Miami a Top 10 Global Destination for Commercial Real Estate
On the heels of a very strong 7-year run of foreign capital buying Miami condos and homes, Miami has something new to be cheerful about — the growth of foreign real estate investment capital now pouring money into Miami’s commercial real estate sector.
According to the latest research from global property advisor CBRE Group, worldwide commercial real estate investment activity reached $407 billion in the first half of 2015, the strongest first half (H1) to a year since 2007, and up 14 per cent year over year.
The Miami metro area ranked 7th among the world’s leading global capital destinations, just ahead of Tokyo and just behind Washington D.C., with a total of $7.7 billion of foreign and domestic investment during the first half of 2015. This is the first time since the global financial crisis that the Miami metro area was among the top 10 global real estate investment destinations.
Though rapid growth has been maintained for several years, the rate of growth slowed in H1 2015 and was vastly different at a regional and country level. The Americas experienced growth of 31 per cent year-over-year, while a strong dollar impacted activity in EMEA (Europe, Middle East & Africa) and Asia Pacific (APAC). In dollar terms, EMEA was up just 5 per cent from H1 2014, with APAC down 19 per cent year-over-year. When measured in local currency EMEA grew by 25%, while a decline in APAC was more muted at 9% year-on-year.
Last year, the Miami metro area ranked 12th globally, with a year-end total US $13.1 billion invested from foreign and domestic sources. The Miami metro area also continues to be a particularly attractive destination for international capital, rising from 49th place in 2013 to 19th place in H1 2015, with a total of $913 million invested from international sources so far this year.
The U.S., U.K. and Germany remain, by far, the largest CRE investment markets globally. A combined total of $301 billion was transacted in these three countries in H1 2015–representing an unusually high (74 per cent) share of the global market and 10 per cent above the long-term average of 64 per cent.
“Capital flows into real estate are well supported. Even ignoring rental value growth, real estate offers a ‘spread’ over bond rates of between 200 to 300 bps across global markets and capital will continue to be attracted to the sector,” said Iryna Pylypchuk, Director, Global Research, CBRE. “The influx of new sources of capital targeting real estate as part of long-term liability-matching allocation strategies is helping to extend the investment cycle. At the same time, this pushes the ‘old capital’ into niche sectors, prompting expansion of the investment universe.”
The recent economic slowdown in Asia has led to China, Singapore and South Korea dropping down in the top 20 market rankings during H1 2015. Canada was the only non-Asian market to experience a notable fall in the rankings, with its western regions relying heavily on oil for economic activity, weaker occupier fundamentals slowed investment activity. Rapid uplifts in investment in Europe’s recovery markets Italy, Ireland and Spain meant significantly improved positions in the rankings.
Cross-border investors have grown in influence to become an important driver of CRE investment globally, particularly in the last 24 months, and are changing the shape of the market. The world’s leading destinations, in terms of global capital flows, is a balanced mix of cities across all main regions–London was the most targeted city by cross-border investors in H1 2015, followed by New York and Paris. This contrasts with the top destinations for overall investment where the bias is strongly on the U.S.–New York was the leading city overall, followed by London and Los Angeles.
At a regional level, the influence of global investors varies from as little as 10 per cent in the Americas, to almost 50 per cent of the market in EMEA. The largest contributor to these flows during H1 2015 was the U.S., accounting for a stand-out $25.4 billion of investment outside its home market. The next three largest sources were Canada ($8.5 billion), Germany ($7.1 billion) and China ($6.6 billion), with their combined volume still considerably less than the U.S.
“The influence of global capital is growing to the point that these investors are becoming the “market-maker” in setting the price in the most desired and liquid markets across the globe. Within this growing wave of cross-border capital, there are elements of old and new,” said Chris Ludeman, Global President, Capital Markets, CBRE.
“A recurrent wave of U.S. equity funds continues to explore global opportunities in search of higher returns off the back of strong buying power of the U.S. dollar. German capital is searching for steady investments outside their home market–a notable shift in strategy post-GFC. Despite low oil prices, Middle Eastern buyers remain active, with the investor base growing and strategies targeted at greater geographic and sector diversification.
