Commercial Real Estate Loans & Investment Sales

Slowing Sales Foretell Weakening

Article By Ryan Chittum Via RealEstate Journal

Rents at shopping malls rose in the second quarter at their fastest clip in nearly three years, and strip malls posted solid increases as vacancies decreased in both sectors, a survey shows.

But weakening second-quarter retail sales have damped growth and could slow it further in later quarters as economic pressures squeeze consumers. For the second straight quarter, absorption -- the net change in occupied space -- showed signs of weakness. Tenants absorbed 4.9 million square feet in the period, up from 3.3 million in the first quarter, but well below the two-year average of about seven million square feet per quarter.

Retail sales moderated due to a variety of pressures, from high energy prices to rising interest rates and a slowdown in the once-booming housing market.

See full article >

For more information on Retail Loans from Pacific Security Capital, visit www.PacificSecurityCapital.com or call 1-800-844-6085.

Commercial Real Estate Market Still Hot

According to a recent article in the Wall Street Journal, the commercial real estate market is still going strong.

Factors contributing to the strong commercial real estate market include:
Consistent consumer spending (good for retailers)
Increased business travel (good for hotels)
Rising land costs have slowed down office construction (vacancies remain low)

Rising interest rates may have little impact on the commercial real estate market, says the Wall Street Journal.  Many investors are institutional meaning that they already have large amounts of cash to play with and do not need to borrow money.

Full article available in the Wall Street Journal.

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

Debating the Real Estate Bubble

According to today's Sun Sentinel, the real estate "boom" is over.  Before many would-be home buyers breathe a sigh of relief, realtors warn that they do not expect to see a reduction in real estate prices.

Pacific Security Capital Director, Simon Acheson, recently spoke to Multi-Housing News about the real estate bubble and his opinion on the real estate outlook for 2006.

Read Simon Acheson's Q&A in Multi-Housing News.

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

The Latest With Industrial & Office Property Markets

Via Society of Industrial & Office Realtors

There is good news for industrial and offer property owners.  According to the SIOR Commercial Real Estate Index, the national industrial and office property market index has advanced to 119.70, compared with 119.40 in February 2006 and 115.75 in November 2005.

What does this mean for property owners?
- Improved occupancy
- Elimination of subleasing activity (which creates a drag on market performance)
- Increased rental rates
- Development is reaching normal levels
- Owners of prime land see strong acquisition demand
- Investment pricing is strong

For more information on industrial and office property loans and investments, contact Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085.

Development Services Expert to Lead Commercial Real Estate Services Firm

Beaverton, OR, April 24, 2006 -- http://www.pacificsecuritycapital.com – Pacific Security Capital, a vertically integrated real estate services company, has named Louis Swart as its new company President.

Swart, who has over 30 years of experience in commercial and institutional real estate, will focus on expanding the real estate portfolio in which Pacific Security Capital has a vested interest in order to develop properties on its own account.

“The strategic focus of Pacific Security Capital is changing,” said Swart, “the commercial real estate industry is calling out for more vertically integrated real estate services firms and this is the direction in which Pacific Security Capital is headed.”

Pacific Security Capital is in a unique position to be able to offer maximum productivity, create operating leverage and generate economies of scale, all seamlessly executed across multiple asset classes, practice areas and geographic locations.

“Pacific Security Capital is dedicated to adding value to client initiatives at every level of the real estate cycle,” said Swart, “our core competencies spread across six major business units meaning that our clients do not have to worry about managing multiple vendor relationships.”

Pacific Security Capital currently specializes in the following six core market segments:
-    Asset Management
-    Capital Markets Services
-    Commercial Real Estate Advisory Services
-    Development Services
-    Investment Sales
-    Landlord Tenant Representation

Prior to joining Pacific Security Capital, Louis Swart was the founder and president of Wedgwood Retirement Inns, Vancouver WA; the CEO of Retirement Corporation of America, Dallas TX; a division president and senior vice president of Genesis Health Ventures, Kennett Square PA; and president and COO of Regent Assisted Living, Portland OR.

