Commercial Real Estate Loans & Investment Sales

Global Real Estate Markets See Boom

Article by Anita Howarth Via GlobeSt

Commercial real estate markets in key cities around the world are booming as globalization pushes the economies of large international cities to converge.

All 10 global business centers now have vacancy rates below 10%, a milestone in the ongoing worldwide recovery of commercial real estate.  Globalization of trade and borderless movement of money have allowed key cities to rebound in tandem relatively quickly from the real estate decline that followed the technology bust in 2000.

Hong Kong, which was hit by the dotcom collapse and suffered another blow after the SARS outbreak in 2003, has rebounded quickly and strongly. The city saw asking rents shoot up 37% in the past 12 months to an average of $69.12 per sf as the vacancy rate fell to 4.1%. And by mid-year Tokyo's vacancy rate of 0.6% was down from 2.2% and spurred a 12% jump in average asking rent to $148.17 per sf.

London’s asking rent rose 17% to an average of $163.23, and Madrid also logged a 17% increase, to a $43.18 average. London and Madrid vacancy stood at 5.7% and 8.2% respectively, at mid-year 2006. And in Paris, asking rents rose to $80 per sf, up 5.1%, while vacancy stood at 4.8%, down 0.7%.

In North America, Toronto asking rents rose 9% to an average of $24.58 at mid-year, as vacancy rates slid to 5.2% from 8.4% at mid-year 2005. New York registered a 7% increase in asking rent to an average of $47.30, and vacancy fell 1.8% to 6.3%. Washington, DC which was the only major US city to thrive after the dotcom bust, saw asking rents rise $45.50, up 0.6%. Despite a tremendous rise in development, vacancy continued to fall, down 0.6% to 7.3%.

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

REITs Fuel Asian Market

According to Inodesian National News Agency, Antara News, a new analysis of the Hong Kong marketplace reports that the structured finance market in Asia is gaining momentum from an increase in real estate investment trusts (REITs).

According to a recent Standard & Poor's report, the total market value of REITs across Asia, including Australia, recently exceeded the USD$100 Billion mark.  While rising interest rates in the region may slow down some of the short term growth, the S&P report predicted that more favorable regulatory frameworks, strong economic growth and continuing improvements in property markets will encourage the formation of more REITs this year.

View the full press release here >

For more information on emerging markets and structured finance, contact Pacific Security Capital at 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.

The Scoop on Emerging Markets - India

According to an article entitled "Commercial Real Estate Prospects in India" written by Mark Satie of Indianground, commercial real estate in India has really picked up over the last 5 years and has established India as an industry trend setter.

• A population of 1.1 billion and a workforce of 496.4 million serve a great potential for real estate investors in India. The talent pool of intellectual capital and cost effectiveness gives India a competitive edge in the real estate scene.
• A growth rate of 30% and a 30% average rate of returns look lucrative for future prospects in the realty sector.
• Latest research data estimates increase in revenue generation from $14 billion to $102 billion over the next 10 years.  For NRIs investing in real estate India, the resturn has been more than profitable.  They feel India in this regard has not even tapped 20% of the market.
• Moreover with the relaxation of FDI rules and tax incentives for NRIs, the Government has encouraged increasing foreign capital.  Global investors investing in real estate India can certainly look for a 25% ROI.

Read the full article >

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

Hunt for Real-Estate Profits Takes Investors to New Frontiers

Article By Steve Levine and Christine Haughney Via RealEstate Journal

When David Mitzner went to Poland in the late 1980s, he saw a developer's dream: a chessboard of empty lots and little-used offices, warehouses and factories, and scant competition from other investors. Yet when he sought financial backing in the U.S., he felt as though he were promoting property "on the moon," he recalls.

Today, the Polish real-estate market is so awash in foreign capital that it has gotten hard for Mr. Mitzner to find high returns. Last year, foreign investment in Polish property doubled from 2004 to about $3.5 billion, according to the New York real-estate firm Cushman & Wakefield Inc. New property investors are settling for annual returns below 7%, not much better than yields available in Western markets, and far below the double-digits Mr. Mitzner collected early on.

In the 1990s, global investors hunting for high returns flocked to stock markets. When those markets plunged, capital poured into commercial real estate, pushing up prices and reducing investment returns in top U.S. and Western European markets. Now, a wave of capital from American and European pension and investment funds is flowing into once-fringe markets such as Poland, the Czech Republic, Mexico and China. As prices in those markets rise, yield-hungry investors have begun venturing into even dicier markets, such as Russia and Bosnia, driving up prices, and pushing down profits, there, too.

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For more information on Emerging Markets services from Pacific Security Capital, visit www.pacificsecuritycapital.com or call 1-800-844-6085.

A Global Search for Returns

Article by Parke Chapman Via National Real Estate Investor

With so much foreign money pouring into U.S. property markets over the past few years—inflating prices and cutting returns—American investors increasingly are looking offshore for higher yields. There’s just one catch: The spread between U.S. and offshore returns is narrowing. Demand is strong globally, pushing down cap rates, and the ability to move money and market information at the speed of the Internet have left few undiscovered pockets of above-market opportunity.

Still, there is clearly more U.S. money looking for returns abroad. A recent survey by institutional real estate newsletter Real Estate Alert found that a total of 21 domestic operators are overseeing 26 funds that invest solely outside of the U.S. Tishman Speyer Properties, for example, is raising $1.3 billion for a series of funds that will target India, China and Europe. It’s also planning to launch a Brazilian joint venture.

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To learn more about Emerging Markets, please contact Pacific Security Capital at www.pacificsecuritycapital.com or call 1-800-844-6085