SBA Loans for Commercial Real Estate Refinancing

Monday, March 28th, 2011

Texas Border Business

Agency will begin accepting refinancing applications as of Feb. 28 for 

small businesses facing maturing mortgages, balloon payments

Washington, D.C. – Small businesses facing maturity of commercial mortgages or balloon payments before Dec. 31, 2012, may be able to refinance their mortgage debt with a 504 loan from the U.S. Small Business Administration under a new, temporary program announced today. 

The new refinancing loan is structured like SBA’s traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. A key feature of the new program is that it does not require an expansion of the business in order to qualify. 

SBA will begin accepting refinancing applications on Feb. 28. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012.

“The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years,” said SBA Administrator Karen Mills. “As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs.”

The SBA initially will ...

Click here to read more

Article from the March 2011 Issue of Texas Border Business

The Risks & Benefits of Triple-Net (NNN) Properties

by Ray Alcorn 

CREONLINE.COM

Articles

One of the most popular property types in commercial real estate are "triple-nets," also known as "NNN" deals. These are typically single-tenant retail properties leased to tenants with high credit ratings on "net, net, net" terms (hence the NNN acronym), meaning the tenant is responsible for real estate taxes, insurance, and all maintenance.

At first glance these deals appear to be the perfect investment. They are typically new or nearly new, have no management responsibilities, a long-term lease to a quality tenant, stable cash flow, attractive financing, and the unique tax benefits only real estate provides.

The advantages have fueled a tremendous growth in demand from investors on every level. They appeal to part-time investors looking for guaranteed income with no management responsibility, and they provide an attractive exit strategy for those with mature portfolios. As with any investment, there are many factors to consider in valuing and structuring the deal.

First, like frozen food, you "pay" for the convenience of no management duties and stable, long-term income in the form of lower returns than with a more hands-on, high-maintenance project. Prices start in the range of a 6% cap rate for the highest rated tenants, up to perhaps 8.5%–9% for lesser credit quality or those with short lease terms.

[Note: A cap rate is the percentage of return on the investment as if it were bought with all cash. The lower the cap rate, the higher the price. See this article: Deriving Your Cap Rate for more detail.]

Investors who use debt financing can produce leveraged returns in the 10% - 12% range. But as we will see, income is not the only determinant of value.

Second, and often overlooked, is the wide range of risk exposure for NNN properties, even those with investment grade credit ratings. Contrary to popular belief, these are not "risk-free" investments, and in fact require a level of understanding beyond that of more typical real estate investments.

Risk is always present

In evaluating any NNN deal, be aware that all

Click here to read more

McAllen MSA Ranked Top 20 Strongest Metros in 2011 by Brookings Institute

March 2011 — MetroMonitor: Tracking Economic Recession and Recovery in America’s 100 Largest Metropolitan Areas

McAllen Ranked top 20 strongest Metropolitan areas in recovery in the recession for average rank across a series of four indicators: employment change; unemployment rate change; gross metropolitan product change; and housing price index change.

As of the fourth quarter of 2010 (ending in December), the nation’s 100 largest metropolitan areas were seeing widespread and steady growth in economic output but only slow and inconsistent improvement in the labor market.  Job growth was sluggish and unemployment rates, although lower than at the end of 2009 in most large metropolitan areas, remained very high.  Housing market performance was mixed; house prices fell in nearly all large metropolitan areas, but the pace of foreclosures slowed.  As always, metropolitan economic performance varied greatly among the 100 largest metropolitan areas.

Nearly all those whose economies have suffered the least rely substantially on government (e.g., Washington and several state capitals), health care (e.g., Baltimore and Pittsburgh), education (e.g., Pittsburgh and Austin), or oil and gas (Denver). The map above shows how the 100 largest metropolitan areas rank on a combination of four economic indicators: percent job change from the peak quarter to the fourth quarter of 2010, change in the unemployment rate from December 2007 to December 2010, percent change in economic output (gross metropolitan product) from the peak quarter to the fourth quarter of 2010, and percent change in an index of house prices from the peak quarter to the fourth quarter of 2010.

Click here to read entire report

View all interactive maps, click here

Census Figures Count: Growth All Around Us

Monday, March 28th, 2011

By Mario Reyna, South Texas College Division Dean of Business and Technology

Texas Border Business

The numbers from the U.S. Census Bureau are out, confirming what we see before our eyes - growth is all around us. From Brownsville to Roma,there is absolutely no mistake that the Rio Grande Valley is building an infrastructure that will help this area become the vanguard for the United States.

The U.S. Census Bureau reported Hidalgo County grew from 569,769 to 774,769 residents representing a 35 percent increase during the last decade. Cameron County grew from 335,227 to 406,220, a 21 percent increase, while Willacy County grew from 20,082 to 22,134, a 10 percent increase. Starr County also reported a gain from 53,597 to 60,968, which is a 13 percent increase. 

