Real-estate: Investor Survey Sees ‘Ups and Downs’ in the Commercial Real Estate Industry

NEW YORK, June 16, 2008 (PRIME NEWSWIRE) — The U.S. commercial real estate market’s downturn continued in the second quarter of 2008, hurt by a weak economy, the credit disruption, tepid tenant demand and a wide pricing gap, according to the latest edition of the PricewaterhouseCoopers Korpacz Real Estate Investor Survey(r) released today.

A plunge of as much as 81 percent in the sales of some types of commercial property, an increase in average overall capitalization rates for many markets, a slip in the rental market and a decrease in initial-year market rent change rates accounted for much of the downturn during the quarter, according to the quarterly survey of major institutional equity real estate investors. Investors’ uncertainty about the direction of the economy added to the woes. With job losses mounting and consumer confidence waning, prospective buyers were unwilling to meet sellers’ pricing levels, widening the pricing gap. Many investors believe that the disparity in prices is unlikely to narrow again until there are stronger signs of economic prosperity and liquidity returns to the industry.

“The pricing gap that resulted after the credit markets tightened has been further widened as a result of most real estate investors now taking a back-to-basics approach and being more conservative than sellers in their underwriting,” said Tim Conlon, partner and U.S. real estate sector leader for PricewaterhouseCoopers. “Investment opportunities still exist, and there are still buyers out there willing to take advantage of good opportunities.”

While the majority of nationwide markets are mired in an economic slowdown, investors realize that the commercial real estate fundamentals are healthier than they were during the last downturn in the mid-1990s. New construction is being restrained, supply and demand is more balanced and cash flow assumptions are more realistic, laying the groundwork for a rebound when the economy gathers steam. For the time being, the “fundamental” investor has replaced the leveraged investor.

What’s your home worth in Phoenix? Here’s what some analysts have to say.

I found the following short snip in an article on the web and was sort of fascinated by it. Although it makes sense from a strictly economic perspective, I wonder if this rule holds true in a market like real-estate where the “goods” (houses) are so unique. Here’s what the folks at HuliQ.com had to say:

“What is your home really worth right now? It’s worth as much as the lowest-price lender-owned comparable plus the cost of returning that home to turn-key condition plus a small convenience premium. In other words, if the lender-owned house sells for $120,000, and if it will take $10,000 to make it as nice as your home, then your home is worth $135,000 — $140,000 at most.

And if you’re not willing to sell you home for that price? Get it off the market right now. It will not sell for more, but the surplus of over-priced inventory is a false signal to buyers that the market has not found its bottom.”

I see the logic, but as I said above, houses are not fungible goods. They may have similar specifications or appear similar on paper, but every house is different from it’s neighborhood, to it’s view, to the barking dog next-door. I wonder if these factors would weigh heavily enough on buyers — meaning that buyer’s are more emotional than data-driver — and this would over-ride some of this logic.

It’s an interesting question. What do you think?

Duane Slade, Mesa Arizona

Real-estate: Phoenix NW Valley commercial property on the upswing

I found another really interesting article in the Arizona Republic this week showing that the North-west part of the Valley of the Sun is seeing an uptick in commercial real-estate occupancy. There has been so much construction going in out in the NW, including the large commercial complex off Lake Pleasant and the Loop 303.

The article tells us this for example:

New retailers in Surprise, Peoria, Sun City and parts of Glendale took over more than 660,000 square feet of commercial space between January and March. The region was one of the only greater Phoenix markets to experience retail growth, up from about 265,000 square feet of absorbed space in the first quarter of 2007.

It goes on to say that the West valley should continue to see growth for the next few years.

You can read the rest of the article by clicking here.

Duane Slade, Mesa Arizona

Is Phoenix real-estate starting to rebound?

I found an interesting article from on-line newsletter NuWire Investor looking at the question of whether the Phoenix real-estate market has hit bottom and may be ready for a rebound from the housing crisis.

The article starts off in part:

“Those who are waiting for the bottom of the market may be surprised to discover that it has already occurred in a few areas,” Chuck Willman, a real estate agent for Gentry Realty and founder of AZVest.com, said in an e-mail interview. “Whereas the market decline can be prolonged, the rebound can be quite quick.”

The article goes on to look at the issue at some length and it is a very good read. Take a look by clicking here to visit the article “Real-estate in Phoenix: ready for rebound?“.

I’d be interested in anyone has any comments on what they’re seeing out there in the market.

Duane Slade, Mesa Arizona

Poem: The night is long

I’m so proud of my daughter Whitney who is in the ninth grade. Whitney has written a poem that is about to be published and I’d like to share it with you:

 

The Night Is Long

Whitney Slade

The night is long the morning is well expected

I’m tossing and turning in my bed way more anxious than I detected

 

The house is still dark everyone’s asleep

I’m wide awake but must not make a peep

 

It must be at least 6:30 I look at the clock

Its 2:00 a.m.  Wow that’s really early

 

I fall back asleep sugar plums are dancing in my head

I’m dreaming of the perfect Christmas suddenly my brother pulls me off my bed

 

Its 7:00 the sky foggy, but bright

My nerves are screaming “Time to open presents, all right?”

