A Legal Perspective and Review of the California Association of REALTORS (C.A.R) Commercial Property Purchase Agreement

This class will review the C.A.R approach to commercial purchase and sale transactions embodied in the C.A.R Commercial Property Purchase Agreement (CPA). Bob will provide a practical guide for the use of the C.A.R.-CPA form plus identify the strengths and weaknesses of this form in comparison to the AIR form and custom attorney-prepared documents. 

Attendees will get a better understanding of the special aspects of commercial real estate purchase and sale transactions that should be considered when choosing a purchase and sale agreement form and be able to determine when it is appropriate to specifically utilize the C.A.R.-CPA. Call Brian DeLisi to register at (916)437-1210 or use this Registration form.

SPONSOR HIGHLIGHT

TWO MEN AND A TRUCK® ARE THE "MOVERS WHO CARE"

With more than 230 locations, TWO MEN AND A TRUCK®

is the largest franchised moving company in North America. Founded in Michigan in the mid 1980's, the moving company has established a reputation across the country as the "Movers Who Care®" for its continuous commitment to supporting local non-profit organizations through donated moves and charitable initiatives.

The company's most notable and widespread charitable initiative is its Movers for Moms® program, a campaign working with local schools and other community organizations to collect essential supplies to donate to moms living in shelters on Mother's Day. Started by the moving company's Michigan franchises in 2008, Movers for Moms® has expanded to 31 states in 2013. Last year, more than 115,000 items were donated to over 100 women's shelters across the country on Mother's Day.   

 
Locally, TWO MEN AND A TRUCK® Sacramento donates hundreds of hours of moving each year to assist local nonprofits. The Sacramento location is partnering with WEAVE, a primary provider of crisis intervention services for survivors of domestic violence and sexual assault in Sacramento County, during the Movers for Moms® campaign.

From the SAR Commercial Division, thank you to TWO MEN AND A TRUCK®  for contributing to the growth of our organization. If you would like to contact them to donate items (donations are currently being accepted at the SAR office) or to get additional assistance on how they can help you with you commercial or residential real estate relocations, visit the TWO MEN AND A TRUCK® office at 8167 Belvedere Ave Suite D in Sacramento or call (916)852-7411.  

by Anand Patel

The invention of the DVR was a beautiful thing. According to ACNielson, the marketing research firm, by 2011 more than 40% of U.S. households had DVRs giving families the ability to breeze right over TV commercials and get right back into their favorite shows. Who wants to watch annoying commercials for products and services you have no interest in, right?

by Bendix Anderson

Tenant satisfaction was higher in 2012 than in 2011 in almost every major office market in the United States. Only in Atlanta did the proportion of satisfied tenants decline during 2012-from 90.1% to 87.9%, a figure that still betters the national average. 

"This unprecedented rise in satisfaction tracks well with what we hear from owners and investors," said Jim Woidat, Principal of Kingsley Associates. "Throughout the recovery, building owners and managers have turned their focus from asset appreciation back toward operations. This has led naturally to better customer service delivery aimed at tenant retention." 

This importance of retention has become especially pronounced because of the sluggish pace of employment growth. Alternative work arrangements are particularly apparent in certain parts of the country. Employees of tenants in Atlanta, Boston and San Francisco are more likely to work from home on occasion, while those in New York have a higher propensity to share workspace. 

Kingsley Associates surveys office tenants representing over 1 billion square feet annually on behalf of its clients. The findings outlined above are based on responses received between January 1, 2012 and December 31, 2012. For additional data and analysis, see Kingsley Associates' Q4 2012 Office Trends.  (CoStar) 

Commercial real estate executives are optimistic about the state of the market but remain wary of the repercussions of potential interest rate hikes, lackluster job creation, and the massive U.S. debt, according to Real Estate Roundtable's 1Q13 survey. "As today's survey shows, commercial real estate is on the mend, but it remains a fragile recovery very specific to property type and individual markets," says Robert S. Taubman, President and Chief Executive Officer of Taubman Centers.

Equity, valuations and capital availability for class A real estate in gateway markets have recovered much faster than lower-rated assets in smaller markets. Despite the sluggish recovery in secondary and tertiary markets, 8% of survey participants consider market conditions somewhat better than last year, and 16% predict even better conditions in 2014. However, executives point to future job creation and predictability in public policy as key to prevent looming economic uncertainties from derailing an already bumpy recovery (CCIM). 

Commercial real estate continues to improve at a moderate pace, much in line with previous forecasts.
 
The office market enjoyed 11 consecutive quarters of occupancy growth and eight straight quarters of rent increases," according to the Jones Lang LaSalle firm. The length of the expansion is more noticeable than the strength of the expansion. REIS Inc. reported national figures for office vacancy that are only slightly lower than a year ago.

Jones Lang LaSalle also reported that most of the improvement is in Class A space, which confirms the anecdotes heard around the country: the only challenge for tenants is finding large contiguous Class A spaces in downtown areas. DeLoitte's annual commercial real estate survey notes low construction levels in office space, which should bode well for landlords' future occupancy and rent rates.

