Austin commercial real estate foreclosures in 2009 increased to more than double their 2008 levels, reflecting the effects of the recent nationwide real estate market difficulties. Austin suffered the highest rate of commercial foreclosures in the state of Texas, but other large metropolitan areas were significantly affected as well. This increase is attributed in part to large-scale layoffs in the manufacturing sector, which have created problems for a number of local industrial concerns. The commercial foreclosure trend is expected to continue throughout the first half of 2010, due to continuing economic woes; experts warn against overly optimistic expectations for the manufacturing and commercial sectors. Approximately $500 billion in commercial loans are expected to come due for refinancing in 2010, with as much as $800 billion more in 2010; this will likely spur additional periods of high foreclosure rates as businesses struggle to find financing in the current lending climate.
Industrial real estate properties were hardest hit, with a 400 percent increase in foreclosures over 2008. Retail shopping centers and vacant land also experienced a less dramatic rise in foreclosure rates. Some economic analysts see this as an opportunity for businesses to acquire additional space at bargain prices; with real estate prices in some areas at near-record lows, many companies that are currently renting space may be able to purchase property instead. This may actually spur an increase in commercial real estate sales during 2010 as businesses take advantage of the opportunity to expand their holdings at discount prices.
Commercial foreclosures represented about seven percent of foreclosures in the Austin area. One bright spot in the economic outlook for these properties is the increase in companies looking to expand into the Austin business market. Austin is an attractive location for commercial relocation due to its highly-trained labor force and resilient economic base. Most analysts in the area expect that corporate relocations and expansions will continue to increase in Austin, spurred in part by the lower cost of commercial real estate in the overall market.
Found in my pile of magazines and folder of e-newsletters:
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Apartment REIT Stocks Fall to Five-Year Lows
Industry is hurting, but not as badly as other commercial sectors.
The stock market is falling to levels not seen since 1997-and apartment REITs are not immune. A number of leading firms-BRE Properties in San Francisco, Chicago-based Equity Residential, Apartment Investment and Management Co. in Denver, Essex Property Trust in Palo Alto, Calif., and AvalonBay Communities in Alexandria, Va.-have all seen their stock values plummet to five-year lows.
Read the full story at Multifamily Executive.
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UL begins certification of green products
January 14, 2009
Building Design and Construction
Underwriters Laboratories, the 114-year-old organization known for consumer product safety testing, has begin offering assessment and certification of environmental product claims.
UL’s two new programs launched in January 2009.
“The question of what’s green and what’s not green is being asked more and more,” Christopher R. Nelson, UL’s director for corporate development, said at Greenbuild in Boston.
“UL consumers really have been asking us how do you fit into this space, they look to UL for credibility, and retailers have been asking us (the same questions) as well.”
Get the complete details from Building Design and Construction.
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The saturation of rental units on the Austin market is good news for tenants who can expect cuts in rent and possibly pick up some amenities as landlords vie for their attention. Yet, the demand remains high for upscale urban apartments as people look for residential units closer to their place of employ.
According to the apartment research firm, M/PF YieldStar, occupancy for June 2008 stood at 93.4 percent, down 1.5 percent from March and nearly 2 percent from the same time in 2007. This should raise some concerns with landlords, as the same firm predicts a flattening of occupancy for the rest of 2008, and foresees a drop of possibly 3 percent in 2009.
Construction of nearly 13,000 units is planned for the Austin area through 2009. Greg Willett, vice president of research for M/PF, says the real need is for about half that amount, based on demand which he feels has become sluggish.
This pessimistic opinion is not shared by developers in the Austin market, however. Spencer Stuart, managing director of Legacy Partners Residential Development Inc., says rental activity is strong in both downtown and close by suburban areas. Rising gas prices and the desire to be close to the action is fueling the demand for higher priced units closer in to the city.
Still, the rise in rental rates does appear to be slowing down and tenants will indeed find bargain lease rates. Rents rose less than 4 percent from 2007 to 2008, with average monthly rent standing at $839. Yet, this means the market becomes more competitive, and that means good deals for prospective tenants.