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.

 

Emerging Commercial Real Estate Trends

The commercial real estate industry is showing promise of improvement.  With vacancy rates becoming lower and rental rates finally steadying, commercial real estate brokers are hopeful that the industry is on an upward trend.

Other trends populating the commercial real estate scene include:

Build-to-suit exchanges:
Fueled by high land prices and increased construction costs

Growing industrial market:
Driven by limited speculative construction and absorption by expanding companies

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

Commercial Real Estate Favored Despite Rising Interest Rates

A recent bank survey - The Survey of Lenders' Commercial Real Estate Perspectives for 2006 - has revealed that higher interest rates will not deter investors' appetites for commercial real estate.

Article Via Yahoo Finance

While slightly more than 60% of bankers surveyed anticipate higher interest rates in 2006, they expect that commercial real estate will remain relatively healthy with no increases in delinquencies and defaults. Three-quarters of respondents foresee continued stability in rents and occupancy levels in 2006. Almost 60% of bankers expect cap rates to rise in 2006, and 37% believe they will stabilize at current levels.

Not a single banker projects lower interest rates in 2006.

Despite the specter of rising rates, acquisition activity will remain at current levels, according to 61% of bankers. However, rising rates could chill refinancing activity, with most bankers expecting refinancing to trend flat or down compared with 2005.

Read full article >

To learn more about commercial real estate loans from Pacific Security Capital, please visit www.pacificsecuritycapital.com or call 1-800-844-6085.

Positive Outlook for the Commercial Real Estate Market

According to a recent survey by the National Association of Realtors (NAR), the commercial real estate market is improving.  Driving this improvement is the growing demand for space and increasing investment into commercial sectors.

The NAR forecast expanded to five major commercial sectors:

• Office
• Industrial
• Retail
• Multi-family
• Hospitality

Find out more on the NAR Commercial Real Estate Outlook by reading Commercial Real Estate Market Continues to Improve, NAR Survey Shows in Commercial Property News.

To find out more about commercial real estate loans from Pacific Security Capital, visit www.pacificsecuritycapital.com or call 1-800-844-6085.

The Growing TIC Trend

Tenant-In-Common (TIC) investments are set to be increasingly popular in 2006.  This growth in popularity can be attributed to their ease of management and their promise of deferred tax payment on capital gains.

Matthew Padilla recently wrote an article entitled "Tenancy-In-Common Deals Grow" in the Washington Post, in which he describes the lure of TIC ownership.

Click here to read the full article.

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

Trends In Commercial Real Estate

IRETO - The International Real Estate Trade Organization - released its Global Commercial Real Estate Outlook Report on Friday.

The report looks at global economic trends that are affecting commercial real estate.

The Top 5 trends noted in the IRETO report are:

1)  Real estate financial markets will continue to be more structured and productive
2)  New capital will continue to flow into real estate, but at a slower pace
3)  Buyers will continue to expand outside local markets and around the globe
4)  Increasing rents worldwide
5)  More REITS worldwide and less REITS in the U.S.

To view the full IRETO Global Commercial Real Estate Outlook Report, click here.

 

To learn more about the commercial real estate industry, please contact Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085.

Pacific Security Capital Wins Two IRETO 2005 Commercial Real Estate Industry Awards

Beaverton, OR, November 22, 2005 — http://www.pacificsecuritycapital.com — Pacific Security Capital (“PSC”), a leading commercial real estate investment bank providing investment sales, advisory services, development services and capital markets services, announced today that it has received two industry awards from IRETO, a commercial real estate trade association.

Pacific Security Capital is the winner of the IRETO Client Service Award for PacificElite™, which is the commercial real estate industry’s first preferred client program. PacificElite™ is a client loyalty program designed to reward clients who place substantial amounts of transactional volume with Pacific Security Capital by providing them with an elegant selection of rewards.