“There are numerous new sources of capital that have emerged only recently. With its commodity driven economy slowing, Canadian investors have sought opportunities abroad. The lower oil price has triggered and accelerated global deployment of capital from the Middle East’s non-institutional investors, particularly private high net worth. However, of all the new sources, Asia has been the most captivating due to the size, speed and potential long-term impact brought by the recent regulatory changes; this has allowed many of the local pensions funds and insurance companies to invest globally for the first time,” Mr. Ludeman added.
Original article: http://www.worldpropertyjournal.com/real-estate-news/united-states/miami-real-estate-news
Big mergers, global buyers desire one-stop-shopping, industrial pricing may be at its peak, Wal-Mart shrinking, Apple’s fresh look, booming multi-family market — and more. It’s all here at the Commercial Real Estate National News Roundup for September 8, 2015.
Cushman & Wakefield Takes Historic Leap Forward, Commercial Property Executive, September 3, 2015 – Consolidation continues to shake up the CRE industry.
The Cloud’s Impact on CRE is Clear, GlobeSt.com, September 1, 2015 – Construction pipeline for data centers surges.
How the Global Economy is Affecting US CRE, GlobeSt.com, August 31, 2015 – Lower oil prices coupled with few jobs overseas cause investors to continue to be bullish on the US property market.
Top Tech Cities in U.S. Commanding Hefty Office Rent Premiums, World Property Journal, September 2, 2015 – Opportunities for CRE investment trending way up in markets that command up to an 87% rental premium.
It’s Not About Where You Do the Work, GlobeSt.com, September 2, 2015 – Productivity trumps location for many in today’s office market.
The Most Dominant Office Market Trend, GlobeSt.com, August 31, 2015 – Tenants are expanding and bringing out of state divisions to the Tampa office market.
Hot Baltimore-Washington Corridor Industrial Market Sees Another Sale, Commercial Property Executive, September 4, 2015 – Investors rush to buy property in industrial “promised land”.
NY Investor Grabs East Baltimore Industrial Site, Commercial Property Executive, September 2, 2015 – Existing tenants make acquisition very attractive.
Industrial Pricing Heads Toward Peak, GlobeSt.com, September 1, 2015 – Sales activity for industrial properties approaches 2007 high.
Can Wal-Mart Support 5,200 Stores?, 24/7 Wall St., September 4, 2015 – Will Wal-Mart’s empire expand or decrease in 2016?
Apple Stores are About to Change in this Huge Way, Fortune, September 2, 2015 – Apple stores to get a fresh new look soon.
Retail Development Picks Up in Louisville, GlobeSt.com, September 2, 2015 – National retailers flock to the I-65 corridor in Louisville’s metro area.
High Walk Score Makes MF Stand Out, GlobeSt.com, September 4, 2015 – Value-added properties that offer high walkability and family fun are very desirable in suburban areas.
The Latest on Rent Growth, Commercial Property Executive, September 1, 2015 – Multi-family rent growth holding strong, but volatile international stock market may trigger a cooling soon.
Steady Hiring Favors Multifamily, GlobeSt.com, August 31, 2015 – Consumer confidence and a record number of 20 somethings in the market drive multifamily income opportunities.
Brian Fielding is known for offering expert advice when it comes to buying and selling homes, but many people out there might not be aware of the passion he finds for providing information about different causes that are dedicated to helping people, animals, the earth and more. Finding different charitable causes that a person is passionate about does often take time and research, but there are a few ways a person can realize if they are truly helping out or simply giving their money away. Here is some top advice that will help make selecting the perfect charity easier than ever.
Brian Fielding introduces one-stop-shop for charity news
Charities around the world now have an online venue on which to share their events, achievements and requests for assistance.
Brian Fielding Charities is making brianfieldingcharities.com the go-to place on the Web for the latest in charity news and calls to action.
The goal is to give both large and small charities an equal voice, said Brian Fielding, who is a real estate investor and philanthropist. The idea came to him when he began supporting Send Me on Vacation and Amigos de los Ninos, both non-profit organizations. The latter provides healthcare to children whose families lack sufficient funds to cover their needs. The former allows women with breast cancer to go on dream vacations with their families in order to lend them some emotional support.
