Wednesday, April 4 -- 8:30 - 10:00 a.m. 

Cost: $10 REALTORS® and SAR Members/$15 All Others 

Mr. Hunter will take a look at the legal and practical means by which successful brokers and agents earn and collect commissions. 

Questions will be answered such as: What are the indicators of a well-written listing or representation agreement? How is a commission deemed legally "earned" and "payable?" How can collection be effected without legal hassle? What are the defenses a client may have against payment? And much more.    

• Nuances of discussing a property and dealing with a party's confidentialities
• The distinction between legitimate "puffing" or salesmanship and fraud or misrepresentation
• The relationship and risks of listing a property previously listed with another broker
• The importance of being the "procuring cause," even under an exclusive listing
• Repetition of a party's obligation to pay a commission - why, where and how?
• Understanding proper licensure and fiduciary duties
• How to prevent and/or deal with conflicting interests of the broker or other parties
• The key provisions needed in listing and representation agreements
• Q & A 
• Registration Form or call Brian at (916)437-1210  

NEW DEVELOPMENTS & GUIDANCE FOR KEY DEAL-MAKING DOCUMENTS 

New! A "Lunch and Learn" Seminar  

Wednesday, April 18 -- 11:30 a.m. - 1:00 p.m.
Speaker: Robert McCormick, Esquire
Cost: $10 REALTORS® and SAR Members/$15 All Others  

 
Come join us for a lively discussion that will keep you out of trouble at SAR Commercial's first "Lunch and Learn." Mr. McCormick will highlight current developments regarding Letters of Intent, Options and Purchase and Sale Agreements. 

Recent and significant legal decisions have affected deal-closing documentation for commercial real estate practitioners. These provisions will influence the remedies of your buyers and sellers and will impact your decisions and duties as you work towards closing your deal. Don't miss this very special one-time only presentation and the opportunity to learn more about:   

• "Free look"
• "As is" provisions
• Non-refundable deposits
• Liquidated damages
• Time is of the essence
• Duties to disclose
• Fatal flaws in documentation
• Use this registration form or call Brian at (916)437-1210 to register

Fascinating case studies which highlight errors in judgment will be reviewed. A Q & A session will follow the presentation. Keep yourself on the right track to success and register today! Pre-register to ensure that we have enough food and let us know in advance if you are a vegetarian. 

REGIONAL EVENTS

Sacramento region hotels saw an increase in occupancy in January, according to the latest research by PKF Consulting USA  in San Francisco.Occupancy was 59.1 % in January this year, up 7.7 % from 54.8 % occupancy in January 2011.

The region's hotels had an average daily room rate of $91.98 in January, down 1.6 % from an average daily room rate of $93.45 the same time last year.

Because occupancy went up, that means the hotel business was better this year in January compared to the previous year, though the room rate was slightly off. Revenue per available room was $54.32 in January this year, up 6 percent from the year-earlier revenue of $51.24. The Sacramento region generally does strong hotel room business during the week, and then has weak weekends. (Sacramento Business Journal) 
 

Where Should You Invest Now? -- Webinar
The last few months have seen increased political and economic volatility and raised new concerns about the recovery of commercial real estate. After accelerating in the first half of the year, transaction volume has now slowed. In the face of this, how should investors looking to buy commercial real estate deploy their capital?  Download here

Robert Knakal on Investment Sales -- Podcast
Robert Knakal, Chairman of New York-based Massey Knakal Realty Services, discusses institutional capital, trends in investment sales, foreclosures and delinquencies. Listen here

by Melanie Turner

Clean-energy markets continued to expand last year, even with a tough economic and political climate, increased industry consolidation and downward pricing pressures on manufacturers, according to a new report.

Combined global revenue for solar, wind and biofuels rose 31 percent over the prior year, growing to $246 billion in 2011 from $188 billion in 2010, according to the Clean Energy Trends 2012 report released Tuesday by clean-tech research and advisory firm Clean Edge Inc.

Double-digit growth rates for both wind and solar globally drove much of the expansion. Still, the report says it's less likely 2011 will be remembered for the industry's robust growth and more likely it will be remembered for the Solyndra bankruptcy. Solar, wind and biofuels all reached new market records in 2011.

"Last year saw many in the clean-tech community caught off guard, as the industry became a modern-day whipping boy," said Ron Pernick, Clean Edge Cofounder and Managing Director, in a news release. "The attacks, offered up in sound bite-sized nuggets delivered more for impact than accuracy, overlooked the fact that many clean-energy technologies are becoming increasingly cost-competitive, central to the expansion of energy markets in places like China, Japan, and Germany, and a critical hedge against more volatile forms of traditional energy." (Sacramento Business Journal)  Clean Energy
 

by Mark Heschmeyer

With increasing occupancies and rents, the multifamily sector has been one of the commercial property types to bounce back fastest from the effects of the 'Great Recession.' Yet, at the same time, the multifamily sector has been one of the worst performing property types in terms of delinquencies, a contradiction noted by Fitch Ratings.