“Pacific Security Capital felt that it was time that somebody in the commercial real estate industry did something more than just talk about how much they appreciate business given to them,” said Mike Myatt, Executive Managing Director, Pacific Security Capital. “This is why we pioneered the PacificElite™ program to demonstrate our gratitude to our clientele.”

Mike Myatt, Executive Managing Director of Pacific Security Capital, has also been appointed to IRETO’s President’s Circle of Top Industry Experts, which is comprised of experts who have received special recognition for their contributions to the industry.

“I am thrilled to have been appointed to such a prestigious board of experts,” said Myatt. “It is an honor to work alongside some of the most respected names leading the commercial real estate industry.”

View the full list of IRETO 2005 Awards honorees at http://www.ireto.org

To learn more about commercial real estate investment bank, Pacific Security Capital and its preferred client program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085.
                                                                                                   

Commercial Real Estate Investment Bank – Pacific Security Capital - Opens Seattle Office

Portland, OR, November 14, 2005 — http://www.pacificsecuritycapital.com — Pacific Security Capital (“PSC”), a leading commercial real estate investment bank providing structured finance, investment sales, advisory and capital markets services, announced today that it is expanding its commitment to the Washington commercial real estate market with the opening of a Seattle-based office.

Pacific Security Capital has named Bernard D. Hansen as Director of the Seattle office. Mr. Hansen brings a wealth of commercial real estate experience and local market knowledge to the company.

"The ability to have a local physical presence in the state of Washington being managed by a quality individual like Bernie Hansen is not only a win for our organization, but also for our Washington clients,” said Mike Myatt, Executive Managing Director of Pacific Security Capital.

Mr. Hansen has held executive level and senior management positions with companies such as Citicorp Real Estate, Inc., Wells Fargo Realty Advisors, Inc., Security Properties and Continental Illinois National Bank. Mr. Hansen received a Master of Landscape Architecture from the Harvard University Graduate School of Design and a Bachelor of Landscape Architecture from the University of Oregon. Mr. Hansen is also a licensed Washington Real Estate Broker.

The Pacific Security Capital Seattle office is located at:
Bank of America Tower
701 Fifth Avenue
42nd Floor
Seattle, Washington USA 98104

Pacific Security Capital will offer the following services in Washington State:
• Advisory Services;
• Capital Markets Services;
• Investment Sales, Leasing, Tenant Representation and Corporate Services, and;
• Development Services

To learn more about commercial real estate investment bank, Pacific Security Capital and its preferred client program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085

Retail Vacancies and Rents Rise, Pointing to Market Slowdown

Article By Ryan Chittum Via the Wall Street Journal

The U.S. retail real-estate market showed signs of slowing in the third quarter as vacancies moved higher but it wasn't enough to damp rents, according to a new study.

The higher vacancies are likely to reinforce investor concerns that weaker consumer spending means retail real estate has peaked.

Shopping-mall rents rose 0.9% in the third quarter -- the fastest pace in two years -- to $38.08 per square foot per year from $37.75 in the second quarter, according to the survey of the top 67 U.S. markets, excluding New Orleans, by Reis Inc., a New York-based commercial real-estate research firm. The vacancy rate moved to 5.4%, up from 5.1% in the previous quarter.Rents at strip malls were up 1% to $18.23 a square foot in the third quarter from $18.05 in the second quarter. The vacancy rate edged up to 6.8% from 6.7% in the second quarter as absorption -- the net change in occupied space -- slowed from its high second-quarter pace. Tenants absorbed 6.8 million square feet in the quarter, down from 9 million square feet in the second quarter.

In a potential sign of trouble in retail, 16 of the 67 markets surveyed had net decreases in occupied space at strip malls during the quarter as consumers appeared to pull back on spending, said Lloyd Lynford, chief executive of Reis. The total decrease in occupied space among the down markets was about twice the total decrease among down markets in the second quarter.

