Parking Lots Offer Safe Haven for Real-Estate Investors

Published: Thursday, 1 Dec 2011
By: Rob Reuteman,
Special to CNBC.com

If you’re scouting the ravaged commercial real estate sector for a safe haven, parking lots may be worth a look.

Courtesy: International Parking Institute

If you can find one to bid on before it’s snatched up, that is. And if the price isn’t already well out of your range.

“A surface parking lot offers a good rate of return and its rewards are as close to being recession-proof as you’re going to get,” says Ross Moore, chief economist for Boston commercial real estate firm, Colliers International.

“The older ones are nice little cash cows with relatively little maintenance,” adds Moore, who has authored an annual North American Parking Rates Survey for the past ten years.

Says the Alternative Asset Alliance newsletter, “Investors are beginning to realize that a well-located urban parking facility offers stable, long-term revenue growth and that this asset class is becoming an important part of any diversified realestate portfolio.”

The numbers overwhelmingly favor the US parking industry, which grosses some $25–30 billion annually, according to the International Parking Institute.There are nearly a quarter-billion registered U.S. passenger vehicles, which remain parked 96 percent of the time, IPI says.

But two problems loom for the average investor wanting to get into the parking business, says John Roy, co-author of The Ultimate Parking Business Buyer’s Guide.

“Not many show up in real estate listings, and the ones that do are very expensive and usually out of reach for smaller investors," says Roy.

But with the recession pummeling the price of almost all real-estate assets, “This is the best time to get into parking market," he says.

Roy’s online newsletter offers a simple starting point: Do an online search for the term “parking lot for sale,” and maybe add the city you’re eyeing.

A recent search offered slim pickings. There’s a corner, paved lot in downtown Memphis “next to a famous bar/grill” and “near many amenities.” Price: $13,000.

A half-acre paved lot in Cook County, Ill., is selling for $724,000. The much-higher asking price may be why it’s been online for more than three months.

Commercial Brokers

Another, more traditional approach is to find commercial brokers who specialize in parking lots.

Wade Fletcher and Steve Roesinger do just that in Denver for the Newmark Knight Frank Frederick Ross Capital Group. Roesinger has been buying and selling parking lots for nearly 40 years.

He says he’s on a first-name basis with local lot owners he’s been calling on all that time.

“There are a limited number of surface lots out there, but as with any real estate, sometimes people don’t know they want to sell until you present them with an offer,” says Roesinger. “Other times, an illness, a pending move or a financial reversal may trigger a sale. “

While $100,000 ...

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NAI Global Selects Hallmark Partners, Inc. to Expand Services in Jacksonville, FL

NAI Global, the world’s premier managed network of commercial real estate firms and one of the largest real estate services providers worldwide, announced today it is expanding its coverage into Jacksonville, FL with the addition of Hallmark Partners, Inc. Hallmark Partners will continue to provide its clients with best-in-class services through a newly formed subsidiary, NAI Hallmark Partners, LLC, and will operate as NAI Hallmark Partners.

Since its inception in 1993, NAI Hallmark Partners has consistently been recognized as one of the leading full service commercial real estate development, leasing and management firms in Northeast Florida. The company’s services offerings include land brokerage, tenant representation, landlord advisory and build-to-suit services. NAI Hallmark Partners has received multiple industry awards and honors.

“We are pleased to announce this aggressive expansion of our commercial real estate services operations through our affiliation with NAI Global,” said NAI Hallmark Partners President Alex Coley. “We are excited to add a national and global platform for the comprehensive compliment of commercial real estate services. With this announcement, we are furthering our commitment to the Jacksonville community and the growing list of clients that make our firm the premier provider of real estate services in the Jacksonville area.”

“Hallmark Partners is one of Northwest Florida’s strongest real estate services firms and I am delighted that they are joining NAI as our Jacksonville area representative,” said NAI Global Executive Vice President David Blanchard. “We look forward to working together with Alex and the talented professionals of NAI Hallmark Partners in creating new opportunities for NAI clients around the world.”
NAI Hallmark Partners is located at 6675 Corporate Center Parkway, Suite 100, Jacksonville, FL 32216. Headquartered in Princeton, NJ, NAI Global manages a network of 350 offices and 5,000 professionals in 55 countries across the globe.

Despite Economic Uncertainty in U.S., NAR Predicts Commercial Real Estate Growth in 2012

WPC


According to the National Association of Realtors (NAR), commercial real estate markets have been relatively flat this year, but improving fundamentals mean a more positive trend is expected in 2012.

Lawrence Yun, NAR chief economist, said there is little change in most of the commercial market sectors.  "Vacancy rates are flat, leasing is soft and concessions continue to make it a tenant's market," he said.  "However, with modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year."

The commercial real estate market is expected to follow the general economy.  "Vacancy rates are expected to trend lower and rents should rise modestly next year.  In the multifamily market, which already has the tightest vacancy rates in any commercial sector, apartment rents will be rising at faster rates in most of the country next year.  If new multifamily construction doesn't ramp up, rent growth could potentially approach 7 percent over the next two years," Yun said.

Looking at commercial vacancy rates from the fourth quarter of this year to the fourth quarter of 2012, NAR forecasts vacancies to decline 0.6 percentage point in the office sector, 0.4 point in industrial real estate, 0.8 point in the retail sector and 0.7 percentage point in the multifamily rental market.

