8/11/2019 2009 Q2 Commercial Real Estate Market Survey http://slidepdf.com/reader/full/2009-q2-commercial-real-estate-market-survey 1/19 Commercial Real Estate QUARTERLY MARKET SURVEY August 2009 NATIONAL ASSOCIATION OF REALTORS ® The Voice for Real Estate ® NATIONAL ASSOCIATION OF REALTORS ECONOMIC RESEARCH
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8/11/2019 2009 Q2 Commercial Real Estate Market Survey
THE NATIONAL ASSOCIATION OF REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all
aspects of the residential and commercial real estate industries..
Although the information presented in this survey has been obtained from reliablesources, NAR does not guarantee its accuracy, and such information may be incomplete.This report is for information purposes only.
The REALTORS® Commercial Real Estate Market Survey measures quarterly activity inthe commercial real estate markets. The survey collects data from commercial Realtors®.The survey is designed to provide member Realtors® with an overview of their markets’
performance, sales and rental transactions, along with current economic challenges andfuture expectations. The questions are designed to capture the effects of the existingeconomic conditions on the commercial real estate business. Each quarter, participantsrespond to questions regarding the current demand for commercial properties, price, cap
rates, rental concessions and other economic factors.
8/11/2019 2009 Q2 Commercial Real Estate Market Survey
• Sales volume dropped 30 percent in the second quarter compared with a year ago.
• Sales prices declined 20 percent in the second quarter on a year -over-year basis.• Cap rates rose on average 95 basis points from the same period a year ago.
• Average vacancy rates increased 9 percent from the first quarter of the year.
• Rental rates were down 11 percent compared with the previous quarter.
• Concession levels moved up 11 percent on a quarterly basis.
• Financing continues to top the list of most pressing current challenges.
49%
4%
20%
19%
8%
REALTORS® most pressing current challenges – Q2 2009
Financing
Inventory
Local Economy
National Economy
Other
18%
11%
2%
21%
5%
43%
Over $10 M
Between $5 M and $10 M
$2 M and $5 M
Between $1 M and $2 M
Between $500K and $1 M
Under $500K
Dollar amount of REALTORS® last transaction?
8/11/2019 2009 Q2 Commercial Real Estate Market Survey
The REALTORS® Commercial Real Estate Market Survey asks participants to comment oncurrent challenges and difficulties in their markets. Below are a few of the comments aboutthe second quarter environment and members’ most pressing concern.
“General fear and uncertainty with the political and economic climate is holding people back. There are very few nichebusinesses that are expanding.”
“Reluctant qualifies buyers that are worried about the future of the economy.”
“Existing Commercial Loans that are coming due. Until this is solved there will not be a good flow of new loan requests.”
“We are seeing landlords not able to complete tenant improvements and pay commissions due to lack of capital. One recenlease cancellation of a AAA tenant resulted from a landlord going to 12 banks, all of whom refused to loan the money for the
tenant improvements.”
“Ability to get purchase money at reasonable terms.”
“Sellers will not lower their prices to the current market. There are buyers out there, but they don't want to pay yesterday' s prices.“
“The banks will not lend for commercial deals and the requirements are totally out in space. Comment from Bank " we are nlending for rental properties" I lost several contracts to small investors because of this.”
“Financing - owner clients are concerned they will not be able to refinance notes that mature during the next 2 - 3 years.”
“The most pressing concern is that, no matter how much we spend on advertising, no matter what we do, nothing is selling.”
“Too much inventory, no new construction, prices are down to nothing, and more space is becoming available as a result ofeconomy. Now I have properties at $1/SF.”
“Difficulty in obtaining financing and the number of foreclosures/short -sales that dominate the market.”
“Restrictive local government zoning and occupancy codes and multi -month local government review processes for
commercial occupancy permits. “
“Over 50% of our work is repossessed commercial property.”
“Lack of reasonable relationships between banks, government and private sector in supporting market stability. Too muchgovernment involvement in everyday business has everyone scared to act on an individual basis. Risk factors are increase
due to government involvement and lack of clear directions of government participation.”
“Overall concern for the economy. Most people are in a wait and see mode. The financially strong are starting to make sommoves because they feel the pricing has hit bottom and they are taking advantage of REO's and deep discounts from the
banks.”
“The economy. Most clients and customers have this as their number one concern for all parties.”
8/11/2019 2009 Q2 Commercial Real Estate Market Survey
The Research Division of the NATIONAL ASSOCIATIONof REALTORS® produces the Commercial Real EstateOutlook, a quarterly report forecasting commercial mark
fundamentals. NAR Research also provides theCommercial Leading Indicator, an early measure ofchanges in market activity. Additionally, NAR Researchexamines how changes in the economy affect thecommercial real estate business, and evaluatesregulatory and legislative policy proposals for their impaon REALTORS®, their clients and America’s propertyowners.
If you have questions or comments regarding this report
or any other commercial real estate research, pleasecontact George Ratiu, NAR Economist, [email protected].
• To find out about other products from NAR’s ResearchDivision, visit www.REALTOR.org/research.