Current Events in the World of Industrial Property

Orange County office space shows positive results in 2nd Quarter 2010ANAHEIM, Calif., (JULY 07, 2010) – For the first time in seven consecutive quarters, Orange County’s industrial market showed positive net absorption, posting 278,731 square feet, according to Voit Real Estate Services’ Second Quarter Market Report. Overall, availability is stabilizing and lease and sale transactions are on the rise – both signs that the industrial market is moving in a positive direction, according to Jerry Holdner, Vice President of Market Research for Voit. In the Orange County office space...

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Maybe the US commercial real estate market is turning around. Prices as measured by Moody’s/REAL Commercial Property Price Indices (CPPI) increased 3.6% in May. It was the second monthly increase in a row, after a 1.7% rise in April. “We expect commercial real estate prices to remain choppy in the coming months,” said Moody’s Managing Director Nick Levidy. The positive news of increasing prices over the past two months is tempered by low transaction volumes, forecasts for slowing macroeconomic growth and the rising risk of a double dip recession. Prices are currently 38.9%...

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Link: The Unemployment Crisis In Charts: The Latest Data Today’s unemployment data, which showed that the U.S. economy shed 125,000 jobs in June, wasn’t pretty. And, not surprisingly, it was roundly trashed by the financial blogosphere — Ezra Klein called it “brutal”; Megan McArdle said it was “dismal.” But beyond the headline figure of 125,000 lost jobs and an unemployment rate that dipped slightly to 9.5 percent are some even more discouraging signs. The following charts from blog stalwarts like Brad Delong and Calculated Risk suggest the underlying fundamentals in the unemployment...

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> > > > > > CMBS Delinquency Rate: Smallest Jump Since 2009 – Increase of 17 Basis Points in June to 8.59% > Commentary: The delinquency rate for commercial real estate loans in CMBS showed signs of moderating in June. While the rate was up 17 basis points, that was the best reading since July 2009. > > View the full report here. > For the nine months prior to June, the rate of increase in delinquencies averaged 39 basis points per month (after backing out the Stuyvesant Town impact in March). The lowest increase prior to June was February’s 23 basis point...

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CNBC.com Article: US House Passes Landmark Financial Reform Bill The U.S. House of Representatives on Wednesday approved a landmark overhaul of financial regulations but the Senate put off action until mid-July, delaying a final victory for President Barack Obama. Full Story: http://www.cnbc.com/id/38027454

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We agree with this article written by CBRE. This is a great article on current market conditions. Most pundits in the real estate industry will admit that in early 2009, they expected 2010 to be a banner transaction year fueled primarily by a large pipeline of distressed assets. Those same participants today will also tell you that 2010 and the near future doesn’t look or feel like what they predicted. So where have all the sales gone? New York has had an extraordinarily rapid turnaround in investment sales pricing and volume primarily driven by a lack of product on the market and the perception...

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CNBC.com Article: Weak Economic Reports Support Low Rates Pledge New claims for jobless aid rose last week while consumer prices notched their largest decline in nearly 1-1/2 years in May, suggesting rates will remain ultra low to nurse the fragile economic recovery. Full Story: http://www.cnbc.com/id/37755611

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Yesterday, we had the opportunity to meet with Darla Longo, James Koenig and Dave Consani from CBRE Ontario. They are three highly respected brokers in the market. In our meeting; we discussed the industrial market in the Inland Empire (IE). It was a very optimistic meeting in regards to the market showing positive signs of a recovery. Industrial inventory in the >350,000 sf is low (12 properties in total) in the IE West. Over half of these properties are under contract. Owner/Users are taking advantage of historically low interest rates and the abundance available space. Per square...

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Link: 2010 Mid-Year State of the Retail Market Report This is a great article from Jones Lang LaSalle on the retail sector. #commercial real estate “the days of extend and pretend are coming to a close.” “currently, more than 700 billion in notes backed by retail properties are underwater, though a majority are still performing and current.”

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We have read the Quarter 1 Los Angeles industrial real estate market reports from CBRE, VOIT and Grubb & Ellis. Vacancy has increased for the 10th consecutive quarter. “During the quarter, the Greater Los Angeles industrial market experienced a direct vacacy jump from 3.0% at the end of the fourth quarter 2009 to 3.5% at the end of the first quarter 2010”-CBRE. “As expected, market growth has been negative as more tenants reduced their occupancy needs or vacated existing space.”-CBRE. Average lease rates have continued to fall but are slowing down compared with 2009 quarter...

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