February 2nd, 2021 | Orange County, CA
With 2020’s uncertainty behind us, industry leading economists predict major economic and commercial real estate growth in 2021 and the years to come.
According to data from SVN Research & Chandan Economics, Real personal consumption expenditures grew at a seasonally adjusted 2.5% in 2020 Q4 and residential investments continue to grow at a seasonally adjusted annual rate of 63.0% in Q3 and remained high at 33.5% at the close of in Q4.
1. NEW COVID-19 RELIEF BILL
The White House has announced its $1.9T “American Rescue Plan”. The bill is aimed at addressing COVID-19 fallout by providing additional economic relief to households, small businesses, and State & Local Governments. This package is up for debate but it’s very likely that Americans will still receive stimulus, albeit slightly more conservative.
2. COVID-19 VACCINE
In addition to $1.9T Relief Bill, Biden signed an executive order invoking the Defense Production Act. The order is aimed at producing components for vaccine and speed up distribution. As of now, the bill is calling for investment in treating the virus, establishing occupational safety standards, and extending relief to nursing homes and higher education.
3. PENT-UP DEMAND
During 2020’s Q2, we saw countless deals fell out of escrow. This indicates that there is high demand for commercial property. According to Real Capital Analytics’ All-Property Commercial Property Price Index (CPPI), prices grew by 1.6% in December. This is up from the previous month and continues to grow at 7.3% year-over-year.
The combination of these 3 factors is set to bring consumers back to shopping centers and fuel tourism. Once people feel safe, they will start spending again. As the economy strengthens, companies will adapt to the changing landscape and create new strategies to navigate it.
If this growth continues, many economists are projecting a major real estate revival for all asset classes.
What this means for each product type:
MULTIFAMILY
Transaction activity is steadily returning to a normal pace in the Apartment sector. In Q4 2020, RCA tracked $56.7B worth of Apartment transaction volume, rising by 0.1% from the quarterly volume set in Q4 2019. Despite varying rent collections and uncertain demand dependability, prices rose 8.3% when compared to December 2019. With talks of extended landlord and rent relief programs, confidence in Multifamily should continue to steadily rise.
OFFICE
Prices rose in December by 0.8% from November. Compared to December 2019, Office sector prices rose 1.5%— the lowest annual increase since 2010. As the appeal of remote work dwindles, companies are reopening. We are likely to see a return to office, albeit downsized in some cases. Also included in the Biden administration’s proposal is a provision aimed at funding “1000,000 public health workers” through a national public health jobs program. This program could stimulate a need for office properties.
INDUSTRIAL
The industrial market remains strong through December, with prices rising by 0.6% month-over-month and up 8.8% from 2019 to 2020. This product type is seeing the highest annual growth rate.
RETAIL
Not surprisingly, retail is underperforming. From December to November, prices dropped by 0.1%. Since December 2019, prices in the Retail sector are down by 4.3%. As more of the population is vaccinated, loosening restrictions will help prices return to normal.
As with any important financial decision, it is crucial to have expert advisors on your side. Whether you are looking for Orange County commercial real estate for lease or you’d like to list an Orange County commercial property for sale, our team is experienced, knowledgeable, and ready to help you. Contact us today.
Are you interested in purchasing commercial real estate but need guidance on where to start? The first step should always be setting a clear investment goal. Whether your goal be buying the property solely as an investment, an investment as an owner-user, or an investment as part of a 1031 exchange, the team at SVN Vanguard can help you help find the ideal property.
Once you’ve narrowed down your goal and before jumping into your investment, we can’t emphasize enough the importance of doing your due diligence. We are here to help, which is why we’ve narrowed down our TOP 5 tips for purchasing the right investment property.
1. Location
The old saying, “Location, location, location.” plays a huge factor in this scenario. Location is of utmost importance when buying an investment property. Before signing a contract, always make sure to consider the neighborhood, visibility, traffic drivers and overall ease of access. Will forecasted demographic trends be attractive to tenants?
