Archive for the ‘Commercial Property For Sale’ Category

Recent commercial property reports in the British press recently have been hailing the arrival
of the long-awaited ‘Bottom’, yes that’s right, as far as commercial property goes - all signs are that
it’s bottomed out.

As the U.S. commercial real estate continues it’s slump as foreclosures and defaults keep rising, many commentators in the U.K. are announcing the bottom has arrived, and from here on in, it can only go upwards. The bottom in commercial property has arrived, and it’s good news from here. According to analysts, the U.K is well placed for a recovery, whilst many eurozone economies continue to look unstable.

Hammerson, one of the leading european property advisors, has reviewed it’s figures and has stated that the U.K commercial market has started to turn towards recovery. With the decline of rental rates slowing and more investors arriving from out of the U.K to stir up interest, all the signs are pointing towards the intial stages of a turnaround. ‘The near future will see a turnaround’, Hammerson said in their release, as well as expecting to see a decline in the rate of default in the prime commercial sector.

Decline Eases

Recent reports noted that in may 2009, prices in the commercial sector decreased by only 1.5% - the lowest fall in 12 months. Prices have declined over 40% since the peak of 2007.

Predictions are that commercial property which is poor locations on condition are expected to fall around 10% this year, whilst property towards the high-end of the market is now expected to rise considerably over the next 12 months.

Prices on the U.S.

Across the Atlantic, there is a very different story. Defaults and bankruptcies continue to rise with the total of commercial property now in default estimated at over $100 million - more than double from the start of the year. Hotels and retail space remains high on the list of problem property.

There remains great concern as to where the solution will come from, as the problem isn’t going away, but getting bigger. President Obama only this week stated that the government’s reform and fiscal aid’s effects will really only be seen towards the end of the year. There is talk in washington of another stimulus plan being drawn up, if the money is there to be spent. Talks continue.

In California, the U.S.’s most populated state with 18 million inhabitants, foreclosed properties continue to dominate the real estate landscape, and in Dallas commercial real estate foreclosures have jump 12% from the start of the year. On the upside of course is the opportunity for buyers to capture real estate deals well below market value.

To see what’s happening in your local area, Click Here to search for Commercial Property.

I know what you’re thinking: Commercial Real Estate? At a time like this? With unemployment on the rise and vacancy rates going up? Allow me to explain myself!

Who I’m talking to are the people who have a business, and are currently leasing space. These people are also planning on being in business for the next few years - let me give you a few points to consider.

If you have a business, you need a space to operate from. If your renting, and the annual rate of rent increases on average 3% per year, so you’ll never see a recoup for all that rental expense.

You’ll also never need to worry about the property being sold out from underneath you, forcing you into what could be an untimely and expensive move. Your also buying secuirity.

There are also a large number of properties on the market at historically low prices. Due to commercial investors’ difficult climate, they are having to sell off even cash flow positive properties, to balance books as vacancy rates fall. This is a great time to start investing in property - you can use your business cash flow for your mortgage expense.

As a business owner and property owner, you are not concerned with short term fluctuations in property values. You are in it for the long term. As many commentators agree - they upturn will inevitably come towards the end of 2009 - but if you wait for ‘the bottom’ to arrive, you may well have missed it.

In the U.S., inflation is coming. With all the extra money that has been printed, and a ballooning national debt, it’s only a matter of time. Commercial real estate is an excellent hedge against inflation, with commercial property historically increasing on average 2% higher than inflation.

When the day comes for you to retire, owning the property will offer you several atttractive options. You could sell the business and lease the property to a second business, contining to generate income, or sell both together for a lump sum, increasing the value of the business with a property tie-in.

There are also many tax advantages to owning the property where your company operates from. The interest you pay on the mortgage may be tax deductable, there is depreciation to consider and many other benefits. Talk to your tax accountant for more details on how to reduce your tax bill.

In the current economic climate, it’s hard to go against the grain of what most people are telling you. Owning commercial property right now is an excellent choice. As Warrren Buffet, the world’s greatest investor says, ‘Be fearful when others are greedy, and greedy when others are fearful.’ Well, there is a distinct feeling of fear surrounding property purchasing right now. Be greedy.

For an article on what the smart money’s doing right now in Commercial Property, Click Here.

To see what’s currently on the commercial property market in your area, Click Here.