Commercial Real Estate Loans & Investment Sales

Are Commercial Real Estate Loans Hurting Banks?

Article By Sue Kirchhoff Via USA Today

Commercial real estate has surged after several down years.  But it's worrying federal officials, who note many banks are carrying a heavier concentration of real estate loans today than they did during a heady 1980s boom — a boom that ended in a bust, forcing many lenders out of business.

Nationally, in the mid-'90s, 15%-20% of federally insured banks had what regulators consider a heavy load of commercial real estate loans. In 2005, it was 40%, the FDIC says.

Tightening Loan Standards
Determined to avoid a reprise of the 1980s, regulators are tightening standards for commercial real estate lending. While such loans are generally performing well and bank profits are healthy, Bies and other officials warn that the industry is entering a time in which problems are most likely to crop up. Interest rates are rising and a wave of just-completed office, condo and other buildings are coming to market, which could affect rents and prices.

Construction Picking Up
Commercial real estate slowed several years ago but has been coming back. U.S. office vacancy rates, now the lowest since the 2001 recession, will average 11% by the end of 2006. That's down from more than 14% in 2005.

Taking Account of Risks
Overbuilding can force down rents. Rising interest rates may make it more difficult to sell a property or complete a project. Foreign capital and pension funds chasing investment properties, along with banks competing for business, may push prices too high and erode lending standards in some areas.

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For more information on commercial real estate loans from Pacific Security Capital, visit www.pacificsecuritycapital.com or call 1-800-844-6085.

Mexico - Hot Market?

Mexico could be the new place to invest, according to an article last week in the San Diego Source.

With low cap rates and high real estate prices dominating the US market, more and more investors are snapping up real estate in Mexico.

Add to that the current health of the peso against the dollar, Mexican property is looking very tempting to the US investor.  Why is the peso performing so well?  Increased exports, low interest rates, availability of cheap labor, ties to the U.S. economy and an inflow of funds from a rise in the price of international commodities, including oil, are all contributing to a healthier peso.

However, owning land in Mexico is still complicated by mounds of red tape.  To own real estate in Mexico, a US company must first become a Mexican company and pay taxes to the Mexican government, not the US.  Commercial properties are typically secured by a guarantee trust, not a deed of trust.

To avoid becoming bogged down in red tape, many US companies have decided to partner with Mexican firms in place of becoming one.  This means that Mexican investment firms are suddenly seeing their project portfolio double in size.

Read more in the San Diego Source.

For more information on emerging markets, contact Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085.

Pacific Security Capital Develops EdenRock at PGA West Community - Commercial Real Estate Services Firm Builds in CA Hotspot

Beaverton, OR, May 9, 2006 -- http://www.pacificsecuritycapital.com – Pacific Security Capital, a vertically integrated real estate services company, has announced its plans to construct a new community in the premier PGA West area of the Coachella Valley, CA.

Pacific Security Capital acquired the last 42 acres of land at PGA West and has partnered with award-winning architect, Mark Sheurer and GMA International, an internationally recognized land development consulting firm to design EdenRock, a Tuscany village style community. Upon completion, Pacific Security Capital expects EdenRock to be valued in excess of $200 Million.

“We expect EdenRock to attract second home buyers from all over Southern California and the Pacific Northwest,” said Louis Swart, President of Pacific Security Capital. “EdenRock will be a high quality development that will have long lasting real estate value and will be a credit to the PGA West community.”

Pacific Security Capital plans to build 292 high-end homes at EdenRock using 3 product types:
•    88 Courtyard Homes (between 1600 & 2500 sq ft)
•    81 Manor Homes (between 2300 & 2800 sq ft)
•    128 Village Homes (between 1100 & 2300 sq ft)

Each home will have a 2-car garage plus golf cart storage. There will be a 7,000 sq ft clubhouse available to residents and the community will be gated and manned at all times.

“The name EdenRock comes from ancient Coachella Valley history,” said Swart, “500 years ago, the Cahuila Indians lived in this area and referred to it as their Garden of Eden.”

For more information on the EdenRock at PGA West development, visit http://www.edenrockhoa.com/

To learn more about Pacific Security Capital’s core areas of expertise in Commercial Real Estate Advisory Services, Capital Markets, Development Services and Investment Sales, please visit www.PacificSecurityCapital.com or call 1-800-844-6085.

Is The Commercial Real Estate Industry Too Hot?

Like many cities across the nation, Portland's lending industry was hot during 2005.  Federal officials are now worried that the heat may be too high.

Federal officials warn that institutions with high concentrations of commercial real estate loans will be susceptible to the risk of market volatility.  Despite industry caution, Portland-area banks and developers continue to be optimistic about the forecast for commercial real estate in 2006.

View "Lending market still cooking for commercial real estate" in the Portland Business Journal.

For more information on commercial real estate loans from Pacific Security Capital, visit www.pacificsecuritycapital.com or call 1-800-844-6085.

Tips For Investors

Article By Michael Corkery and Kemba J. Dunham Via RealEstate Journal

With new-home sales slowing in some parts of the country, investors are anxious to know which builders are prepared to ride out the storm. Figuring that out, though, can be tough because industry analysts are all over the map.

Here are some tips for those looking to invest:

• Look for companies with the best business models in the best markets
• Property location is key
• Consider price points
• Analyze the industry as a whole
• Look at home builder management and quality
• Who is the builder's target buyer?

Read the full article here >

For more information on commercial real estate advisory services from Pacific Security Capital, visit www.pacificsecuritycapital.com or call 1-800-844-6085