PACG

Capital Crunch Changes Little

We all know the capital crunch is impacting commercial real estate sales for those selling and those buying. Across the board, investment is impacted when access to capital is reduced to its current dribble.

But the capital crunch changes little when it comes to commercial real estate investment fundamentals. Capital has always been the annoying component in any investment. After all, it is always about the cost of money, isn’t it?

At the end of this post, you can download “How to Invest in Commercial Real Estate” a FREE document that clearly indicates that although much has changed, little has changed with respect to how you as an new or seasoned investor create an appropriate investment scenario.

It is true, the capital crunch changes little; in fact, it simple reinforces the need for an insistence upon the fundamental components that make up commercial real estate investment.

Whether you are a seasoned investor or an upstart looking at opportunities in the market, stick to the fundamentals outline in “How to Invest in Commercial Real Estate.”

Access to “easy” capital is no longer a part of the investment environment and we have to learn to live within that new reality. In the next 24-36 months investor refinancing will be impacted by new and more demanding underwriting requirements for commercial real estate properties.

The capital access problem existent within institutional lenders will inevitably lead to alternative approaches, such as SBA lending and more creative financing by individuals and partnerships.

There is one thing that hasn’t changed, however, and that is the fundamental principles related to building wealth through commercial real estate investments.

Download the FREE Document “How to Invest in Commercial Real Estate.”.

Leasing’s Numbing Effects

For Owners and Tenants, leasing has a numbing effect. We are engaged in a market abundantly saturated with space, space and more space. I’m told by “experts” that spend time studying the CRE market that showings of vacant space are now at historic highs.

Furthermore, I’m told, and I am a converted believer, that our showing-to-conversion ratio is also at an all time low. My gut-level instincts tell me it is true. I’m experiencing the numbing effects of hundreds of inquiries, repeated showings, weak tenants and of course, the great disappointments that are now a regular part of today’s commercial real estate market.

However, there are additional factors in the numbing effects of leasing and that is the impact vacancy has on Owners, their cash flow and ultimately their property values. With note calls just around the corner for many owners, occupancy, cash flow, NOI and CAP is at the forefront of their thinking.

Sharpening the analytical pencil and a renewed focus on highly focused target marketing and tenant qualification has helped improve the conversion ratio of showings to lease executions. More emailing to key brokerage networks, working the phone constantly and quickly, online presence through CRE blogging, property websites, networking meetings in the Metro Phoenix Markets and very little direct mail have improved results.

There are still good tenants shopping the market for quality space. But they are much more discriminating and less inclined to LOI and ink a deal until they are certain the factors that make up the total lease are correct. Patience and perseverance are necessary requisites.

It’s going to be a long and winding road going forward. Once again, we are in a market cycle that will recover but not without some pain and adjustments for Owners, tenants and yes, even us, the commercial real estate brokers.

West Greenway Road Office Condo

Here is an excellent investment office condo opportunity located at 3711 West Greenway Road, Ste 111, Phoenix, AZ.

This office condo is ±1,326 s.f. and priced at just $160,000, an amazing $120 per s.f. Better yet, the space has an existing tenant! At full price and a lease rate of $9.75 nnn p.s.f. that the property cap is just above an 8% cap rate.

There’s more! Seller financing is available with just 10-15% down and an interest rate of 5-6%, creating a PI possibility of just $773! That’s almost unheard of in today’s market.

Get more information by downloading the flyer. Contact Donald Teel at Arizona Commercial by email or, if you prefer, you may call him at 928.777.8100. Visit Commercial Web Page…more than real estate.

Eastridge Plaza North and South

Prescott Valley’s Eastridge Plaza features two newer buildings for retail, office, medical office or industrial use.

The north building fronts to ±200′ of Highway 69 frontage and the South Building is on Eastridge Drive. Each building is ±18,000 s.f. with minimum use of ±2.303 s.f. Lease rates are $8-10 nnn, commensurate with space requirements, use and term. Ask about our generous tenant improvement allowance.

Get more information by downloading the flyer. Contact Donald Teel at Arizona Commercial by email or, if you prefer, you may call him at 928.777.8100. Visit Commercial Web Page…more than real estate.

