NAR'S Outlook on CRE Positive but Moderating

The National Association of Realtors® (NAR) quarterly commercial real estate forecast was released today, which reflects continued improvements in the commercial real estate markets, though at a slower pace. Lawrence Yun, NAR chief economist, said NAR's latest Commercial Real Estate Outlook shows that fundamentals are still on an uptrend. "Growth in commercial real estate sectors continues at a moderate pace from a very slow pace of absorption, despite job additions to the economy. Companies appear hesitant to add new space," he said. Highlights from the office market follow:

Vacancy rates in the office sector should decline from an expected 15.8% in the first quarter of this year to 15.6% in the first quarter of 2015.

The markets with the lowest office vacancy rates presently (in the first quarter) are New York City, with a vacancy rate of 9.5%; Washington, D.C., at 10.2%; Little Rock, Ark., 11.6%; Birmingham, Ala., 12.7%; and San Francisco and Nashville, Tenn., at 12.8% each.

Office rents are projected to increase 2.3% in 2014 and 3.2% next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 44.6 million square feet this year and 50.0 million in 2015.

For more news and information visit Blumberg Capital Partners.

NAR's ePropertyData Sold to Xceligent

Second Century Ventures (SCV), the strategic investment arm of the National Association of Realtors (NAR), announced this week that it had sold ePropertyData to Xceligent for an undisclosed amount. With 240,000 members and growing, ePropertyData provides commercial real estate information in markets across the country and powers NAR's current national public commercial real estate search platform, which already contains more than 200,000 active lease and sales listings. Xceligent will leverage ePropertyData's commercial information exchange solution to help expand its existing coverage of fully researched commercial real estate information into the largest U.S. markets.

Doug Curry, CEO of Xceligent, said "We are pleased SCV chose Xceligent as the home for this great asset as we continue to build a strong national alternative for commercial real estate information. Combining these two extraordinary teams creates a strong foundation for the expansion of our product development team and allows us to deliver best of breed technology and information to the industry."

Allen Benson, Founder and CIO of ePropertyData, said, "Our development capabilities are the perfect match to Xceligent's research capabilities and industry presence."

For more news and information visit Blumberg Capital Partners.

NAR Says CRE Vacancy Rates Improving, Rents Firming

The National Association of Realtors (NAR) released its quarterly commercial real estate forecast this month indicating that all of the major commercial real estate sectors are seeing improved fundamentals. Lawrence Yun, NAR chief economist, commented on the Commercial Real Estate Market Survey saying vacancy rates are improving in all of the major commercial real estate sectors. "Sustained job creation is benefiting commercial real estate sectors by increasing demand for space," he said. "Vacancy rates are steadily falling. Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest."

An excerpt from the office markets summary:

Vacancy rates in the office sector are projected to fall from 16.4% in the current quarter to 16.0% in the first quarter of 2013.

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5%; New York City, at 10.0%; and New Orleans, 12.4%.

After rising 1.6% in 2011, office rents should increase another 1.9% this year and 2.4% in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year.

NAR has made the Commercial Real Estate Market Survey available here. For more news and information, visit Blumberg Capital Partners.

NAR Expects CRE Market to Improve in Year Ahead

The National Association of Realtors held its Economic Issues and Commercial Real Estate Business Trends Forum at the 2011 Realtors© Conference & Expo this month exploring the conditions in real estate and particularly the commercial real estate industry in tandem with the nation's economic recovery. Chief Economist Lawrence Yun shared his predictions for the commercial real estate market in 2012 and 2013, anticipating a steady improvement in commercial real estate markets. Yun was joined by Kenneth Riggs, president and chairman of Real Estate Research Corporation (RERC) and chief real estate economist of the CCIM Institute, and Robert White, founder and president of Real Capital Analytics, who shared his outlook for slight improvements in commercial real estate markets in the year ahead.

"I anticipate a small recovery in the next year in home values, which would help small business owners; however, that's only if legislators and regulations don't add obstacles to hinder the housing market recovery, such as modifying or eliminating the mortgage interest deduction or increasing down payment requirements," said Yun. He predicted moderate improvements in commercial real estate markets and the broad economy because job growth and other economic factors are slowly improving. He said that despite the stock market's volatility, it is performing higher than it was in 2008, making it easier for companies to raise capital and for consumers to gain wealth. Yun doesn't anticipate a second economic recession in the near term, because of the strong cash potential that businesses could release into economy, which would help the country avoid a second recession. He said that international trade is expanding and that international home buyers are taking advantage of the weaker dollar and investing in commercial and residential real estate.

For more news and information visit Blumberg Capital Partners.

NAR Sees Modest Improvement in CRE Market

The National Association of Realtors (NAR) has released its latest observations on the conditions of the real estate markets, the Commercial Real Estate Outlook, and noted that commercial real estate vacancy rates are flat with moderate projections for growth and modest improvements expected over the coming year. NAR forecasts vacancies to decline 0.3 percentage point in the office sector, 0.6 point in industrial real estate, 0.7 point in the retail sector and 0.9 percentage point in the multifamily rental market.