As Brian Fielding was supporting and speaking to others about these charities, he realized that not many people had heard of them, even with websites of their own. He felt creating a hub for important but low-profile charities would help further their causes.
The current website will continue to feature a blog roll. However, it will soon include articles on other charities and their activities. Brian Fielding said he invites that charity organizations to submit their own posts for consideration. Once the content has been reviewed, it will be posted on the Brian Fielding Charities website with a link back to the charity’s website.
In addition, the Brian Fielding Charities website will also feature an Our Charity Partners page highlighting those charities that actively submit content for the blog.
While financially supporting each charity every day would be wonderful, Brian Fielding said, it is not feasible. What is possible, however, is informing the masses that these charities are out there and creating conversation about their efforts. This will in turn create recognition so that when people are able to give, they will know there are more than one or two charities out there that need their money.
Brian Fielding of Fielding Investments discusses why Chinese investment in real estate in the United States is a promising sign for good things to come.
As reported in the Wall Street Journal, Chinese investment in U.S. commercial real estate was nearly $6,000,000,000 between January of 2014 through March of 2015, making it likely that the evolving super power may one day soon exceed the traditional foreign investors in the United States like Australia and Canada. Brian Fielding of Fielding Investments reminds that this sort of activity is reminiscent of the 1980s, when Japanese individuals and companies ran up the price of a variety of real estate investments.
“We believe that while there are some parallels to the historical investment frenzy of the ‘80s, and that this flurry of activity is a sign that the Chinese investment in U.S. commercial real estate is a better indicator of that country’s interest in long-term investment of these assets.”
He went on to say that while some might be wary of another real estate “bubble,” that unlike their Asian counterparts, the Chinese are not merely seeking out “trophy assets,” which were bid up during that timeframe. Rather, the Chinese began their acquisitions as property prices were beginning their post-recession rebound.
“We see this activity as a prudent diversification strategy by well-heeled investors who recognize the stability of the U.S. real estate market,” added Brian Fielding.
Mr. Fielding suggests that the effect of this movement should be comforting to the investment community. He points to the statistics showing that the majority of the Chinese investment has been directed at the two coasts – with over $1B invested in California and $6B in New York since January of 2005. He goes on to suggest that the investment activity is primarily bi-coastal, not necessarily because the fundamentals of the real estate is perceived as being stronger. It is likely that this is due to the greater due diligence challenges in other parts of the country where foreign investors have limited knowledge and the lack of advisors with whom they have relationships to provide sufficient advice on purchasing decisions.
“We continue to recommend that private investors should use their unique expertise on their nearby communities to make educated purchase decisions,” Brian Fielding of Fielding Investments added. “While the small investor lacks the financial wherewithal to compete for quality assets in larger markets, he should have a wealth of knowledge about local communities, growth areas, highways, regional buying habits, needs and planned gentrification that other investors cannot possibly know nor appreciate.”
Fielding Investments views feels that the increase in foreign investment will only serve to keep the commercial real estate market very healthy and expect that as foreign investors decide to live and invest in the broader range of American cities. Therefore the value of quality assets, wherever they may be situated, will continue to appreciate.
Fielding Investments continues to emphasize that the most successful investors are those armed with the most knowledge, something that presents a very special opportunity for those persons who do the most due diligence and keep themselves most acutely aware of developments within their home and neighboring communities. Brian Fielding suggests that investors should attend planning and zoning meetings, track where investment in infrastructure will be made locally and statewide, and invest the time necessary to fully understand the office and retail market.
“We have seen the greatest success stories realized by those persons who make the effort and take the time to be the ‘best’ within a small area, rather than try to be experts in communities about which they have little firsthand knowledge,” reveals Brian Fielding.
Due to increased awareness of Fielding Investments and the advice shared by its principal, a new blog has been started where the casual to the expert investor can ask questions. That can be found at http://brianfielding.com.
Forbes recently came out with its list of the richest real estate tycoons, and Brian Fielding is providing some insight and commentary about the list.
