E-News Solutions Newsletter - April 2011 Edition

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April, 2011

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Dear Real Estate Enthusiasts,

Pent up demand. You have no doubt head the term. For three years or so, new speculative commercial real estate projects have all but ceased. With no new inventory coming on line, and prices hitting bottom, we are poised for the next boom. It may not be an "explosive" boom. But if you own commercial real estate, you will benefit. If you don't, you won't. See Kaplan's article for a more in depth treatment. If you've been on the fence, now's the time to get off.

We postponed our auction last month as we didn't have a sufficient number of registerd bidders. We will try again May 25.

Our new website is getting positive reviews. It is more user friendly and allows you to search all commercial properties , not just Premier listings, in the Midwest Real Estate Data System. Check it out: www.premier-comm.com . Tell us what you think.

Sincerely,

Bruce Bossow

Bruce Bossow

Starting a Business In Illinois

By: Bruce Kaplan

We are on the front lines when it comes to talking to would-be entrepreneurs about starting a new business. Many times people come to us looking for a space to lease before they have done their due diligence. Some people have had this dream about starting up a business but they have no clue as to how to go about it. Doing a business plan, where to obtain financing, etc are aspects of this process that are often overlooked. We recently discovered that there is a great resource in our own backyard for helping people thru the initial process of understanding the components of starting a business. There is a two hour seminar conducted at The Small Business Development Center (The Shah Center) in McHenry. Classes are held monthly on Wednesday evenings from 6-8 PM. The fee is only $25. A more detailed series of classes is offered called the CORE Four Business Planning Course which is described as a turn-key curriculum to help you learn the steps to becoming a small business owner. It has been dubbed as "The Entrepreneur's Bible" and is designed for both novices and experienced entrepreneurs. The 4 2-hour classes are 1) Success Planning, 2) Market Planning, 3) Cash Flow Planning and 4) Operations Planning. The fee for this is $160 and the next class starts on July 12. For information, call Holly Wendt at 815-479-7823 or email hwendt@mchenry.edu.

Real Estate Prices - Have They Hit Rock Bottom?

By: Bruce Kaplan

Commercial real estate values have been the victim of a convergence of negative economic forces over the last three years. Unlike the recession of 1979-1981, interest rates are not the culprit. Lost jobs of 7.5 million Americans has taken the demand out of the supply and demand equation while availability of capital, until recently, had all but dried up. Vacancy rates for all commercial property types have soared as a result, causing values and rents to plummet. If you've been paying attention, none of this is news to you.

To watch commodity prices go through the roof while commercial real estate prices are kicked around like a dog (for the record, I don't kick my dog) has been a painful experience. Gold and silver, oil, copper, sugar, wheat, etc are all blowing the doors off of their former price points. This condition is said to be setting up an inflationary period in our near future. That will force real estate prices to resume their normal upward trend. If you can hold onto your commercial real estate long enough, it will provide you with a hedge against inflation. If you don't have any commercial real estate in your portfolio, you will lose out on the benefits.

Investors See More Gains For Office Building Values
(Crain's) - Investors predict the value of Chicago-area office properties will improve this year, another sign that the gloom is lifting

By: Colleen Lobner April 11, 2011

Office buildings will get a 2.5% boost in value over the next 12 months, according to the PwC Real Estate Investor Survey, a first-quarter report compiled by PricewaterhouseCoopers LLP.

The survey, which tracks 18 major markets, again places Chicago in the middle of the pack in terms of overall valuations. Manhattan will see the strongest rise, with a 5.75% value gain predicted for the next year, followed by San Francisco and Washington D.C.

Meanwhile, values are forecast to fall as much as 2.2% in Boston, Dallas and Southeast Florida, the report says. The office market in Phoenix is expected to fare the worst, with a 6.2% decline.

Commercial property values have rebounded over the past year as the fear triggered by the financial crisis has receded, drawing investors and lenders back into the market. In fact, other data suggest that local office values likely have already seen their biggest gains of the current cycle.

Stay Positive and Be Yourself My Friends

Shared by: Izzy Eichenstein via LinkedIn Blog

You know the beer commercial that says "Stay Thirsty My Friends" I suggest a "Stay Positive My Friends" mantra , it can be a difference maker.

It has been very challenging for many of us in real estate to stay positive and upbeat. We have all complained about the banks, the market, etc.....but we should try to stay positive by turning negatives into positives. So much has been accomplished by people turning negatives into positives. Its creativity at its best.

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