"Disappointing economic growth in recent months means a slower recovery for most of the commercial real estate sectors, although multifamily housing continues to benefit from pent-up demand resulting from an abnormal slowdown in household formation in recent years," said Lawrence Yun, NAR chief economist. "Many young people, who normally would have struck out on their own from 2008 to 2010, had been doubling up with roommates or moving back into their parents' homes. However, they've been entering the rental market as new households in stronger numbers this year. As a result, apartment vacancy rates are declining and rents are rising at faster rates."

Particular to the office market, NAR observed:

- Vacancy rates in the office sector are forecast to fall from 16.6% in the third quarter of this year to 16.3% in the third quarter of 2012.

- The markets with the lowest office vacancy rates currently are Washington, D.C., with a vacancy rate of 8.6%; New York City, at 10.1%; and Long Island, N.Y., 13.0%.

- Office rents are expected to rise 0.8% in 2011 and another 1.5% next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be 28.3 million square feet this year.

For more news and information visit Blumberg Capital Partners.

NAR Says Vacancy Rates to Decline, Rent Recovery Delayed

The National Association of Realtors has released its latest Commercial Real Estate Outlook with projects for the real estate markets and indicates that there's a stabilizing trend underway in the commercial real estate markets. From the first quarter of 2011 to the first quarter of 2012 NAR expects that the vacancy rates will decline 0.5% in the office sector, and that office rents are forecast to fall 1.8% this year "before turning higher by 4% in 2012." Lawrence Yun, NAR chief economist, suggested that a pullback in construction is helping to stabilize the market. "Very limited construction of new commercial real estate over the past few years has essentially fixed the supply of available space," he said. "This means vacancy rates could fall quickly from any increase in demand for commercial space."

A summary of the Office Markets outlook:

• Vacancy rates in the office sector are forecast to decline from 16.5% in the first quarter of this year to 16% in the first quarter of 2012.
• The markets with the lowest office vacancy rates currently are New York City and Honolulu, with vacancies in the 8-9% range.
• In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, should be 14.5 million square feet in 2011.

For more news and information visit Blumberg Capital Partners.

NAR Says Commercial Sector to Improve in 2011

The National Associaton of Realtors posted a new video this week with a commercial real estate update for January 2011. Jed Smith, Managing Director, Quantitative Research, and George Ratiu, Research Economist, discussed metrics from NAR's latest Quarterly Commercial Real Estate Market Survey. The survey is a new quarterly project measuring activity in the commercial real estate markets and collects data from commercial Realtors with the aim of providing members with an overview of the market performance, sales and rental transactions, current economic challenges and future expectations.
Survey hilights include:

• Sales volume was virtually unchanged in the third quarter compared with a year ago.
• Sales prices declined 13% in the third quarter on a year-over-year basis.
• Leasing activity advanced 4% from the previous quarter.
• Rental rates declined 7% compared with the previous quarter.
• Concession levels moved up 7% on a quarterly basis.
• Financing continues to top the list of most pressing current challenges, followed by the national economy.
• The estimated average transaction value rose 27% from the previous quarter, to $1.4 million.

Smith and Ratiu reflect on the survey's findings that even though right now, with high vacancies and low rents, the market remains difficult, there are signs of recovery in the market in the coming year and even more room for significant improvement in 2012. Click here to watch the video.
For more news and information visit Blumberg Capital Partners.

NAR Expects Steady Improvement in Commercial Market

The National Association of Realtors (NAR) held their 2010 Conference & Expo in New Orleans this month, coined "NARdiGras 2010: A Fountain of Inspiration" with 125 education sessions and insights from business leaders. NAR's Chief Economist Lawrence Yun and Hugh Kelly, clinical professor of real estate at New York University Schack Institute of Real Estate, shared their predictions surrounding the commercial market and indicated a slight improvement in commercial lending.

"Banks' profits have returned to healthy levels. As a result, it is inevitable they will return to the business they were created for, which is lending," said Yun. "Commercial real estate has experienced a sharp price correction, but there is still a shortage of buyers because of lack of adequate capital resources." Yun said with imports and exports in the U.S. rising, the demand for industrial space will improve. His commercial forecast shows steady improvement in the market with rents stabilizing and net absorption slowly improving. Yun also predicts a moderate GDP expansion of 2 percent to 2.5 percent in the next two years and an unemployment rate of eight percent in 2012 and six percent in 2015.

Kelly pointed out that most commercial mortgages have been random and idiosyncratic, stressing that the lending environment should not remain that way. "The banks are in the driver's seat, meaning they can cherry-pick deals and there is no stigma to turning away business," said Kelly. "The capital flow in the commercial real estate market has been very selective. To achieve full recovery, lending practices must improve."

For more news and information visit Blumberg Capital Partners.

Blumberg Capital Partners in the News

Blumberg Capital Partners was featured in an Arabian Business article titled "Gulf capital turns to US real estate, lured by distressed sales". An excerpt:

Arab investors that have historically favoured UK real estate are now looking to America, lured by tax cuts and low property prices, said Philip Blumberg, chairman of US-based investment management company Blumberg Capital Partners.

Property acquired by Middle East and African investors increased 140 percent between 2008/09 and 2009/10 from $1.1bn to $2.64bn, data from the National Association of Realtors showed.

"US tax policies are about tax cuts not tax increases so the US is emerging as a safe standard compared to Western Europe," Blumberg told Arabian Business.

To read the full article, click here.