|
|
|
No. California Commercial Real Estate Forecast Program: Office, Industrial Hotel and AG By Keith, Darcy* On February 29, 2012, the Bay Area and Sacramento Chapters of the California Receivership Forum joined together in San Francisco for an evening program and networking event. The topic was: 2012 Nor Cal Commercial Real Estate Forecast: Office, Industrial, Hotel, and Agriculture:
The program was moderated by Clay Dunning, Receiver and President and founder of Sierra Commercial Real Estate Services, Inc., and was invaluable as specialists in four distinct sectors of commercial real estate brought us up to date of their markets. We thank our two sponsors: Commercial Solutions Insurance Brokerage, a full service insurance brokerage specializing in investment property insurance, and KL Capital Partners, a real estate capital services firm that provides debt and equity placement for commercial and residential real estate transactions. The speakers were, in order of presentation: Kevin Hatcher, VP of Colliers International in Oakland; Rick Schuil, an Agricultural Real Estate Specialist and Partner with Schuil and Associates, Inc.; Robert Greeley, Receiver with Greeley, Lindsay Consultant Group; Dennis Gemberling, President and Principal of Perry Group International; and Seth Siegel, Executive Director, Capital Markets ¬Group of Cushman & Wakefield of California, Inc. Kevin focused on the industrial sector. His primary area is the 880/80 corridor, noting that growth in Northern California is predominantly trending east and the Central Valley. Research and development is the softest of the industrial sectors in the area but is starting to pick up. Brokers are a great resource for property values. Rick focused on the agricultural industry, observing that agricultural values are increasing and sales are up. On the other side, the manufacturing supporting agricultural products, such as cotton gins and tree fruit packaging facilities, has become obsolete and is being repositioned in the industrial market for other uses. The dairy market is down. Bob provided insights for newer receivers and warned of the risks involved with multiple properties, lots of forbearance agreements, insurance changes after bankruptcy within 30 – 90 days, change of insurance required if property is vacant, and other issues receivers need to monitor. Dennis focused on the hotel industry and noted the Bay Area and Sacramento are in the top 25% of markets, and the valuation for hotels did not drop significantly over the last couple of years. Hotel foreclosures were down in 2011, and the same is expected for 2012. Seth indicated that San Francisco has a 5.5% cap rate, and properties below water are being worked out with the exception of the tertiary markets. The forced bankruptcy of Lehman Brothers preserved the value of some of the assets which are currently being marketed. The CMBS world is coming back in the office market with much greater scrutiny. Overall, the event had a large turnout, great
food, and was a lot of fun in the networking setting. It was nice to meet
the members from Sacramento CRF as well as new members in the Bay Area.
|