairfield County commercial real estate improves, slowly and unevenly

Cushman & Wakefield, a commercial real estate firm, Tuesday released its year-end 2011 report for the Fairfield County commercial real estate market, indicating that the market is continuing in its slow but uneven recovery.

From the overall market fundamentals in 2011, Cushman & Wakefield reports:

• The potential for a double-dip recession seems to have passed;

• For the first time in three years, companies in Fairfield County are expanding;

• The vacancy level is persistently high, but is expected to slowly improve;

• Historically low interest rates have helped even poorly performing buildings continue to operate;

• The opportunity for tenants to trade lease term for rental concessions continues to expand;

• The difference in rental rates between the highest quality space and average space is growing, with pricing power going to the best-quality buildings in the marketplace.

Fairfield County's Class-A overall vacancy rate continued its upward trend, ending the year at 20.4%. This is the highest reported vacancy rate since 2002 and 63% higher than the healthy overall vacancy rate of 12.5% in 2007.

Despite the fact that Fairfield County vacancy rates seemed to have peaked in the fourth quarter, the Class-A direct average asking rental rates grew from $34.81 per square feet (psf) at year-end 2010 to the current $35.84 psf.

This increase was partially attributed to a $5.60 psf jump in Class-A direct average asking rent in the Stamford Non-CBD from $31.95 psf last year to $37.55 psf this year.

The submarket with the highest Class-A direct average asking rental rate continues to be Greenwich, registering at $54.37 psf, albeit a 28.8% drop from the $76.33 psf achieved in 2007.

Fairfield County leasing activity in 2011 for Class-A and -B combined was 2.4 million square feet (msf), 17.2% below 2010's leasing activity of 2.9 msf, but still significantly higher than the 2009 and 2008 activity of 1.8 msf and 2.1 msf, respectively.

There were six leases larger than 100,000 sf signed in 2011, compared to three in 2009 and only two in 2008.

The largest office lease of the year was Bridgewater Associates' 227,998-sf lease at 20 Westport Road (Wilton Woods Corporate Campus) in Wilton.

The largest renewal of the fourth quarter was Unilever's 108,819-sf renewal at 55 Merritt Boulevard in Trumbull.

Also completed this year was Chelsea Pier's 418,000-sf lease (376,300 sf of warehouse space and 41,700 sf of office space) and NBC Sports' 264,626-sf lease (172,566 sf of studio space and 92,060 sf of office space) at 1 Blachley Road in Stamford; Sikorsky Aircraft's 166,994-sf sublease at 1 Far Mill Crossing in Shelton; and Ryan Partnership's 104,054-sf renewal at 50 Danbury Road in Wilton. Cushman & Wakefield played a brokerage role in every transaction except the Ryan Partnership renewal.

Companies begin to expand

For the first time since mid 2008, Fairfield County companies expanded this year, which added to the improvement in leasing activity. After losing 3.6 msf (Class-A and -B) of occupied space to downsized tenants over the last three years, companies including FactSet Research Systems, GE, WR Berkley, NBC Sports, Bridgewater Associates, Sikorsky and Spinewave all expanded at one or more of their locations this year.

"Although we've seen company growth in Fairfield County in 2011, we're still only in the preliminary stages of a full market recovery," said Jim Fagan, senior managing director and market leader of Cushman & Wakefield's Fairfield and Westchester County regions. "Compared with 2009, the market is much healthier, but 2011 has certainly been a year of extreme fluctuations with vacancy levels and unemployment remaining stubbornly high. We're confident that we're well on our way to a full comeback, but there's still a long road to travel."

Overall absorption for Class-A space in Fairfield County during the fourth quarter totaled negative 29,683 sf, a dramatic decrease from last quarter's positive 119,097 sf and 4Q-10's positive 29,390 sf.

The Stamford CBD's overall vacancy rate reached 26.2% in the fourth quarter, an increase from 3Q-11's 25.8% and 4Q-10's 22.4%. This 3.8 percentage point increase from year-end 2010 to year-end 2011 is attributable to the addition of Legg Mason's 82,000 sf of sublease space at First Stamford Place; 45,906 sf of sublease space from UBS at One Stamford Forum; 23,800sf of sublease space from Statoil at 1055 Washington Boulevard; 13,043 sf of sublease space from Parexel at 750 East Main Street; 11,500 sf of sublease space from NetPerception at 1 Landmark Square; and 10,650 sf of direct space at 177 Broad Street. The Stamford CBD also has the largest contiguous availability in the county — 614,119 sf at 695 East Main Street.

Stamford's Non-CBD year-end 2011 Class-A overall vacancy rate was 26.6%, an 11.3% increase from last year's 23.9%, but an 8.3% decrease from 3Q-11's 29.0%. The Stamford Non-CBD's Class-A direct vacancy topped at 25.5% at year-end 2011 due to the 360,000 sf of vacant space added to the market by Time Warner at 290 Harbor Drive and by General Electric at 3001-3003 Summer Street.

The Greenwich Class-A overall vacancy rate has remained steady ending the year at 19.5%, in line with last year's 19.8%. Direct Class-A vacancy is at 16.3%, indicating that there's a substantial amount of sublease space on the market.

"There continues to be real opportunities in the market for tenants to either upgrade their facilities or to lower their overall occupancy costs even if the lease does not expire for several years," added Mr. Fagan. "The window for completing such tenant-favorable transactions, however, will be closing quickly as the economy improves."

Investment sales

The investment sales market also improved in 2011, with nine significant transactions (20,000 sf and above) in Fairfield County as compared with six sales in 2010 and only three in 2009. The most significant sale this quarter was 695 East Main Street in Stamford, vacant since 2009, which was sold by Lehman Holdings to Building & Land Technology in a Cushman & Wakefield arranged transaction for $30.3 million.

"With today's exceptionally low interest rates, we anticipate a much more active 2012 for the investment sales market," said Mr. Fagan. "In fact, we expect investment sales to make a much larger contribution to the overall health of the marketplace in the coming year."

Cushman & Wakefield is the world's largest privately held commercial real estate services firm. Founded in 1917, it has 235 offices in 60 countries and more than 14,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction services, including tenant and landlord representation in office, industrial and retail real estate; capital markets, including property sales, investment management, investment banking, debt and equity financing; corporate occupier & investor services, including integrated real estate strategies for large corporations and property owners; consulting services, including business and real estate consulting; and valuation & advisory, including appraisals, highest-and-best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at cushmanwakefield.com.

Source: http://www.acorn-online.com/joomla15/theridgefieldpress/news/localnews/112250-fairfield-county-commercial-real-estate-improves-slowly-and-unevenly.html