As the census data is being digested, Valley leaders are ...

Click here to read more

Get to Know Our Community

http://myemail.constantcontact.com/495-Commerce-Center--Get-to-Know-Our-Community.html?soid=1102470514023&aid=tI8fKL242iA

We've Been Busy!

View some our recent CLOSED deals by clicking on the below link.

http://myemail.constantcontact.com/We-Have-Been-Busy-.html?soid=1102470514023&aid=vjUn3Vyh6IA

Colorado Properties Priced for Quick Sale

http://myemail.constantcontact.com/Colorado-Properties-Priced-for-Quick-Sale---Bonus-Offers-for-Buyer-s-Agents.html?soid=1102470514023&aid=6gogucENMZQ

Everyone Has a Story...Here's Ours

NAI RGV Reintroduces Itself to the Market

Thursday, September 2nd, 2010

Mike Blum, NAI-Rio Grande Valley managing Partner

By Roberto Hugo Gonzalez

Texas Border Business

BIG STORY

They find that the valley sold $1.1 billion in the food, beverage and hospitality industryin 2009 alone

In 2004 Mike Blum approached Charles Mueller owner of Synergies LLC, a multi-faceted Rio Grande Valley based company, with the idea of creating a real estate division. Mueller agreed and Synergis Realty Group was created.

“Almost at the same time of that creation the then NAI Global affiliate which was known as NAI RIOCO decided to give up its NAI flag,” Blum stated. Blum, who had been with NAI RIOCO since 1997, knew the unique opportunity and the numerous benefits that come with acquiring the NAI flag. Immediately, Mueller and Mike approached the NAI Global Corporation about becoming the NAI affiliate in the Rio Grande Valley.

“So in 2005 the deal was made and we became NAI Rio Grande Valley with over $100 million worth of listings that came over to our table,” Blum stated. With this affiliation, NAI Rio Grande Valley became the NAI Global Rio Grande Valley affiliate. NAI Global is the largest managed, network of commercial real estate professionals with over 5,000 professionals, 325 offices in 55 countries. This makes it possible for NAI Rio Grande Valley to help its clients around the corner and around the world. “We are no longer affiliated with NAI RIOCO, in fact, NAI RIOCO does not exist.”

Blum is the managing partner for the company. He is well known as someone who loves to study and understand the markets. He believes this is important because knowledge is power and markets are in a constant state of evolution. “We are a dynamic, growing community; the population has grown 30 to 40 percent during the last decade.” Blum continued, “Because there has been a significant change in the market it’s time to re-introduce us to everyone to reacquaint them with the uniqueness of our organization and the talent and skill of the people who make us up.”

NAI Rio Grande Valley has ...

Click here to read more

Audi to come to San Juan Corners | san, juan, audi - TheMonitor.com

March 25, 2011 12:01 PM

Elizabeth Findell

TheMonitor.com

SAN JUAN— Apparently enthusiastic about the start of a Mercedes-Benz dealership that opened in San Juan in December, its owners announced plans this week to open an Audi dealership in the city.

“We’re excited, this being our second successful negotiation with a luxury brand,” Economic Development Corporation Director Miki McCarthy said. “It definitely brings clout to our retail corridor.”

Boerne-based Ron Heller and Bill Bird, who own the Mercedes-Benz dealership along with Alfonso Cavasos, had been in discussions with the city about buying a second property since last May and closed on the 7-acre purchase in January.

The new dealership will be located in San Juan Corners, on the south side of U.S. 83, near Cesar Chavez Road. The much-touted city retail development, which has been in the works since 2007, has remained mostly stalled since then.

McCarthy said she hoped the placement of the dealership would help accelerate business development at San Juan Corners and said other projects in the area are under negotiation. Audi is expected to bring in ...

Click on the below link to read more

Audi to come to San Juan Corners | san, juan, audi - TheMonitor.com

This could be the best year the real estate industry has seen in a while. Do you have the right mental attitude to take advantage of a turnaround?

This year is starting off with a bang!

As we head into the spring selling season, the passion for the business seems to be on the rise for our industry. The energy level of practitioners and buyers is higher than I’ve seen it in a while, and that’s certainly welcome news for all of us in real estate.

The attitude that you carry will affect your success. It’s easier to maintain a positive perspective early in the year, when you’ve typically just set goals and you’re getting new things going. The challenge comes when you get further into the year or when the transactions and problem clients start to drag down your attitude and energy. That’s when we really need a boost to stay our positive course.

Let me share a few tips on keeping your attitude high throughout 2011.

1. Your attitude is a choice: Attitude is something we choose each day. We can decide to have a positive or negative view of things. It sounds simple, but you can resolve to be one or the other each morning when you wake up. Before you get out of bed, make the decision and stick to it.

2. ... Click below link to read more

Blast Off: Dirk Zeller: Sales & Marketing: REALTOR Magazine