See full article >

To learn more about commercial real estate loans from Pacific Security Capital or its preferred client program, PacificEliteTM, please visit www.pacificsecuritycapital.com or call 1-800-844-6085

Google Earth Gathers Commercial Real Estate Data

Article Via Marketing VOX

CoStar Group, commercial real estate's largest data provider, and Google are in talks about integrating building information with Google Earth mapping service, and preliminary discussions have taken place with Yahoo as well, reports the Mercury News (via SearchEngineLowdown). "We have licensed some content to Google already," said Andrew Florance, chief executive officer of CoStar Group. The deal is Google's initial foray into the realm of commercial real estate.

See full article >

To learn more about commercial real esate investment bank, Pacific Security Capital, or its preferred client program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085.

Commercial Real Estate Investment Bank - Pacific Security Capital - Engaged As Exclusive Program Manager for $1 Billion Las Vegas Mixed Use Project

Beaverton, OR, October 20, 2005 — http://www.pacificsecuritycapital.com – Pacific Security Capital (“PSC”), a leading commercial real estate investment bank providing capital markets, investment sales, advisory services and development services, announced today that it has been engaged as the exclusive program manager for a mixed use project in Las Vegas with construction costs estimated to be in excess of $1 Billion dollars.

Pacific Security Capital will provide turnkey program management services for the project which is expected to consist of retail, gaming and condominium components.

“Pacific Security Capital is seeing the demand for its third party development services sky-rocket,” said Mike Myatt, Executive Managing Director. “The size and sophistication of many of the projects we are engaged in require a unique combination of skill sets that very few service providers can offer.”

Pacific Security Capital will provide the following turnkey program management services for the Las Vegas project:
• Entitlement Consulting
• Fee Development
• Project Management
• Construction Management
• Capital Markets Services

“When a client is going to take the risk of making such a substantial investment into a commercial real estate project, Pacific Security Capital manages the risks associated with large scale development projects,” said Myatt.

To learn more about capital markets, development services, investment sales, or other advisory services from Pacific Security Capital or its preferred client program, PacificEliteTM please visit www.PacificSecurityCapital.com or call 1-800-844-6085.

The Risks & Benefits of Investing in Emerging Markets

By: Jim Kean, Managing Director, Chief Investment Officer
       Mike Myatt, Executive Managing Director

Over the past 20 years, the commercial real estate market in the United States has developed a depth and sophistication that is beginning to approach the maturity and efficiency of alternate asset categories. Improved market efficiencies coupled with today’s surplus of capital flow have created the most competitive commercial real estate market environment in recent history. The confluence of these macro economic trends and current market conditions have created a reduction in the total investment returns that can be achieved on investments in U.S. commercial real estate assets.

Given the surplus capital flow and the fact that commercial real estate as an asset class offers many advantages over other investment alternatives, asset/investment managers will not be able to disinvest themselves from real estate allocations, rather they will simply begin to look around for other higher growth markets that will allow them to maintain yield. Emerging Markets in Eastern Europe, India, Latin America, China, and the rest of Asia present scenarios for higher growth, even on a risk adjusted basis. On an aggregate basis the statistics are impressive. For example, currently 80% of the world’s population accounts for 20% of world GDP. By 2015, 50% of world GDP will be accounted for by Emerging Markets.1 Consider the following:

• Rising Economies: Over the past decade, the twin drivers of expanding world trade as well as a more globalized production system have permitted a number of Emerging Markets to experience the highest GDP rates in the world. China has routinely experienced 8-9% annualized growth and India has followed closely with 7% annualized.
• Demographics: For the most part, Emerging Markets represent younger populations, growing numbers of well-educated professionals, an expanding middle class, growing consumer bases, urbanization, and rising incomes. In addition, the structure of family life for these modern middle class populations is assuming the “western” nuclear form and moving away from the more traditional extended cohabitating family unit.
• Commercial Demand: The economic expansion as well as the presence of global companies that bring employment oriented around intellectual capital is creating demand for modern, western style, commercial real estate infrastructure. Core assets such as office, industrial, retail, multifamily and hospitality are all experiencing rising demand.
• Residential Demand: One of the biggest exports the U.S. has had over the past twenty years has been culture and lifestyle. As the successful Emerging Market economies undergo the demographic shifts described above, demand for western style single family residences as well as modern multifamily is experiencing explosive growth. An example of this is in India. Investments of more than $25 billion USD will be required in the next 5 years to fulfill an expected shortfall of 22.7 million housing units.2
• Closed Market Systems Opening Up: Most successful Emerging Markets have been engaged in systematic reform of basic societal values we take for granted in the developed world. These include property rights, legal process, published regulations and statues, methods to ascertain and certify real property rights, etc… In addition, specific reforms such as privatization of state owned industry, relaxation of capital controls, and liberalization of rules regarding Foreign Direct Investment (FDI) are all encouraging growth and investment.