Using the standard Fitch Ratings definition that counts any loan 60 or more days behind in payment as delinquent, the multifamily delinquency rate across the whole country was 14.4% at the end of 2011 but dropped to 12.8% at the end of January 2012.

Given the strong run-up in rents and investment, multifamily housing in CMBS transactions should be performing inversely to residential housing in the same geographic area. Multifamily performance should be strong where residential performance is weak and vice versa. As people lose their homes to foreclosure etc., one of their options is to move into rental housing, traditionally provided by multifamily apartment units. But as theories as tend to go, the data doesn't prove or disprove it.

Las Vegas is the worst performing city in the Case-Shiller 20 cities index. Home prices in that market are down 62% from their peak and down 9% in the year ended November 2011, according to Fitch. However, Nevada, which has $1.2 billion in CMBS multifamily loans, has a delinquency rate of 32.6%, making it the third worst geographic area for CMBS delinquencies. Las Vegas and Nevada thus seem to refute the theory about the inverse relationship. (CoStar) Multifamily Contradiction

by Michael Shaw

In a blow to real estate news across the state, the Construction Industry Research Board has decided to stop collecting and reporting data "due to the prolonged economic recession." Many people in the industry might not have been aware of the small non-profit in Burbank.

But for decades it has provided crucial building permit information culled from 525 California cities and counties and sent it free of charge to news outlets that requested subscriptions. Lots of for-profit enterprises "comp" their data for reporters hoping for publicity, but rarely is the material so comprehensive.

The reports covered all residential, commercial and public construction from roads and bridges to hotels and higher education facilities, all broken down by geographic region or county. It was the only source of comprehensive data on private nonresidential building permits.The nonprofit launched in 1974 to provide statistics on the California construction industry. It has been funded by grants from construction industry advancement funds, member subscriptions and the sale of data.

The organization became part of the Building Industry Association of Southern California in 2007 and its data was used by the California Building Industry Association to report housing starts through building permits. It's unclear whether those affiliations will continue or if CIRB will continue in another capacity. 

The Pension Real Estate Association's most recent consensus forecast survey indicates investors are expecting total returns of 9.3 % in 2012 - a 140 basis point increase from what the survey indicated three months ago.

PREA surveys a subset of its member firms about their forecasts of the U.S. commercial real estate markets. PREA surveyed 22 firms in the first quarter, representing investment managers, advisors and researchers.

While the expected returns figure is up from the previous quarter, it is in line with the long-term average return to the NPI. According to PREA all four property types saw their average forecast return for 2012 improve from last quarter's survey. But despite of the increased bullishness for 2012, the average forecast still predicts a gradual slowing in returns through 2013 and 2014.

Apartments are expected to remain the hottest sector with projected total returns of 10.9 %. Respondents expect a 5.5 % appreciation return and a 5.4 % income return for the sector. In the other sectors, respondents expect higher income returns in 2012 compared with apartments, but lower appreciation returns.

Respondents expect the retail and office sectors to each return 8.9 %. Industrial, at 8.4 %, was the laggard. According to PREA, "Overall, forecasters are predicting a year with returns down significantly from last year's excellent results but see good, if not exceptional, returns for 2012. After this year, however, a further slowing is predicted with returns at levels below the long-term average over the next two to five years." (National Real Estate Investor)
 

2011 SAR COMMERCIAL DIVISION  SPONSOR

ATC ASSOCIATES: TOOLS SUPPORT COMMERCIAL REAL ESTATE LENDING

ATC Associates, with seven California offices, was one of the sponsors of the SAR Commercial Division in 2011. The services of ATC, which stands for Assess, Test, and Consult, can be extremely important for the commercial real estate market.

ATC Associates is a national consulting firm specializing in environmental consulting, industrial hygiene, geotechnical engineering, government services, construction materials testing and special inspection services throughout the United States. Services include due diligence and industrial hygiene/building construction services.

When negotiating a commercial real estate transaction, due diligence prior to the property transfer is a necessary and vital part of the process.  It ensures that the purchaser knows up front whether there are environmental, seismic and/or building-related factors that may adversely affect the property and ultimately increase liability. 

ATC's industrial hygiene services can provide an owner and/or property manager relief from many issues associated with the operation and maintenance of a building, including indoor air quality issues, mold growth as a result of water intrusion, etc.  Additionally, when tenant improvements are required, ATC can assist by providing hazardous materials surveys to determine the presence of asbestos, lead-based paint, PCBs, mercury, etc. that may be disturbed during construction.  If such materials are identified, ATC can prepare abatement specifications for use by the abatement contractor and provide oversight, monitoring and clearances during and following abatement.

