Archive for March, 2009
Posted by Sibet B Freides in Demographics, Real Estate Trends on March 10th, 2009
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Out of state real estate shows in the northeast bode well for prospects. We are still talking constantly with the Baby Boomers who are ready to move on with their life, as we have been and will continue to do so for the foreseeable future.
The Settings Development Companies, which has properties in GA, SC, and NC, has attended real estate shows out of state through RPI Media in Reston VA (DC area), Chicago, IL, Long Island, NY and Parsippany, NJ. Each show was attended by 600-900 couples, specifically to have the opportunity to look at approximately 45-50 developments throughout the southeast. These folks have either been invited to stop by to see a certain community or have purchased a ticket to come to the show; they are all there to see what they have as an option for retirement, pre-retirement, or a second home.
I went to the DC show and personally met with couples that were there. They were still tired of the cold winters (a severe winter up north always leads to a good spring down south) and the crowded hustle and bustle of the cities, not to mention high taxes. Most were ready to get to the sunny south.
The bottom line is that there has been a great response so far in 2009 and many appointments were made from these shows. We know from experience that they will lead to a certain percentage of sales and closings through a professional presentation! This initial positive response puts us and other communities I talked with way ahead of last year for the first and second quarters. These buyers feel the “brevity of life” and “can’t wait on others to fix the economy”. They want to get started on the “rest of their life’s plans” even if it will means scaling back some.
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on March 10th, 2009
Someone recently asked me what should be done to survive as a commercial broker in today’s market. Several things come to mind against the backdrop of all the calamitous bad news that we face everyday.
This is a good time to go meet and talk with your clients. They certainly aren’t working on deals. Go see them and get to know them all over again. Reforge relationships. You will be more poised than your competitors to be conversant with and their capabilities as opportunities begin to resurface.
Take advantage of distressed projects now on the market. There are more and more opportunities coming on the market where lenders and partners took possession of underperforming or cash strapped projects everyday. They cant manage/lease/operate these deals. Find the developers who are liquid, or better yet match them up with equity sources who stand ready to plunge first into areas of the best opportunities that can be bought at fractions on the dollar of previous basis. CASH is KING.
Identify, prospect and get to know the equity sources. You bring a tremendous value to your developer clients when you are able to match them up with the right equity sources which will enable them to access more deals and to effectuate deals. To do this you must be able to ‘talk the talk’ of CFO’s and have the ability to generate and walk through proforma’s and analysis. This is a much better way of getting involved with a favored project if you do not control the listing than simply trying to bring a buyer. CASH is KING.
Last but not least, the market has experienced a new paradigm. For 15 years, financing, credit and leverage has been easy to come by. For that reason there were more buyers than product to go around. Product was scarce and Listings were an emphasis. That was then, this is now. Find and establish relationships with buyers who have deep pockets. You may even have time to cultivate foreign money and investors, like you’ve been telling yourself to do for years.
While you are at it, upgrade the quality and size of your transactions. In a downturn such as this, a general flight to quality will exacerbate itself. Try to work on projects for which the quality justifies institutional exit strategies. There is more money at the top.
Article Written by Bruce A. Davis, Senior Partner of Bryant Commercial Real Estate Partners, LLC of Atlanta, Ga www.bryantcre.com and member of Market Solutions Group
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