Thursday, February 23, 2012

Real Money: More Capital Expected To Flow to CRE - CoStar Group

National Retail Properties, COPT, Equity One, Rouse Among Several Raising Capital
February 22, 2012

A number of lenders see more capital coming back into commercial real estate in 2012 in much greater volumes and across multiple lending sources.

All of the 20 institutional lenders with whom Jones Lang LaSalle met with during last week’s Mortgage Bankers Association conference in Atlanta indicated a stronger appetite or allocation for placing commercial real estate mortgages in 2012.

Jones Lang LaSalle also partnered with Penton Media Research on a proprietary survey that compiled feedback from 186 borrowers and 136 lenders that together comprise a total median $73.3 million in commercial real estate asset value.

In the survey, lenders reported positive expectations for 2012 funding aims including a 12% uptick in expected capital placement this year.

"We expected to hear bold predictions from all of the lending sources along the capital stack and they didn't disappoint with strong inclinations to place commercial real estate debt," said Tom Fish, co-head and executive managing director of Jones Lang LaSalle's real estate investment banking business. "We were pleasantly surprised with lenders' acceptance of risk as more indicated they had cash flow for the secondary markets and property types, indicative of lenders moving up the risk curve."

"While absolute borrowing rates are at historic lows, lenders view commercial real estate mortgages as attractive investment opportunities versus alternative bonds or other fixed-rate alternatives. That should result in larger allocations to commercial real estate this year from life companies, commercial banks and CMBS originators," added Mike Melody, the other co-head and executive managing director.

The lenders Jones Lang LaSalle surveyed agreed, indicating an increasing trend that has been on the move the past two years. Lender financing in 2011 increased an average 11% over 2010. Lender respondents expect 2012 financing to increase even more with a 12% improvement over 2011.

    2012 lender expectations highlights were as follows:
  • Financing in 2011 increased an average 11% from 2010. Respondents expect 2012 financing availability to increase 12% over 2011.

  • Apartments represent the best investment opportunities as 76% chose the product type. Another 48% of lenders worry the most about hotel loans.

  • Lenders indicated that 62% of loans closed are for long-term and 38% are for short-term loans. Those percentages aren't expected to move much with 2012 long-term expectations at 64% and short-term at 36%.

  • Following a volatile 2011, CMBS originators are back in the market in a big way in 2012, as volumes are expected to rise as high as $50 billion this year.

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Real Money: More Capital Expected To Flow to CRE - CoStar Group

Choosing a Location for Your Business

Choosing a Location for Your Business

There's more to consider than just cost

From , former Guide

One of the basic concepts taught in almost every introductory marketing course is The Four P's: Price, Product, Promotion and Place. "Place" refers generally to distribution, i.e., where your customer evaluates and ultimately receives your product or service. While this may not matter much for people who work virtually, or who run a business that drop-ships from a third party, it's critical for restaurants, retailers, and even many service businesses. Ironically, while "place" is often the most permanent of the four P's, it's also often the most overlooked.
Location is about more than just choosing a building. Perhaps for you, opening your business in your own town, or even your part of town, is a given. But consider the big picture:
  • State - Income taxes and sales taxes vary greatly from state to state, as do regulatory requirements. Is the state you live in friendly to entrepreneurship? To the specific type of business you want to run? Now might be the time to consider a move if it isn't, or possibly to open your business in a nearby state if you live near a state line. The Small Business Survival Index ranks the various U.S. states on how friendly they are to small business.
  • City - Rent and other costs, availability of labor, taxes, regulations and government economic incentives can also vary greatly from city to city, even within the same state. Or maybe a small town is the perfect spot for your business. Entrepreneur Magazine publishes an annual list of the Best U.S. Cities for Small Business. Under 30 CEO also has a list of the best cities for young entrepreneurs.
  • Part of town - What kind of commute is involved? Is the part of town consistent with the image for your business? Rent varies greatly according to location.
  • Location relative to streets, parking, and other businesses - Do you need to be visible and/or easily accessible to pedestrian and automobile traffic? Will being close to businesses that draw a similar clientele help your business? For example, a sporting goods store or health food store might do very well next to a gym.
  • Type of location Do you need office space, retail or warehouse? Retail is generally the most expensive of the three.
There are many factors to consider in choosing the location for your business. While cost is obviously a major consideration, you must also think about your various constituencies. Is your location important to...
  • You? The space has to work for you, or it won't work. Remember, you're the one has to work there every day.
  • Your customers? It also has to work for your customers, or it won't work. No customers = no business.
  • Your employees? This issue may not be as critical at first, especially if you don't have any employees yet. But the ability to attract and keep good employees will be affected by your location.
  • Strategic partners? While this may not seem like a big issue, the reality is that strategic partnerships happen more easily when the partners are local to each other. Why do you think that certain areas become hubs for certain types of business, such as Silicon Valley for the tech industry?
  • Potential investors or buyers? You may not even be thinking about that yet, but potential investors looking at the long-term value of the business will see location as an important factor.
Each of these groups has different concerns about the location:
  • Cost - Most obviously, can you afford it? Also, though, consider whether your customers and employees can afford it. For example, is there free parking, or is it expensive? Will higher rent cause you to charge higher prices to your customers? That's not necessarily a bad thing, but a factor to consider. What about taxes? Income taxes and sales taxes vary greatly from state to state, and if you buy your own property,
  • Convenience - Is it easy to find? Is parking close by? Consider your clients. If you're dealing with pregnant mothers and the elderly, they may have a different concept of "convenient".
  • Safety - This is an increasingly important issue for both customers and employees. Is the parking close by? Well lit? Is there security on the premises?
  • Prestige - Would a downtown address add credibility? Will wealthy clients favor a business in their own neighborhood? Some places even provide virtual offices with prestigious addresses, such as Beverly Hills, Silicon Valley, or Manhattan.
  • Traffic - Retailers and restaurants love it, office workers don't.
  • Facility requirements - Do you have any special needs, such as high power consumption or specialized wiring? Do you need meeting space, but only occasionally? You might consider a shared office suite (often called executive suites) in that case.
  • Zoning - Many cities have very strict zoning requirements. Make sure your business is even allowed there before you sign the lease!
As you can see, a fully informed decision involves a fairly complex matrix of issues. Determine your priorities, keep an open mind about your options, do your research, and get ready to make one of the most important decisions about your business.
Mix-Use Business Park in McAllen, TX 
Ideal Setting
495 Commerce Center is situated between McColl and Jackson on 495 (Pecan Blvd), a prominent thoroughfare that offers high visibility and easy access to major transportation arteries. Thoughtfully designed landscaping element, including a lake and jogging trails, enhance the campus-like quality of this business park. The development offers varying sized lots starting at 1 acre that are ultimately customized to fit the client’s needs.

495 Commerce Center offers direct access or proximity to:495 Commerce Center
  • Regional transportation
  • Future interstate I-69
  • Hospitals & Medical support services
  • Retail centers and support services
  • An international airport
  • Eleven  international bridges
  • Higher education and technical training
  • Trade-related training resources
  • Federal, State and County courts