ARE YOU "IN THE GAME"?

Buyers and sellers of commercial investment real estate in Utah are bullish compared to last year at this time.

Total activity in industrial investment sales in Salt Lake County was $63 million dollars at mid year 2012, which  tripled mid year 2011 totals. Over 1 million square feet has traded hands this year versus less than 500,000 at the same time last year.

The combination of low interest rates and cap rate compression is providing a rare opportunity where both buyers and sellers can meet each other on the playing field and both win.

If you have been thinking about buying or selling commercial real estate here in Utah or somewhere else in the nation call IPG Commercial Real Estate for honest and thoughtful suggestions on your specific situation.

ENERGY EFFICIENCY RETROFIT MARKET EXPECTED TO DOUBLE BY 2020

Something to keep an eye on related to commercial real estate in Utah is the trend to retrofit existing buildings to make them more energy efficient. According to Pike Research’s report released today the global market for these retrofits is expected to increase from $80.3 Billion in 2011 to $151.8 Billion by 2020.  According to an analyst quoted in the article, “Retrofitting existing buildings offers one of the most cost-effective ways for a business to reduce operating expenses…a growing number of financial instruments are deepening the scope of energy efficiency retrofits, driving continued investment in energy efficient HVAC, lighting, and control systems.” Locally, many companies are finding value from the incentives offered for upgrading lighting from Rocky Mountain Power. Check out some of the current incentives at http://www.rockymountainpower.net/res/sem/epi.html .

Link to Article:

http://www.pikeresearch.com/newsroom/the-market-for-energy-efficiency-retrofits-in-commercial-buildings-will-nearly-double-by-2020-reaching-152-billion-worldwide

PSYCHOGRAPHICS

Ever heard of the term psychographics? It's the psychology behind demographics and it is a fairly fascinating concept. The basic idea is that "birds of a feather flock together" or in the case of people, like minded people tend to live and shop and work together. And, when people live and work and shop together, their real estate needs shape the physical environment and community around them. Experts have been studying the life patterns, lifestyles, and habits of mass groups of individuals for decades. More recently, demographic data has been matched up with credit card expenditure data and the resulting patterns can actually be mapped with GIS data into what is called a Community Tapestry map. If you understand your clients and customers well, a Community Tapestry Map can give you one more tool to use when its time to locate your business in a great commercial real estate location. Some go so far as to say, it's not location, location, location anymore, its location, demographics, and timing. 

INDUSTRIAL REAL ESTATE POISED FOR GROWTH?

This week the Industrial and Logistics group at Jones Lang Lasalle outlined five factors that are making the U.S. industrial market resilient and attractive for new investment. “Low U.S. interest rates, positive economic indicators and an increasing demand for prime, well-located logistics property are some of the other elements bringing focus to U.S. industrial assets such as warehouses and distribution centers.” They continued, “other factors such as the revival of the U.S. manufacturing sector, the trend toward on-shoring manufacturing back to the U.S., and the demand for big box distribution space by the thriving e-commerce sector, are driving developers and investors toward U.S. industrial real estate.” While these market forces are expected to have more impact on coastal and near coastal markets, these factors will also help industrial real estate in Utah as companies continue to position themselves for the growth expected in the intermountain west.

Link to Article:

http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/Newsitem.aspx?ItemID=25647&utm_source=homepage&utm_medium=web&utm_campaign=homepage

SHOULD I STAY OR SHOULD I GO NOW?

Interest rates are at an all-time low. Taxes are very likely to increase. So, in terms of commercial real estate, is it time to buy or is it time to sell?

For buyers of investment property in Utah the difference between interest rates and current cap rates is currently providing a unique market opportunity. Borrowers obtaining money at 4.5% on properties with a 7.5% cap rate are looking to cash in on a rare opportunity.

For Seller’s looking to convert long term assets to cash, it’s hard to imagine a future without higher taxes. In fact, without new legislation to the contrary, taxes will increase on January 1st 2013.

If you are considering a commercial real estate investment opportunity or considering an exit strategy, give us a call, we would be happy to help you decide if you should stay or go now.