http://markp.cbvegas.com/blog/archive_201008/sort_entrydatetime-desc/ We have discussed the buyer-seller disconnect several times. Few commercial transactions have been consumated in the past couple of years as sellers have either refused to lower prices due to a different read of the fundamentals, they cannot liquidate due to capital constraints (writedowns for bank owned) or that they simply do not understand what they own or just replace number driven judgements with hope. Similarly, some buyers are unrealistic about pricing. They often believe that everything is distressed and can be obtained at a price below the appraisal or opinion of value. This is often stemming from the belief that fundamentals are still too weak or declining. Owner-users do appear to have a higher willingness to pay for commercial space, however they are not the largest component of the potential buyer pool unless we are talking about smaller spaces or some improved frontage since most of the space that is being purchased or leased in the result of owner/tenant churning within the Valley as firms attempt to either lower their occupancy costs or find a higher traffic area. Overall absorption of vacant space has still not turned positive.So what has to happen for transactions to occur? Like housing, prices should decline as values are reset to new fundamentals. Interestingly, Moody's is measuring an increase in transactions as prices have fallen, with volume increasing from $2.1 billion from $1.5 billion for the month of June year-over-year (housingwire.com). Such price declines are necessary before any bottom can be obtained and the subsequent recovery can begin. The recovery cannot begin when nobody knows the price of anything.Source:http://www.housingwire.com/2010/08/20/commercial-real-estate-hit-with-41-price-drop-and-soaring-delinquencies http://markp.cbvegas.com/blog/847/adjustment-in-commercial-real-estate/ Mon, 23 Aug 2010 09:48:02 -0800 We have a bit of a fascination with real estate price indices. This is simply because of the disparity in different measurements. At Market IQ, we tend not to like average prices since averages are sensitive to outliers. However, when we go out with buyers and look for homes, we tend to "feel" the average more than any other number so it does have its utility in describing the market. Medians are useful but imperfect as well since like averages, they are affected by the changing mix of home sold in each sample period, such as size, age, finish level, location. We find repeat sales measures to be more realistic in explaining the trend since median prices have masked a lot of the same home price changes, especially as builders began making smaller homes on very compact lots. These are indices however so they are a little esoteric for folks who are not numbers junkies. In addition, Morgan Stanley has noted that an increase in the prevalence of short sales, which we find to sell for higher prices than bank owned homes, are causing the Case-Shiller, RPX and Morgan Stanley's own index to jump so severely in some metros that it just didn't seem realistic. The Morgan Stanley analysts question the validity of these measures for looking at national trends (from housingwire).The Las Vegas area has had enough REO (bank owned) activity to keep pressure down on the indices so we never noticed anything as severe as the changes in the San Francisco trends, for example. I am considering building a "constant quality" index that will attempt to control for whether or not the sale was a short sale, REO or equity seller.CoStar has also developed repeat sales indices for Commercial real estate. This is a very welcome development and I am glad CoStar has taken this mission since it is certainly not easy work. Previously, we had noted the Moodys/REAL Commercial Property Price Index and it is nice to have an alternative to check against. These indices tend to be a little bit too regionally broad for our local use since our CRE is so related to the gaming industry rather than international trade or manufacturing, however, institutional investors might find this useful.                                 Source: CoStar.Sources:http://www.housingwire.com/2010/08/04/for-investors-sake-morgan-stanley-questions-power-of-home-price-indiceshttp://www.costar.com/about/article.aspx?id=7719 http://markp.cbvegas.com/blog/816/more-on-repeat-sales-indices/ Mon, 09 Aug 2010 05:15:25 -0800 Coldwell Banker Premier Realty Commercial Agent Honored Second Time as the U.S. Small Business Administration's ChoiceFor only the second time during this current commercial real estate market challenge, the SBA lists another building for sale -- opting to work with the real estate profession who represented the agency previously Las Vegas -- Aug 04, 2010 / (http://www.myprgenie.com) -- Ron Opfer, Director of Commercial Real Estate Special Asset Solutions with Coldwell Banker Premier Realty, was chosen for the second time in as many years to represent The Small Business Administration (SBA) in the sale of another commercial property. The asset is a one-story office building of approximately 7,760 square feet, located at 145 Panama Street, Henderson, Clark County, Nevada (89015).Opfer credits his appointment to his prior experience with the municipality, and his extensive knowledge of the commercial real estate market -- especially his expertise in the City of Henderson's new redevelopment program. "My business is about relationships and providing clients the best solutions in a seamless service environment. It is a real privilege and honor to be selected to manage the listing for this prominent Federal agency, not once but twice," said Opfer. An eight year affiliate with Coldwell Banker Premier Realty, Opfer began his career working in several family owned businesses here in Southern Nevada and previously provided asset valuations for the City of Henderson's Redevelopment Agency. Molly Hamrick, President and COO of Coldwell Banker Premier Realty, expressed her congratulations saying, "We are extremely proud of Ron's hard work and dedication to the SBA. His confidence, attention detail and high professional standards are the service attributes that continue to make CBPR the broker of choice."The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation in today's global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam. The property in Henderson is the only SBA real estate holding currently in Southern Nevada.Coldwell Banker Premier Realty is headquartered at 8290 W. Sahara in Las Vegas, and is ranked among the nation's leading brokers in sales and innovation. The company is ranked number 8 out of more than 1,200 Coldwell Banker companies nationwide. Acquired by Bob and Molly Hamrick in 1998, CBPR has three offices in Southern Nevada (Summerlin, Henderson and Centennial Hills) and presently has over 300 affiliate agents. Ron Opfer, a Clark County resident since 1979, makes his home in Henderson, Nevada and also works in the CBPR Henderson office. Mr. Opfer is immediately available for interview upon request by any interested media outlet. http://markp.cbvegas.com/blog/799/cbpr-agent-ron-opfer-honored-as-the-us-small-business-administration's-choice/ Wed, 04 Aug 2010 03:29:41 -0800