All of the factors described above play into a developing long run scenario where opportunities exist for the real estate investor interested in global real estate opportunities and higher returns. All of the asset categories we are familiar with in the U.S. market will be in demand within these developing economies. As well, with this demand for modern real estate built to developed world standards and quality will be a concurrent need for all of the ancillary services required to maintain a modern real estate infrastructure. Site selection, construction and property management, financing – all services will be in demand.

For all of the optimism surrounding the macro and micro economic trends driving the globalization of commercial real estate, investors wishing to approach emerging markets should rightly do so with some degree of caution. Some of the more common risks of investing in emerging markets include:

• Political risk: The process of modernizing the economies and systems of emerging markets does not represent a steady or predictable process. Many of these countries have experienced situations of two steps forward and one step back. Most of the setbacks are greatly influenced by political developments that at times represent backlash against western ways.
• Legal and regulatory transparency: Every country has a system for governing property rights and development. It goes without saying that an improper appreciation for how these systems work within a specific country could have a severe impact on investment returns.
• Property rights: In the U.S., title companies provide a very systematic, quickly researched method for determining legal descriptions of property as well as what constitutes a claim on the subject property. Things are not nearly as straight-forward in an emerging market. For example, in Panama, even after a local real estate attorney researches a property, “squatters” can step forward and file a legal claim of historical residency rights to the property. Many of the emerging markets have long running histories and complex, difficult to resolve boundary situations. An absence of a central database of titles and property deeds may also add confusion to the issue of who owns what.
• Lack of professional real estate skills: emerging markets are fragmented and lack the professional services a developed world investor may take for granted. Finding real estate professionals with the requisite skills to participate in a real estate transaction may be challenging.
• Operational and logistical concerns: maintaining offshore investments in commercial real estate can add to the complexity of operational and logistical efficiencies. Time zone issues alone can cause a burden to operational efficiency. Property and asset management, financing, and many other normal operational and logistical considerations cannot just be taken for granted.
• Liquidity concerns: Lack of central databases as well as public records of transactions means that there is a deficiency of market pricing information to make comparisons as well as drive transactions. Reduced market transparency also means that transactions take longer to close. Word of mouth selling methods because of a lack of a database driven listing service impedes transactions and liquidity.
• Infrastructure: In the U.S., there is an assumption of basic infrastructure as structured and mandated by an organized governmental authority. While there may be complaints within our system regarding the process developers may need to go through regarding sewer, power grid, water systems, traffic planning, clean air, parks, environmental issues, etc… in many cases rules governing infrastructure and who is responsible for it barely exist in these countries. A real estate investor and/or developer may end up assuming the development and capital needs for all the basic infrastructure usually provided by a more developed society.
• Zoning and impairment: Every market has a different approach to what the owners of properties around your property may or may not do. In many of these environments, little or no zoning exists. The risk of someone engaging in development detrimental to the value of your property is very real.
• Capital Controls: When confronting the issue of repatriating capital from a successful real estate investment, there is a real danger of not being able to extract capital and/or profits from the Emerging Market. For example, China has been known to impose “profit taxes” when foreign interests are trying to bring capital home from the sale of a property. Argentina currently requires the creation of a one year capital account in the amount of 30% of invested capital for every FDI in the country, which will be held by the Argentine government during the period of the investment. While the present situation has the government treating this capital well, in 2002 during the currency crisis, the government ended up seizing a number of large cash accounts.
• Currency Risks: Let’s say U.S. investor is taking dollars and purchasing an Indian property denominated in rupees. Two years later the property sells and you record a big profit. However, if you did not hedge the currency, you risk recording a loss or at least a reduced profit because of exchange differences. In the past five years alternatives for country specific currency hedging have become much more affordable but it still is a risk factor that needs to be addressed.