The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of 231 local market experts, shows the broad industrial and office markets were relatively flat in the third quarter, in step with macroeconomic trends.  The national economy continues to affect the sectors, with 92 percent of respondents reporting the economy is having a negative impact on their local market.

Even so, ...


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Earnings growth rate for the Consumer Discretionary sector boosted by retailers | FactSet Research Systems

Earnings growth rate for the Consumer Discretionary sector boosted by retailers | FactSet Research Systems

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Triple-Net Triple Threat

Investors vie for the safety, convenience, and ROI of top net-leased deals.
CCIM.com
by Sara Drummond

Looking for a rock-solid investment in a shifting economy?

Look no further than single-tenant net-leased properties. In markets where shopping centers sit empty and office buildings are dark, the lights are on (usually 24 hours) at the corner drugstore — provided it’s a Walgreens or a CVS. With their investment-grade credit ratings and penchant for long-term leases, these drugstore triple net-leased deals attract top dollar in almost every market.

But drugstores are only one of a stable of creditworthy tenants for net-leased deals, according to a recent anecdotal survey of CCIMs. Other tenants are also attracting buyers. CCIMs report that everyone from all-cash individual buyers in small towns to big-city real estate investment trusts are looking to add one, two, or 20 of these stable investments to their portfolios.

Supply/Demand

From every U.S. region, CCIMs report that the NNN supply is tight and the demand is high. “The entire state of California has more money than product,” says George L. Renz, CCIM, of Renz & Renz in Gilroy, Calif. He has the investors: His biggest challenge is finding deals with good intrinsic value that “truly reflect safety and truly reflect investor’s goals — most of which involve risk avoidance.”

In Atlanta, “I am seeing more out-of-town buyers from everywhere in the country and even international,” says Virginia I. Wright, CCIM, vice president of net-leased investments for Bull Realty. “With a strong lease, tenant, and location, they are satisfied without having to visit the property and just enjoy the rent checks. Many buyers would love portfolios of properties; however, these are more difficult to come by.”

Many of those portfolios are going to institutional investors that have turned their attention to net-leased product in the past few years. REITs, insurance companies, and pension funds have contacted CCIM brokers in smaller markets this year, looking for portfolio deals.

Money Is Available

One reason for the interest in net-leased deals is that financing is available at all levels. With most net-leased properties priced under $5 million, many single-asset purchasers buy with cash, according to the CCIM market round-up. “We have been doing transactions almost always with knowledgeable all-cash buyers who want to close swiftly,” says Rob Murdocca, CCIM, of Prescient Property Group in Wayne, Pa.

Len S. Jarrott, CCIM, of Jarrott & Co. in Santa Barbara, Calif., has completed ...

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Retail Isn't Broken. Stores Are - Harvard Business Review

Retail Isn't Broken. Stores Are - Harvard Business Review

NAI Rio Grande Valley Market Report 2011

By: Rey Anzaldua

NAI Rio Grande Valley Realtor

As global companies look to expand or relocate within the United States many of their operations require a young labor force, easy access to international sea, air and cargo ports of entry, low cost of living, and access to development opportunities.  Hundreds of companies have taken a hard look at the Rio Grande Valley in south Texas.  Two nations, one region, many choices is the marketing slogan for Rio South Texas, which promotes all of the communities on both sides of the Rio Grande Valley Border with the principal cities of Brownsville, Harlingen and McAllen, Texas and Matamoros, Rio Bravo, and Reynosa, Mexico.

Commercial real estate has stabilized in the Rio Grande Valley after a series of down years.  This makes the market one of the best in the nation and according to Forbes Magazine, the McAllen MSA ranked 4^th for best Mid Sized MSA for jobs while Bloomberg/Businessweek ranked the MSA 4^th in cost of living nationally.  The Metropolitan Policy Program (MPP) at the Brookings Institution regularly lists the 20 strongest major metro areas in the U.S.  It looks at fundamental economic issues: economic activity, housing, and employment.  The McAllen MSA was ranked in the top 20 of the Strongest Metro Areas by the MPP.

The local colleges and universities (University of Texas Brownsville and Pan American, South Texas College, Texas Southmost and Texas State Technical College), continue their growth not only in students but in construction of new buildings and acquisitions of land to accommodate the enrollment growth and movement into research and development.

Dallas Federal Reserve recent data shows a slight increase in retail sales of 6%.  With several big box retail stores set to open late 2011 and early 2012 the stage is set for a continued increase in retail sales.  Bass Pro Shops will complete construction before the end of 2011 in Harlingen while in the McAllen MSA a Costco in Pharr will be completed in the spring of 2012.  

Healthcare and government agencies continue to dominate the office market.  Retail sales in 2010 in Hidalgo and Cameron counties reached $14.5 Billion dollars confirming that the Rio Grande Valley remains a very healthy retail market.

NAI Rio Grande Valley is a focused commercial real estate brokerage, consulting, development and syndication firm serving the Rio Grande Valley and based in McAllen, Texas. Our mission is to transform real estate opportunities into profits for owners, users and investors.

NAI Rio Grande Valley advises it's customers and clients on how to maximize the value of their assets and utilize real estate to their long term advantage through comprehensive and strategic planning, execution and management.