More information about all the services offered by ATC Associates is available at www.atcassociates.com or by calling Beverly Long, Northern California Client Service Manager, at (925) 580-2452.  Founded in 1982, ATC is headquartered in Lafayette LA, with 72 offices and over 1,500 employees nationally, including seven California offices: Sacramento, Modesto, Pleasanton, San Diego, San Luis Obispo, Monterey Park and Sierra Madre. 

It's not a big hook to hang a hat on, but the small increase in some commercial real estate loan balances on bank books at the end of the year serves as yet another indication of thawing lending markets for property investors.

Overall loan balances on bank books posted their largest real growth in four years, according to year-end numbers released this past week by the Federal Deposit Insurance Corp. (FDIC). As far as CRE lending goes, it was a 50/50 split between good and bad news. Total loans outstanding for owner-occupied CRE and multifamily properties saw a modest increase year over year -- from $452.6 billion to $457.2 billion for owner-occupied and from $212.7 billion to $218.5 billion for multifamily.

However, those small increases were offset by a minor dip in multi-tenant CRE property loan balances and another huge drop-off in construction and development lending.

Take out the 25% year-over-year decrease in construction and development loan balances and CRE loan balances increased $4.2 billion. This isn't much but it was the first such increase since 2009. Residential mortgage loans also increased by $26 billion (1.4%), following a $23.6 billion increase in the third quarter. (CoStar) Banks Returning to CRE Lending

by Michael Shaw

 
Foreclosure activity in Sacramento during February fell when compared with the same period a year ago but remained largely unchanged from January, according to figures released Thursday from RealtyTrac, an online foreclosure information company.
 
Foreclosure notices of all types - notices of default, notices of foreclosure sales and lender repossessions - were down 8.8 % from a year ago and totaled 4,145 for the four-county Sacramento region. That¹s a rate of one notice for every 210 households in Sacramento.
 
Of those notices, 1,001 were bank repossessions. In January there were 4,179 notices of all types and 997 repossessions. The national rate was one in every 637 U.S. housing units with a foreclosure filing during February. Filings were down nationwide 8 % on a year-over-year basis. (Sacramento Business Journal)

Big changes are roiling U.S. biotechnology and life sciences companies -- and by extension the real estate owners that rent them with lab, R&D and manufacturing space -- with pressures from global markets and regulatory and economic uncertainty causing tenants to rethink their property footprints and expansion plans, and even downsize in some cases.

While the changes over the last five years have inevitably created volatile market conditions for owners and developers of life science real estate, the best assets in the prime biotech clusters of the U.S., including Boston/Cambridge, New York, the San Francisco Bay Area, San Diego and the Research Triangle of North Carolina, appear to have withstood the recession and unsteady recovery fairly well, especially as compared with the larger office and flex space property markets.

According to CoStar data, the number of office/flex sales transactions involving biotech, lab and R&D space actually saw five quarters of growth between mid-2010 and mid-2011, when the downturn was falling hard on most office landlords. Like other property types, the number of deals has fallen slightly over the last two or three quarters, reflecting the uncertainty of the broader U.S. and global economy, the slowed pace of capital markets and uncertainty of future government financing for biotech research and development. (CoStar) Biotech Labs

The federal government forecasts that health care will be the top growing employment field in years to come. On Numbers, a daily demographics blog from American City Business Journals, takes a look at where jobs will be in the future.
 
A total of 5.6 million jobs will be created in the health-care and social-assistance field between 2010 and 2020, according to U.S. Bureau of Labor Statistics. No other industry is expected to generate more than 3.8 million new positions over the 10-year period. (Business Journals)

by David Bodamer

Distressed buying opportunities have been slow to emerge since commercial real estate values peaked in 2007. A predicted "tsunami" of distressed assets never hit the market. But today -- five years after values peaked -- investors are expecting more opportunities in the nonperforming market as loans underwritten at the peak of the market hit maturity dates. 

That's one of the findings in Ernst & Young LLP's 2012 real estate nonperforming loan investor survey. The report, entitled "At the Crossroads," finds that even though many banks have repaired their balance sheets, increased their earnings and seen declining loan loss reserves, the volume of commercial real estate loans coming due in the next five years could lead to banks putting more nonperforming loans (NPLs) on the market.

To date, the distressed market has not been as robust as many expected as banks have employed "pretend and extend" strategies. Financial institutions held assets on their books to buy time for a recovery in the broader economy and the commercial real estate sector. "As a result, banks have sold only a small percentage of their NPLs, and with approximately $300 billion in non-accrual and restructured loans still on their balance sheets, they still have a long way to go to alleviate the problem". (NREIOnline) Nonperforming Loans Market