While all of the above risks (and more) can be present in emerging markets investments, these risk factors can be successfully managed by engaging the appropriate professional advisor. Entering an emerging market without an experienced country specific advisor in tow can cause at best project inefficiencies such as time delays and at worst total loss of investment. When considering the development of an emerging markets strategy, best practices would suggest that engaging a global commercial real estate investment bank with a local point of presence would assuage many of the concerns listed above.   

In summary, the opportunity to get involved on the ground floor of the growth markets in commercial real estate over the next twenty years is available. Undergoing the effort now to learn and understand how investments work in emerging markets will pay dividends for the persistent, patient, long run investor. If an emerging markets investment strategy is selected by an investor group, it is critical that a country specific set of risks is established and subsequently addressed to protect investor capital and returns. A successful strategy will involve selecting a set of advisors who can help a new investor navigate the maze of issues present in each geographic area.

For more information on investing in emerging markets, please contact commercial real estate lender Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085

Vibrant Hotel Market Reported

Article by Colleen Corley Via Commercial Property News

Good times are ahead for buyers and sellers in the hotel industry, according to a mid-year report on hotel transactions by Jones Lang LaSalle Hotels. Activity reached a record $8.4 billion for the first half of 2005, with a total of $15 billion projected for the year.

Plentiful debt and compressed interest rates--two factors that led to a near-doubling of transactions in 2004--have continued this year at a robust pace. The amount of capital in the market has increased significantly, with large private equity funds raising real estate opportunity funds from $5 billion to $10 billion.

See full article here.

To learn more about Pacific Security Capital’s commercial real estate loans or its preferred borrower program, PacificElite(TM) please visit www.PacificSecurityCapital.com or call 1-800-844-6085.

Weak Job Growth Stunts Growth In Pittsburgh

Article By Maura Webber Sadovi Via Wall Street Journal's RealEstate Journal

Pittsburgh's troubled commercial real-estate market, suffering from lackluster job growth and a stagnant population, has largely missed out on the national property boom.

The pain has been particularly keen for the office market. Although first-quarter office vacancy rates inched down from the year-earlier period, office rents are expected to fall in the near term and rise only 1.9% annually through 2009, just under half the forecast average national rate, according to Property & Portfolio Research Inc., a Boston-based real-estate research firm.

The dollar volume of office sales in Pittsburgh has lagged behind nearby cities like Baltimore and Philadelphia and prices have stayed low, according to Real Capital Analytics, a New York research firm. The region's office space sold at an average price of $71 a square foot in 2004 compared with the national average of $165 a square foot.

See full article >

For information about Pacific Security Capital commercial real estate loans contact us at 1-800-844-6085.

Demand for Office Space Continues to Improve

Article by Ryan Chittum Via the RealEstate Journal

The office market expanded strongly in the second quarter as companies leased more space, a sign they expect to expand their work forces. Office-building vacancies tumbled to their lowest level in three years, and rents registered their second quarterly increase in a row after four years of declines.

The national vacancy rate dropped to 15.4% in the second quarter from 15.9% in the first quarter, according to the survey of the top 67 U.S. office markets by Reis Inc., a New York-based real-estate research firm. Rents jumped 0.7% in the second quarter to $20.32 a square foot a year from $20.18 a square foot in the first quarter. That builds on a 0.6% jump in the first quarter, which was the first rent increase in four years.

Absorption -- the net change in occupied space -- was a strong 19.5 million square feet in the second quarter, the second-best performance since the fourth quarter of 2000 and nearly double the 10.4 million square feet absorbed in the first quarter.

