Feb

28

Good Time to Buy Commercial Property

Filed Under National Market 

While the other markets are crying…

The Residential Real Estate collapse… the Credit Crunch … Wall Street swoon…

It’s Still A Buyers Market in Commercial Property

With the relentless drumbeat of negative market news and the current funding credit crunch, you might be thinking now is NOT a good time to be buying commercial properties.

Not so … here is the word on the street…

These market forces have actually made this one of the best times to continue to acquire commercial properties and build your portfolio.

Here are 4 Reasons why . . .We are very active in the market with over 1000 units of multifamily under contract and researching new properties daily. Here’s what we are seeing that is quite new and a pretty large change from conditions 6 - 9 months ago.

1) Uptick in Commercial Foreclosures: For the last couple of years the Commercial Property market has seen nearly as much speculative buying as the Residential side.

In the niche of properties priced at less than $10M - the segment dominated by non-institutional buyers - many people have overpaid for their properties. And the banks went along with them.

Many owners now find them selves over-leveraged and we are seeing an increase in Commercial Property Foreclosures. This is a bargain hunters dream

2) A Return to Rational Prices: The current credit crunch has positive effects. Those same speculative buyers and easy financing are now way gone. With financing MUCH more difficult these days and the speculators out of the picture, asking prices have come down to reasonable levels we have not seen in nearly a year.

3) More Flexible Sellers: Sellers know the lenders are only funding solid deals that are well priced. We are seeing sellers be MUCH more flexible on negotiations both at contract and retrade stages of the purchase.

And with the Speculative Buyers out of the market Sellers are seeing fewer offers as well. They are very hesitant to let your contract go if you are a serious buyer and much more flexible at the bargaining table.

4) Only Solid Profitable Deals Allowed: In fact, lender underwriting right now is so conservative that only solid, four star, profitable deals will get funded. Now is a great time to build your portfolio because, if you can get a property funded in this market, you are going to have a screaming profit machine when the market turns back up again.

Get ‘er done… So as you see the head lines day-after-day touting the bad news in the financial market, remember this…

Right Now is a great time to continue to look for good values in the property markets and if they’re underwritten now in a way that the banks will fund, you’re going to have a great project down the road.

Article Source: Commercial Property 2008 - While Everyone Else is Cryin’ Just Keep Buyin’

If you enjoyed this post, make sure to subscribe to the RSS feed or subscribe via email.

Comments

Leave a Reply