Q & A with Ben Reinberg

Q:  Ben, I feel that the real estate market is picking up; what are you seeing?
 

 A:  Thank you for asking me this question. We see a pick up in transactions compared to the past 6 months. It appears that corporate investment grade tenant properties are trading hands these days.  Since I am a principal, I wanted to offer my broker friends a suggestion. If you have a prospect sitting on the fence about selling their property, this is a great time for them to have you sell their property for 2 reasons:

1. Interests rates are at an all time low and probably won't stay at these levels much longer.
2. Capital that has been sitting on the sidelines is coming back to commercial real estate. There has been an increase in demand, and if your client has a quality property, buyers are out in the marketplace looking for these properties to invest their capital.

Here is a recent excerpt from ICSC SCT Week this past week:

Investors eager to buy commercial property, survey shows 

Some 85 percent of investors say they plan to boost investment in commercial real estate over the next 12 months, according to a Jones Lang LaSalle survey. Investors are more optimistic about the commercial real estate market now than they were six months ago, when 74 percent of the survey respondents said they planned to increase their exposure. Retail real estate remains the least attractive sector, though, behind multifamily, industrial, hotel and office properties.

"Investors are not getting more comfortable with the stability of the investment market, and their risk profiles are increasing as competition remains very high on core product," said Jay Koster, who heads Jones Lang LaSalle's Americas capital markets division. "As transaction activity increases, we'll see more investors move up the risk spectrum in the next six months."

The majority of respondents said they expect to see a considerable increase in commercial-mortgage-backed securities issues over the next year. A plurality of respondents said total issuance will probably reach the $10 billion to $15 billion range by year-end, and then double to $20 million to $30 million next year.

"The debt markets continue to loosen as life companies and banks, as well as private capital, increase their appetite for real estate investment," said Tom Fish, executive managing director of Jones Lang LaSalle's real estate investment banking business. "Investors are seeing an increasing amount of capital becoming available, but that is still best priced for core assets in key coastal markets. We expect the increase in CMBS issuance to improve the real estate lending environment considerably in 2011."

Source: Ben Reinberg, President, Alliance Equities, LLC - Oct. 2010