View full article >

For information about Pacific Security Capital commercial real estate industry services contact us at 1-800-844-6085.

Dept. of Treasury, Real Estate Groups Call for TRIA Extension

Article by By Kristin Olson Via Commercial Property News

The United States Department of Treasury's report on the effectiveness of the Terrorism Risk Insurance Act, released yesterday, stated the act was widely effective and affordable. With a few changes made to the current act, due to expire December 31, the Administration would accept an extension, according to a letter signed by Treasury Secretary John Snow.

Many real estate related industries are calling for an extension. The Mortgage Bankers Association, for example, wants an extension of the act until challenges in predicting terrorism risk and the loss probability can be resolved through a thoughtful solution.

The MBA is not alone in believing an extension of the program is necessary. The Coalition to Insure Against Terrorism, a group consisting of 75 companies, mostly real estate related, and the National Association of Insurance Commissioners, agree with the MBA that terrorism insurance is critical and stand by the department's report.

According to statements from these companies, without a TRIA extension, commercial real estate investment markets will become dysfunctional, rating agencies will place loans on watch lists, the cost of insurance will increase, and it will have a destabilizing affect on rates--all conspiring to produce a net loss for consumers.

See full article >

For information about Pacific Security Capital commercial real estate investment services contact us at 1-800-844-6085.

tags: commercial real estate investment, commercial real estate loans

Court Buttresses Eminent Domain

Article by Jesse Bravin via RealEstate Journal

The Supreme Court gave local governments broad rein to take private property for economic development, ruling that transferring land to private investors for projects promising to bring jobs or commerce was a public use akin to building a park or paving a road.

The 5-4 decision lifts a cloud over redevelopment projects across the country that hinge on local authorities using eminent-domain powers to assemble parcels for private investors to develop commercially. Several projects could lead to the condemnation of property for conversion to shops or other uses that will feed off the primary development. The threat of condemnation, developers say, encourages holdouts to sell.

The court's ruling came in a case out of New London, Conn., a depressed manufacturing city whose economic hopes were buoyed in 1998 when New York drug maker Pfizer Inc. announced plans to open a research facility there. City authorities proposed to redevelop the adjacent residential Fort Trumbull neighborhood to capitalize on Pfizer's presence, including a hotel and a pedestrian "riverwalk." Most landowners sold willingly. Nine refused, and the city condemned their property.

See full article >

For information about commercial real estate, contact Pacific Security Capital at 1-800-844-6085.

Base Closures: Redevelopment Boon Or Bust?

Article by Parke Chapman Via National Real Estate Investor:

With the Department of Defense shutting down military bases across the nation, commercial real estate developers are investigating potential redevelopment sites. As many as 33 major bases will be closed while another 29 bases will be “realigned,” which in military shorthand means they will absorb more staff. Meanwhile, the shuttered bases should save the government a whopping $50 billion over the next 20 years.

The government cost-cutting benefits are clear, but are base redevelopments worth the headache for developers? To be sure, decommissioned military bases offer unique risks and rewards for any developers bent on reinventing them.

View full article here >

For information about commercial real estate, contact Pacific Security Capital at 1-800-844-6085.

Is this the year of Goldilocks in commercial real estate?

Economists refer to a “Goldilocks economy” as one that is neither too hot, nor too cold. Bob Bach, national director of market analysis for Grubb & Ellis, describes 2005 as the year of Goldilocks in the commercial real estate industry. “Economic growth is going to be strong enough in 2005 to propel the leasing market forward, but not so strong as to cause enough of a spike in interest rates that would disrupt the investment market.”

Bach's remarks, which came during a recent Grubb & Ellis Investment Client Conference at the Mandarin Oriental hotel in Miami, preceded a panel discussion moderated by NREI that focused on investment trends.   Full article at National Real Estate Investor

For information about commercial real estate finance, contact Pacific Security Capital at 1-800-844-6085.