2. Growth Projections
Are you familiar with the projected growth trends in the area you’re considering buying in? This is just another reason to to get counsel from an SVN Vanguard commercial real estate advisor who is experienced and knowledgeable about the trade area. A buyer should choose an area where demographics are stable or growing. Give thought to which new businesses are moving into the area. Are there any changes coming in terms of transportation or road systems? Since these items affect property values for better or worse, it’s crucial for a buyer to become familiar with them.
3. Property Inspection
Physical inspections are a must when purchasing commercial property, or any property for that matter. Inspections of the roof, mechanical systems, plumbing and structural integrity of the building play a big role when buying property. Performing a Phase I Environmental Site Assessment is crucial. The assessment will tell you if previous uses of the property are threats to the environment, help find the true property value and signal potential liabilities to come.
4. Tenants
In many cases, investors look for properties that are fully leased. If you are looking to purchase a fully leased property, consider the reputation of tenants already leasing at the site. The general public’s perception of a business can sometimes say a lot about the business owner. Also, it’s never a bad idea to look into a tenants’ cash flows and the growth projections for their specific industries. One thing to also consider is whether the property and surrounding community would benefit from new tenants that could help the area thrive and bring more traffic.
5. Flexibility
When purchasing an investment property, a buyer needs flexibility. In the event that a tenant can’t make rent, the surrounding area changes, or something else doesn’t go to plan (i.e. financial shutdown, pandemic, general disaster), you need options. In these situations, it’s crucial to have an SVN Vanguard commercial real estate advisor help you navigate your path ahead.
Commercial real estate is a great investment that can diversify your investment portfolio and bring you additional cash flow. Follow these tips to make sure you get the most out of your investment and contact us for any commercial real estate needs. We provide industry-specific service across a variety of asset classes.
Considering buying investment property in Southern California? We are experts in San Diego and Orange County commercial real estate. We can help.
Are you a lessee? SVN Vanguard can also help you find San Diego and Orange County commercial real estate for lease. Contact us for more information.
By Michelle Musoke | September 29, 2020
SVN International Corporation (SVNIC), a full-service commercial real estate franchisor of the SVN® brand, is pleased to announce and welcome a new Executive Vice President of Growth, Leslie Bateman.
SVN’s current Chief Growth Officer, George Slusser, plans to retire by the end of 2020; Slusser will pass the baton to Bateman, who will oversee SVN’s growth and expansion plans.
Bateman will be responsible for the execution of all external growth strategies at SVN and will be responsible for designing and driving the company’s second wave growth initiative.
“We are thrilled to have Leslie on board,” said SVNIC President and CEO, Kevin Maggiacomo. “Her background in tech platforms and services as product businesses lends exceptionally well to SVN’s mission to disrupt and optimize the CRE brokerage industry.”
“I am incredibly excited to join the team at SVNIC, especially at such a pivotal time for the industry. The potential to amplify growth is extraordinary,” said Bateman.
Bateman joins SVN from Uber, where she was a founding member of the Uber for Business team, Uber’s first global B2B Sales team and Enterprise offering, as well as the pioneer behind the Uber for Business Real Estate offering, which focused on the application of Uber technology with the real estate industry to enable property owners and managers to attract and retain tenants through transportation innovations. Prior to her time at Uber, Bateman spent 12 years in New York in strategy and sales across Technology, Pharma, and Financial Services industries.
A proponent of advancement through disruption, Bateman is particularly passionate about bringing forward progression to the rapidly evolving commercial real estate industry through technology and innovation. She is a strong supporter of fostering women’s involvement in leadership and within the real estate industry. Bateman lives outside of Boston, MA with her husband and two daughters.
About SVN International Corp. The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com.
All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/
Originally posted on SVN.com
SVN is a National Commercial Real Estate Brokerage Firm founded in Irvine, California in 1987. A globally recognized commercial real estate brand, SVN is united by a shared vision of creating value with clients, colleagues and our communities. Currently, the SVN organization if comprised of more than 1,500 commercial real estate Advisors and staff serving 500+ markets. In addition to traditional investment sales brokerage, SVN | Vanguard is active in the sales and leasing of Retail, Office, Industrial and Multifamily products.
SVN | Vanguard currently has two offices in Santa Ana and San Diego and serves both Orange and San Diego Counties. Our expertise in the Southern California market, as well as our access to national resources, sets us apart from competitors and offers value to our clients.