Before we get too overjoyed, note the limiting factors on the office rebound. First, the pace of economic growth is subdued, with a risk of recession large enough to demand concern. Second, high tech is a growing element of office occupancy. The software industry's preference for putting many programmers in one large room cuts the square footage per worker. It may not be justified on productivity grounds, but the open workspace concept is so established in the software industry that it's not going away any time soon.

Industrial space is starting to expand, with more new deliveries than in recent years. Industrial typically has the shortest development and construction periods and thus is the first sector to complete new projects when the market improves. This trait means that vacancy rates will not fall too far, nor will rents rise too fast. Still, increased volume of rented space will help the large landlords improve their efficiency, though it does little for owners of one or two properties who must compete in a market with growing supply.

Retail space is seeing more absorption than construction, but there's plenty to worry about. Retail spending has only increased 4.4% in the past 12 months; a year ago we saw a 6.2% gain, and a year before that a 7.8% increase. Our recent figure is certainly an increase, but not terribly fast, especially in light of two percent inflation. Looking forward, the end of the temporary payroll tax cut will pinch a number of wallets. (Forbes) CRE Forecast Update

The Associated Building Contractors Association reports that its Construction Backlog Indicator (CBI) expanded for the second consecutive quarter, up to 8 months in the third quarter of this year, a 3.5% increase from the previous quarter. CBI is measured in months and reflects the amount of construction work under contract, but not yet completed.

"While the nation's nonresidential construction activity is likely to remain subdued as we approach the final months of 2012, the CBI is signaling that nonresidential construction spending will accelerate by mid-2013," said ABC Chief Economist Anirban Basu. "However, this presumes the nation does not tumble over the fiscal cliff-a series of spending cuts and tax increases that kick in at the end of the year.

"Another recession would undermine the momentum of an already struggling construction industry," Basu said. "The recovery in construction backlog, and in overall construction spending, would likely be more rapid today if not for the elevated level of uncertainty facing economic decision-makers.

"What the CBI data tells us is certain industries and geographies will be associated with more robust construction spending recovery, including segments related to energy generation, health care and infrastructure," said Basu. "CBI dynamics also seem to suggest the latter half of 2013 may be associated with more rapid growth in construction spending than the first half of the year." (Associated Building Contractors)  Construction Backlog

A new annual report produced jointly by Real Estate Research Corporation (RERC), Deloitte, and the National Association of REALTORS® (NAR), entitled "Expectations & Market Realities in Real Estate 2013 -- Turn the Page", indicates that commercial real estate investors have been frustrated over the past five years and are ready for things to return to normal. The problem is, the current environment is the new normal and commercial real estate investors will need to adjust to the new reality if they expect to profit moving forward. 

Based on data from the report, investors are now coming to this realization and are now looking for the best ways to participate in this new commercial real estate environment to maximize their profitability and yields.

"It is time to stop waiting for the economy and the investment environment to get better. This is it -- this is the new normal -- and we need to turn the page on the past and make the adjustments needed to be successful for the balance of this decade," stated Kenneth Riggs, Jr., Chairman and President of RERC. "Investors are facing the challenges ahead, and commercial real estate continues to be an attractive investment for a variety of reasons in this economic climate."

Genesis President Terry Robinson agrees. "Things changed dramatically in 2008, and many thought we would get back to normal in a year or two," Robinson said. "This hasn't happened and there has been a shift. Genesis addresses the change through our off market approach, but we do see that not all buyers or sellers have faced reality yet."

In the recent study, the three contributing organizations drew on their individual strengths and expertise in the commercial real estate markets to provide an assessment of the commercial real estate markets in light of capital availability, the economy and existing trends. The report is an analysis of this data that provides an outlook for commercial real estate in the U.S. for 2013 and beyond. (PRWeb) What is the new normal 

Last May, the California State Teachers' Retirement System (CalSTRS) paid roughly $800 million for a majority interest in LCOR, an investment, management and development firm whose portfolio includes 7,400 multifamily units, 7.7 million sq. ft. of commercial space and multiple development projects.

In June, the California State Public Employees' Retirement System (CalPERS) plunked down $100 million for one-third of Bentall Kennedy, a real estate investment advisor with $8.4 billion in U.S. assets under management.

These deals, and many more, have come just a few years after pension funds lowered return expectations for commercial real estate investments and revamped the criteria for qualifying the success of a buy to include measures such as potential liabilities and future cash flows. But with fundamentals improving across property types, institutional investors, like everyone else, want to take advantage of microscopic interest rates when placing their money.

Today, U.S.-based public pension funds have 6.8% of their total assets, or an average of $758 million, allocated to commercial real estate, according to London-based research firm Preqin. Private pension funds have 5.2% of their assets, or an average of $434 million, tied up in real estate investments. Endowment plans have allocated 6.1% of their money, or $143 million, to commercial property. (NREIOnline) Pension Endowments