 

I see colored wrappings of presents all dolled up and pretty

Big ones and small ones now my head is dizzy

 

Christmas morning is so much fun

To tear open presents until everyone is done

 

This Christmas morning as you wake up remember the true meaning

Which is Christ’s birth and the sincerity of his giving

 

Duane Slade, Mesa Arizona

Video Clips: Boston Marathon 2008

My friend Joe English is making a documentary about the Boston Marathon and he interviewed me at the race. He posted three short clips of me before the start of the race on YouTube. You can see them below by clicking on the clips.

It brings back a lot of memories for me to watch these clips. The whole day is a bit of a blur, but seeing these snippets of time before the race reminds me so much of the feelings that I was having that morning. It was an amazing day.

I can’t wait to see the rest of the film!

Clip 1 – At the Athlete’s Village

Clip 2 – On the way to the start

Clip 3 – At the starting line

Duane Slade, Mesa Arizona

My Boston Marathon Adventure

It all started this morning around 4:30 with the hotel wake up call. I really wasn’t sleeping well so it wasn’t hard to get out of bed. I had a little breakfast and went down to the lobby to wait for the buses that would take us out to Hopkington.

As I was sitting around in the lobby I quickly realized that I was not prepared at all. I had on a sleeveless running shirt and a pair of shorts. I looked around and everyone was dressed like they were going to Alaska. They had on jackets, sweats, hats, and gloves. They were all carrying bags with their numbers on them and I was carrying a bottle of water and a bagel. After assessing the situation I hurried upstairs and put on a couple more items, grabbed my red bag with my number, and went to the bathroom one more time. I then headed outside to catch the bus.
 
The bus ride was very cold and long. As we rode up to the starting-line we must have definitely taken a wrong turn, because we were going way too far. It felt like we were on the bus for an hour. The guys behind me didn’t make the ride any nicer with their windows down the whole time. They must of grown up in the arctic circle because the -40 wind-chill that was coming through the window and blowing on me didn’t seem to effect them the slightest bit.

As I sat there I was a little embarrassed because of the chatter that was coming from my teeth slamming together due to the cold. They were chattering so much and so hard I thought I was going to have to go get my new veneers replaced. We finally arrived at the start line and quickly emptied the bus.

Boston Marathon: I did it!

I finished the Boston Marathon. I can’t believe it.

I jotted down some notes to a friend, which I’ll share with you and then tomorrow I’ll have a little more detail to share about the race.

Boston was an awesome experience! All of the people, the runners and the fans, made the run feel like there was electricity in the air.

If I would have trained a little harder I could have really performed well. Don’t get me wrong, I was really happy with the experience and the time I got, I am just saying that with a little more work on my part I could have been down close to 3 hours.

I was doing exactly what I wanted until about mile 18 (heartbreak) then I began to get a little tired and started to feel some pain. I knew that in order for me to get the time I wanted it would mean a lot of pain and honestly I wasn’t up for it. I decided to have fun and enjoy the rest of the run, which I did.

I was able to see the ‘super dad’ pushing his son in a wheelchair the whole way. I ran with him for a mile and I have to say he is a neat man. I asked him if he would run without his son just to see what it would be like and he said that running a race and leaving his son at home would be like running a race and leaving his shoes at home. He is truly an inspiration.

I just want you to know that all the work, training for 8 years, 1000’s of miles logged, over a hundred pair of shoes, countless races, blisters, cramps, pulled muscles, running outfits, throwing up, back problems, losing over 40 lbs and many more things was completely worth it. I would do it all again and then some to have this experience again. I cannot say enough about how cool this was.

Thank you to everyone for their support and help. Without you this would not be possible for someone like me. I cannot wait to be here again next year. I would like to run a sub three hour marathon next!

Duane Slade, Mesa Arizona

My Boston Marathon Profile!

Running Advice and News is doing a series of profiles of first-time Boston Marathon runners and they ran one on me today!

Check me out! I’m feelin’ like a little celebrity. But then everyone that goes to Boston for the first time gets this treatment, right? OK maybe not, but it’s pretty cool.

Coach Joe, who is the editor over at Running Advice and News, ran with me in the Ragnar Del Sol relay a last month, so I guess that was the sting that got pulled.

Anyway, you can check it out by clicking here.

Good luck to all the other Boston Marathon runners and thanks to all of you that have been wishing me well.

Duane Slade, Mesa Arizona

It’s Boston Marathon week!

I’ve been working toward and dreaming of running the Boston Marathon for years. Now it’s going to really happen. One week from today, I will be running in the streets of Boston with countless thousands of people screaming for me. It’s amazing and awe inspiring.

I’ve heard that my friend Coach Joe English is going to be running a profile about me on Running Advice and News this week, so I’ll let you all know when it is posted and I’ll post the article here on the blog.

Anyone else out there going to Boston or that has run Boston that has something they’d like to share?

I realize that I’ve been doing a lot of talking about running since I started writing this blog. I promise, after Boston I’m going to explore some other topics, but I’m just really excited about the race coming up on Monday. Can you blame me?

Wish me luck!

Duane Slade, Mesa Arizona