Today, a good location, well-maintained units, attractive common areas and the right amenities are no longer enough to keep occupancy rates high and the property value of an apartment building up. Instead, success in commercial real estate investing can often hinge on smart property management, which can ensure that a seemingly profitable investment doesn’t instead turn into a negative cash-flow mistake.
Lead paint remediation in Massachusetts. Soil contamination in Connecticut. Asbestos in New York. Environmental issues are a common occurrence throughout our pipeline of multifamily and mixed-use transactions. Among all of the factors that investment real estate buyers and sellers need to be aware of, environmental concerns have become increasingly important since the 1980s after judicial decisions related to the liability of property owners to effect property site cleanup. Environmental issues with land or buildings can greatly reduce their value, make them difficult to finance and, if a contaminated property is purchased, the buyer may be responsible for the cost of clean-up even if the buyer did not cause or contribute to the problem.
While improving fundamentals continue to drive a strong recovery in Connecticut’s multifamily sector, most asset classes have not fully recovered from the recent recession in terms of rents and occupancy. Investors in retail, office and industrial properties continue to look for job growth as a leading indicator to a rebound in asset values.
With investment real estate trading at capitalization (Cap) rates close to their historic lows for most property classes, there is a growing concern that low interest rates may be driving commercial real estate prices to unsustainable levels.
With investor sentiment in commercial real estate on the rebound, the National Real Estate Investor Sentiment Index rose to another high in the first quarter of 2013 — up 3 points to 174. This is an especially strong vote of confidence because the survey was conducted in late December and early January when we were all focused on the potential impact of the fiscal cliff on the U.S. economy.
We are delighted to let you know that we won the CoStar Group’s prestigious “Power Broker Award™” in the Westchester/Southern Connecticut region for 2012! This annual award recognizes the “best of the best” in commercial real estate brokerage by honoring the commercial real estate firms and brokers who closed the highest transaction volumes in commercial property sales in their respective markets. It’s a great honor to receive this acknowledgement from the industry.
With spring just around the corner, the first blooms of the season can’t be far behind. But while we’re waiting, the Bronx is already blooming – at least the Bronx investment real estate market. It’s been firming up over the past six months, and we see that activity continuing through the rest of this year.
Over the past decade, I’ve had the privilege of hiring, training and deploying dozens of aspiring real estate agents. As a mentor, it’s critical that I provide the new agent with a roadmap for personal execution and help measure and manage it along the way.
We recently blogged about the use of IRS 1031 as a preferred strategy for active real estate investors that wish to defer their capital gains liability. In its current form since 1986, a “1031 exchange” is a guideline for selling one qualified property and then buying another qualified property within a specific period of time. While a “1031 exchange” enables investors to reinvest funds which otherwise would have been paid to the IRS, the specific timeline for compliance with IRS 1031 is often problematic. It’s not often likely an investor can identify a suitable exchange property following the sale of an asset within the 45 days allowed by the IRS.
Northeast Private Client Group