Robert Road Office Building – Prescott Valley

Approximately ±1,500 square feet of excellent office space ideally suited for local small business operation. Take it all or, if you like, we can demise it into a office duplex, allowing you less space in a great location.

This property was a former insurance firm but it is ideal for a small or medium size profession office or even a retail operator. At just $9 (nnn) per square foot per year, you cannot go wrong because location is everything. Office is in the very heart of high density residential and buisness community in Prescott Valley, Arizona. Lease incentives for qualifying tenant such as 1st and 2nd year graduated rents, half rents or even free rents, subject to lease terms. MLS #946417. Come and get it, won’t be here long.

Please email Donald Teel, Senior Associate at Arizona Commercial for more detail or, if you prefer, call him at 928.777.8100. Blog with Donald Teel at Commercial Web Page, more than real estate.

Corner Property – Spouse & Robert

This former restaurant building is ideally situated on the NW Corner of the intersection of Spouse and Robert Road in Prescott Valley, Arizona. High visibility on both Spouse and Robert Road make this an ideal lease candidate for restaurant, espresso shop, retail, office or specialty use.

Located in the heart of Prescott Valley, Arizona, this retail, office or restaurant property has just been priced at $9 NNN, with super incentives for qualifying tenant such as 1st and 2nd year graduated rents, half rents or even free rents, subject to lease terms. MLS #946416.

Please email Donald Teel, Senior Associate at Arizona Commercial for more detail or, if you prefer, call him at 928.777.8100. Blog with Donald Teel at Commercial Web Page, more than real estate.

Assessor Addresses Prescott Area Commercial Group

Pam Pearsall met with Prescott Area Commercial Group Members (PACG) on April 1, 2010 (no fooling!). Her presentation dealt with property tax issues, calculation formulas and the current state of property taxation in Yavapai County.

The Yavapai County Assessor’s Office is responsible for locating, identifying and appraising all assessable properties subject to ad valorem taxes.

The County Assessor is also responsible for notifying each property owner of their values, between January 1 and March 1 of every year. This requirement is met by mailing out Notice of Value letters and cards. If significant changes are made to the property after January 1, a property owner may receive a Notice of Change letter or card through the mail on or before September 30th.

The Assessor’s Office strives to value all properties accurately, fairly and uniformly according to Arizona State Statutes and Department of Revenue Guidelines. A list of all taxable properties, also known as the Tax Assessment Roll is kept by the Assessor.

The Assessor does not set tax rates or collect taxes. The tax rates are set by the County Board of Supervisors, and the taxes are collected by the County Treasurer’s Office.

The PACG question and answer period with Ms. Pearsall demonstrated some pent-up concerns and questions, together with some frustrations among PACG Members over tax valuations, clarity of policy and other issues. Ms. Pearsall address them all.

If you would like to have access to all of tax appeal forms, explanations of tax processes and the Assessor’s other pamphlets and documents visit this link.

I have converted Pamela Pearsall’s PACG PowerPoint Presentation to PDF format in order to insure its transferability and integrity. Download the presentation here.

You may download the “2011 Property Valuation Booklet – How it Affects Your Tax Bill” pamphlet here for distribution to your clients.

If you would like to download the appeal forms for various types of property, click here.

Want to contact Pamela J. Pearsall, Yavapai County Assessor? Here is her contact information:

Pamela J. Pearsall
Yavapai County Assessor
1015 Fair Street
Prescott, AZ 86305
EMAIL: Pam.Pearsall@co.yavapai.az.us

Metro Phoenix Retail

FROM: Donald Teel – Attention PACG Members! I have a number of spaces for lease in retail centers sprinkled throughout the Metro Phoenix market from Grand and Bell to Alma School and Ray Road, and point between. These are small multi-tenant strip centers to intermediate centers above 40,000 s.f. with national name brand tenants.

If you have tenants suited to the metro Phoenix retail market, I would appreciate your referral and will pay PACG members 30% on their first deal in 2010 or, if you prefer, meet me on site, submit an LOI and earn a full commission. Properties range in size from ±600 s.f. to ±2,000-4,000 s.f. and are located in El Mirage, Surprise, Sun City West, Sun City, 125th and West Thunderbird, Cactus and 75th Avenue, Ray Road and Alma School.

Please contact Donald Teel at 928.777.8100. Visit me at www.CommercialWebpage.com. Email me.