Archive for the ‘Real Estate’ Category

Recently the government has been taking steps to boost the economy, and breathe some life into businesses. Many things they choose to spend money are not necessarily quantifiable, however the Home Run Grant just may be-

According to James Wood, the Executive Director of the Bureau of Economic and Business Research at the University of Utah, in 2009 the Home Run Grant:

• 3,645 home buyers received financial assistance of between $4-6,000 people.
• 19,508 jobs were saved or created that were construction related
• The value of homes sold was $830.9 million
• Earnings created was $659.8 million.

Although the Home Run Grant time line has been extended once, it is not anticipated to be extended again. So if you are a first time home buyer, many economists suggest that a few years from now, anyone who had a chance to buy in 2010 and didn’t will definitely regret it.

It is said by many economists that the housing market is what got the economy into this mess, and the housing market will get us out of it.

Commercial real estate across the nation, and commercial real estate in St. George Utah, are typically 12-18 months behind the trends that residential markets set. So when the residential market begins its recovery, commercial investors will come out of the wood works and start to realize the deals that will be available for them.

St. George, Utah is ranked the highest in the state in regards to foreclosures per capita.

According to RealtyTrac, one in 28 homeowners will receive a filing in St. George. The national average is one in 84. Unfortunately, 4 of Utah’s Cities are ranked in the top 60 metropolitan areas with the highest foreclosures rate in the nation.

Provo- Orem was ranked 31st nationally, seeing one filing for every 45 households.

Salt Lake City was 58th on the list, recording one filing for every 74 households.

Ogden-Clearfield ranked 59th having one in 74.

Town & Country Bank is set to open their new location beginning January 2010. Town & Country Bank offers a free pick up service, allowing you to make your deposits from the comfort of your office chair. They are currently located out in front of the Summit Athletic Club, and are excited to open their new branch at 405 E St. George Blvd.

Their new office building will replace the former Jolley’s Ranchwear building, which replaced the old Sizzler. Isn’t it great that in St. George that we describe a new businesses’ location by who the tenant was 10 years ago?!?

For more information on the happenings in St. George Commercial Real Estate, contact Brandon Vandermyde at 435-627-5735.

Successful Leasing Strategies in a Volatile Market

This International Council of Shopping Centers (ICSC) held a webinar his past week called “Successful Leasing Strategies in a Volatile Market” which consisted of a panel of industry experts who gave their professional opinion on the most effective leasing strategies in the current market situations.

Hessman Nadji opened up the session with an overview of the driving economic forces in today’s market, and addressed his predictions on the future recovery, Nadji stated “There is plenty of positive evidence that suggests the worst is over in what is now being called the “Great Recession,” but stated that there are still plenty of obstacles before us.

“We’ve seen the steepest job loss since the great depression, but now that loss has moderated, showing the end is near. We anticipate the job loss cycle will hit bottom by the end of 2009 and the economy should be poised for recovery in 2010”,Nadji said.

CoSatar reports that retail sales where better last month than expected, Nadji warned the retail industry to still be ready for the worst case scenario because a recovery will be “muted and difficult” and consumers will still face issues with debt and lack of jobs.

Traditionally in past recessions, consumers home-buying confidence will increase as the Feds decrease the interest rates, decreasing the duration of the recession. The affects on consumers during this recession have been much deeper than what we have experienced in the past, and the recovery is taking much longer than most economists predicted.

“The effect of store closures on retail vacancies has been incredibly sharp because retail was the only sector in which construction actually went up during 2001-2003 because there was so much consumer stimulation going,” Nadji said. CoStar expects that vacancy rates (which are extremely high) will continue to rise well in to 2010.

What Should Landlord’s Do?

Marty Mayer, president of Convington, an LA-based Stirling Properties, said “keeping existing tenants intact is key.” If a tenant moves out, there are several additional costs incurred by the landlord including leasing commissions, tenant improvements, cost of the vacancy itself.

Another option landlords should strongly consider is allowing the tenant to reduce the amount of s.f. they occupy. It may save the tenant from going dark, which will limit the amount vacancies landlords are currently battling.

I used to drive through town and see a sub-par retailer or food establishment and think “I wonder how long are they going to be in business for?”

Today is a different story as I see many National Retailers that are closing their doors and I think “If they can’t make it, who can?”

Sarah M Pardy of Costar says that in their research, of the 15,000 s.f. or more retail leases signed across the country, there is an overwhelming majority of value-oriented retailers such as:

Khol’s, Beall’s Outlet, Ross Dress for Less, TJ Maxx, Big Lots, Dollar General, Tuesday Morning and several other local retailers.

As Landlords are anxious to find someone to occupy their space, some may argue that they are doing themselves a disservice by allowing the value stores to Anchor their shopping center. The risk is that as the recession ends consumers will once again be quick to pay full price for high-end items. If your shopping center is Anchored by value stores, you will not be able to draw in other “High-End” junior tenants, thus decreasing the integrity of the center and limiting your rental income greatly in the future.

This is a bogus argument. Everyone has changed their spending habits…Everyone. Buyer’s abilities have changed, their credit limits have greatly decreased, their disposable income is next to nothing, therefore they will continue looking for deals at the TJ Maxx and Ross Dress for Less stores. This new “bargain shopping” fad will not fade in the next year…five years…or even ten years.