However, the pandemic has changed investment trends in Los Angeles, with more capital exiting the state.
By Kelsi Maree Borland | September 25, 2020 at 04:00 AM
Orange County apartments have actually held up through the pandemic. Since the start of the pandemic, CBRE brokers have been tracking apartment rent collections, and they have found that rent collections have consistently trended above 90%.
“When COVID-19 hit we did experience market anxiety that sidelined a lot of people. At that point, we started tracking rent collections– we’re now in the fifth month of doing so—and realized rent payments remained at 90-plus percent month over month over month,” Dan Blackwell, EVP in CBRE’s Newport Beach office, tells GlobeSt.com. “At these high levels, we have seen bank lending confidence come back, followed by investor interest.”
While rent collections have outperformed initial expectations, apartment investment activity has been disrupted. Capital is moving out of the state at a faster rate than before the pandemic. “We have always had a good portion of capital flowing out of state, but COVID-19 has accelerated that trend somewhat,” says Blackwell. “Something to note is that many more of our clients want to stay in multifamily whereas in the past, quite a few investors have opted to trade out of multifamily and get into out-of-state retail.”
In addition, owners are trading out of existing California assets into properties outside of the state. “COVID has fast-forwarded some investors’ exit strategy. We’ve seen an uptick in quality assets under long-term ownership come to market,” says Blackwell. “Certain investors are staying put in California. They understand future headwinds and are looking for assets they could improve on in submarkets that have good fundamentals. It might be an owner of a property in Los Angeles looking for something to exchange into in a less restrictive market in Orange County, for example.”
However, there are fewer buyers for these opportunities. “While the buyer pool has probably dropped in half, the pricing isn’t that far off because of good rent collection and favorable interest rates. We have closed 17 transactions this year so far, which illustrates the continuing activity in the multifamily space,” says Blackwell.
That doesn’t mean that there is no demand for multifamily in Orange County. In fact, some recent legislation has helped to fuel investment. “Many of those looking to invest in multifamily properties are seeking new ways to value add. That’s why accessory dwelling unit properties have become increasingly attractive to many of our clients,” says Blackwell. “This designation, which was introduced in California earlier this year, provides more flexibility in how you can alter a property. For example, convert garages, common areas and rec-rooms into dwellings.”
Looking ahead, investors are focused on real estate-related ballot measures that could continue to impact investment viability in the market. “What is on people’s minds now are less the presidential elections but the local propositions and ballots,” says Blackwell. “As we get closer to November, these topics are moving to the forefront of investors’ minds. A good portion of them are taking a wait-and-see approach while others are fine to act now, taking a longer-term view.”
Originally posted on GlobeSt.com
By Michelle Musoke | September 10, 2020
SVN International Corporation (SVNIC), a full-service commercial real estate franchisor of the SVN® brand, was ranked number one on the list of the Fastest-Growing Multifamily Property Management Companies in 2020 by Multi-Housing News (MHN).
The MHN rankings reflect SVNIC’s strategic growth from 2017 through 2019. During this time, SVNIC increased its management portfolio from just under 6,000 units in 2017 to over 18,600 units, marking a remarkable annual portfolio growth rate of 81.6%.
“We are deeply committed to the exponential growth of our customized asset and property management businesses and to delivering a total support system to both our private and institutional clients.” said Kevin Maggiacomo, President & CEO of SVN.
Read the full article HERE.
About SVN:
The SVN organization is a globally recognized commercial real estate entity united by a shared vision of creating value with clients, colleagues, and our communities. The SVN brand is comprised of over 1,600 advisors and staff in more than 200 offices across the globe in six countries. Our brand pillars represent the transparency, innovation, and inclusivity that enables all our advisors to collaborate with the entire real estate industry on behalf of our clients. SVN’s unique Shared Value Network® is just one of the many ways that SVN advisors create amazing value with our clients, colleagues, and communities. For more information, visit www.svn.com.
All SVN offices are independently owned and operated. To learn more about becoming an SVN commercial real estate business owner, visit http://www.svn.com/franchising-opportunities/.
