Forecast for Commercial Property Market

by Hamid Hakimi | Commercial Real Estate

Forecast for Commercial Property Market

Commercial Real Estate August 2012

As we are approaching the end of an economic meltdown that witnessed one of the worst collapses in commercial real estate all over the nation, the constant arrival of massive portfolios of the bank-owned commercial properties is still a concern for this sector’s future. The misfortune of theses commercial property owners, on the other hand, has attracted many investors who’re looking to take advantage of these rock bottom prices into the recently emerging commercial REO market.

Although the tight credit has been a detouring factor in the past, but finally commercial lenders are slowly, and ever so cautiously, opening their doors to the new loan applications. This could be the fuel necessary to reignite the construction industry. One of the main obstacles in re-starting the commercial property construction is the large portfolio of underpriced commercial properties that needs to be picked up before a new construction makes sense. This is in a sense identical to what residential property market forced to face with. The solution still remains in the availability of credit for purchasing the bank-owned commercial real estate properties. Ease of credit will to eventually relieve the market from the cheap foreclosed assets and open the gates to the new construction properties. Simply put, as long as there are existing properties priced at less than the replacement value it would not be economically wise for the developers to start new construction of commercial projects.

With the global network of affiliates in Europe, Asia, Africa and the Middle East and main offices in the US, Smart Pre-Construction offers many commercial property opportunities to the interested international buyer, while welcoming developers to market their new projects through a well-established company to a wider international buying pools.

to take advantage of these rock bottom prices

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Healthcare Related Commercial Real Estate

by Hamid Hakimi | Commercial Real Estate

Healthcare Related Commercial Real Estate

Commercial Real Estate and Healthcare Industry

After the collapse of the real estate and financial market of last decade, the new REITs concentrated on the acquisition of healthcare-related commercial real estate instead of piling up the residential real estate portfolios of the real estate boom era. As the residential real estate market plummeted to a historic low during the recession of the past decade, the commercial real estates also witnessed their fair share of the slump. Eventually, the ripple effects of the crash of the banking system and the real estate transferred to the retail industries. This resulted in the closing of many stores, malls and shopping centers due to the high vacancy rates of the past decade. The slumping Commercial Real Estate market did not end in the retail industry and spread through other segments of commercial real estate such as hotels and office buildings.

As the baby boomers reached the rate of 10,000 retirees per day, a considerable demand for healthcare entered the market that resulted in short supplies of such properties. For that reason, there was a noticeable increase in demand for the healthcare facilities, making the hot commodities while most other commercial real estate properties collapsing into the darkness of the recession. The demand for the purchase of healthcare-related properties, from active adult communities that offer onsite healthcare to Medical Office Buildings (MOB), Nursing Homes and Extended Stay Facilities, reached an all-time high and predicted to continue on this path for upcoming years. While the residential real estate investments for the Pre-construction Investment Clubs, Real Estate Investment Trusts (REIT) became a thing of the past, the new REITs were burn that is predominantly specializing in the healthcare sector. The latest acquisition of five MOBs by the REIT managed by Grubb and Ellis Healthcare REIT II for $44 Million is an example of what is up with the healthcare-related real estate industry.