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www.reit.com Commercial real estate trends and issues that were prevalent in 2011 will continue into 2012, according to Steve Hentschel, managing director and head of Real Estate Banking, Gleacher & Co. In a video interview with REIT.com at REITWorld 2011 NAREIT’s Annual Convention For All Things REIT in Dallas at the Hilton Anatole hotel in November, Hentschel discussed sector fundamentals and recovery. He said that topics including global economic uncertainty, sovereign debt issues, nervous investors and market volatility, will continue into the New Year. When it comes to REITs specifically, Hentschel said one of the trends from 2011 that will carry over into 2012 is the trend of REITs owning core real estate. “People are looking for safety and want to own the highest quality assets,” he said. “There will be a continued emphasis on major market 24/7 cities that have global appeal.” In terms of trends that will be different, Hentschel pointed to leverage. He said that currently there’s too much of a penalty for REITs with high leverage. “The pendulum has swung a little too far in the other direction, so I think that gap will close,” Hentschel said. He added that there’s going to be more of a focus on debt maturities schedules and less focus on the absolute level of leverage. “Another thing that’s developing is that we are watching more private capitol become frustrated with the low cap rates in high quality assets. The spread has just tightened too much,” Hentschel said …
One of the signs of the times that indicates how any nation’s economy is doing can often be determined by how well businesses are expanding in real estate. Right now, there is a continued expansion of commercial real estate and loans for these new projects. The current commercial real estate lending trends indicate that now is a good time to expand your business with a building program or new land purchase.
While the housing market has certainly taken a real dip, and has hurt the sub prime lenders in particular, commercial lending goes on. Many new projects, especially in the income producing properties realm, is seeing solid expansion. This includes the construction of office parks and buildings, multi-family dwellings, hotels, and other general land development programs.
One particular market that has held up its own is office rentals. The demand for office space – even at increased rent values – has grown. This is especially true in New York City (Manhattan), and some other large cities, too. This means that the available office rental space has actually decreased as office space is being filled – much to the owner’s delight. In New York City, office space is being grabbed up – even though the rent has risen to nearly $70 per square foot.
A few other cities, however, still show a slow office rent market. In fact, much office space remains unoccupied. In those cities, though, where office space is in demand, the number of office buildings and office parks are certainly on the rise, as developers rush to fill in the gap. Commercial lenders are also seeing the need and providing the necessary bridge loans and commercial loans for these massive projects.
When compared to last year, there is an increase in the overall amount of activity in commercial real estate lending. This shows a growth of about 0.8 percent that is expected in the third quarter of 2007, according to the National Association of Realtors.
Over the last few years, commercial real estate lending has shown a strong increase. The Federal Reserve (Philadelphia) indicates that large mortgage lenders have gone from about 150% of loans (compared to non-commercial) back in the 1990’s, to over 300% last year.
The number of commercial real estate loans is increasing and lenders are continuing to offer excellent interest rates. The market has begun to show a slight decrease in recent days, but for right now, the rates needed to expand business could not be much better. The qualifications needed to get such a loan also could not be much softer than they are right now, too.
Seeing this kind of commercial real estate trend, and the market’s favor for this kind of loan, you also may be able to benefit greatly by investing now in a new building project or land development program. Check on availability of office space (in particular) in the area, find out how fast it is being secured by new businesses, and if it is in demand, be ready to move on the opportunity. Scope out possible land available, or existing structures that can easily be renovated into office space, get your paperwork in order, and talk to a commercial lender about your goals before someone beats you to it. Now is the best time for action on this kind of opportunity, while commercial loans are still available at great terms.
Please visit SNC Commercial Loans. You can also find more information on direct lending.
Chennai, formerly known as Madras, is one of the four metropolises of India. The capital city of Tamil Nadu, Chennai is the core of all economic, political, and business activities of the state. Chennai is fast achieving repute for IT as well as industrial development. The city provides a fluid environment for investors and buyers to plunge in and explore in both residential as well as commercial sectors.
The Indian real estate is a budding sector and is a boost to the Indian economy. Chennai’s’ real estate segment is impelled by the residential and the commercial sectors. The booming IT industry plays a major role in the commercial upswing in Chennai.
Chennai real estate is a potential market. Being the fourth largest metropolitan city of India, Chennai houses regional offices of many major corporate houses. It stands amongst the trade capitals of the country.
Chennai’s property trends have witnessed gradual upturns with the establishments of a multitude of IT/I.T.E.S and BPO firms, which have generated a plethora of services, employment opportunities and growth prospects for the population. This has led to a significant rise in the real estate demand. Due to the changing lifestyles of the people as a consequence of immediate developments introduced by the growing urbanization, a considerable rise in the property graphs has been recorded. The real estate segment caters to the land requirements for a huge mass of population.
Property in Chennai and land values is relatively cheaper than the trend followed in other metropolitan cities due to the availability of larger and suitable tracts of unutilized land. Having a vast coastline, the city stands at an advantageous position as compared to the other metro cities of India. With a lucrative investment scope, advanced infrastructure, intellectual talented workforce, sound English language skills enhancing the comprehensive developing environment, Chennai is rapidly emerging as a potential destinations for investors and buyers across the world.
The city is also proceeding to becoming a prime manufacturing hub for electrical and electronic industries as well as for auto components.
Chennai offers a stupendous inflow of real estate developers and builders due to the budding commercial scenario as well as affordable cost of living.
An abode to several multinational firms, Chennai has witnessed considerable growth in the commercial segment. The booming BPO, IT and I.T.E.S industries have played a vital role in amending the real estate market of Chennai, preparing it to adhere to the needs of the upcoming business and financial market.
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Equally in step with the commercial sector, Chennai’s residential segment is also on an upswing, further accelerating real estate graphs of the city. The rising trend of luxurious complexes, flats and apartments in Chennai have poised the residential sector, catering to the growing demand for a quality lifestyle.
The progressing commercial market and increasing influx of IT experts have elevated the residential sales, compelling higher investments in the sector by competent builders and buyers.
Chennai is consistently gaining a vantage over neighbouring cities like Bangalore and Hyderabad as a result of better skilled manpower. Multinational companies exhibit a higher interest level in the city due to cheaper lodging facilities and sparse operational costs.
The retail sector has also picked up as a result of the increasing commercial and residential stakes in the real estate market. According to the President of Chennai Real Estate Agents Association, the land for setting up a shop is carefully chosen by the retailers. The vicinity of the prospective shop is thus judiciously contemplated upon.
With the growing commercial opportunities and advancements, Chennai is regarded as the commercial capital of India. The city is extensively emerging as one of the most sought after junctions by foreign buyers and investors, who thrive to make a mark in the Indian real estate.
With Chennai real estate witnessing appreciation at a fast rate, property investment in the city is worth the idea.
Kriti Seth writes on behalf of 99acres.com, which is an internet portal dedicated to meet every aspect of the consumers needs in the real estate industry. It is a forum where buyers, sellers and brokers can exchange information, quickly, effectively and inexpensively. At 99 acres, you can advertise a property, search for a property and browse through Chennai property and other Properties.