How surprising is it that the United States is home to 29 billionaires who have built their fortune on real estate? Brian Fielding suggests that this fact is not surprising at all. Consider the recent report in Forbes that noted that throughout the world, residential property was up four percent (according to Knight Frank’s Global House Price Index) and commercial office rents were up three percent (credit to Cushman Wakefield research). The 4th wealthiest property tycoon, Donald Bren, has had his fortune grow primarily in California, but has investments in a broad range of properties including office buildings, golf clubs, marinas and apartments. Two Americans who recently were acknowledged for fortunes exceeding $1 billion are David Walentas, who focuses on development in Brooklyn, New York, and Jeff Sutton, who owns retail in Manhattan.
So what does this mean for the average person trying to save for their future? Brian Fielding of Fielding Investments opines that every individual has the capability of owning investment real estate, stating that it is only a matter of scale and location that should drive that activity. He explains that every citizen has special knowledge of their community, perhaps where they now live or vacation, or perhaps of the town in which they lived as a youth. The challenge, he states, is for the investor to capitalize on that knowledge and to expand their familiarity with local politics, development, zoning changes and by tracking the growth and decline of the office, retail, industrial, and special needs of those communities.
“Who knows better what side of town is growing, what areas are gentrifying, what new roads are planned and which new businesses are enjoying growth than the local investor?” Brian Fielding of Fielding Investments states.
He went on to explain that one should not simply assume they understand all of the elements involved in owning commercial real estate assets, but with a bit of diligence to understand the intricacies within that industry, any individual can solely, or in a partnership, find unique, local opportunities in which to invest.
“Our tax code invites private investment in real estate, and few other investments can be readily financed with both traditional and non-traditional financing,” Mr Fielding adds.
One needs to learn the “language” of the real estate investment world, a fairly straightforward methodology for demonstrating the value of an asset. Lenders abound for the well-informed and knowledgeable investor, the secured interest a lender obtains, and the knowledge that there is a cash flow off of that asset. These factors often encourage lenders to finance large portions of the purchase price.
“It is not only the quality of the land and building, but the creditworthiness of the tenant and the term of the lease that will encourage financing ventures up to 90 percent of the cost,” Brian Fielding shares.
There are few barriers for those who take the time to become an expert in understanding the community, budgeting, and financing issues. Mr. Fielding strongly recommends that those who wish to first tackle such a project retain competent counsel, establish relationships with the local lenders and consider having partners who have experience in construction and maintenance of commercial buildings.
He suggests that one can easily demystify the processes as being only for the select few. Rather, it is a state of mind and a willingness to invest the time to become competent and/or find experienced professionals in the areas of finance, building construction and maintenance and to be willing to devote oneself to becoming familiar with all matters in one’s selected community. For more information about commercial real estate, visit http://brianfielding.com.
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When investors are looking for options in the rest of 2015, they have a number to consider, but Brian Fielding knows that a quality commercial real estate property is the most advantageous purchase that an investor can make. There are many factors to consider when making such a purchase however. For example, an investor must decide what kind of property they want to invest in before they make their purchase. They may also need to purchase a property based on the amount that they have to invest. In any case, decisions must be made, and to help individuals make smart choices about their commercial real estate purchases Mr. Fielding and Fielding Investments advise that individuals take into consideration some of the following commercial real estate trends that may be seen this year.
Job markets impacting real estate market: Many cities are seeing their job markets continue to bounce back this year. Additionally, many new jobs are being created that were not in play a year ago, especially jobs in technology fields. These positions lead to an increased need for office spaces reveals Brian Fielding. Because of this new demand, these cities will provide many new and safe opportunities to those who have considered purchasing office properties.
Low supply and high demand: In many areas, there is an increased demand for quality properties. However, not all of these areas have the properties to fit those needs. Because of this, those who own high quality properties can charge premium rates for quality tenants. Additionally, Mr. Fielding reminds investors that they will also see lower vacancy rates.
Demand increase on multifamily properties: Another trend that Brian Fielding would like to point out to investors this year is the rising demand for multifamily properties such as apartment buildings. The demand for these is higher than it has been since before the recession. This demand seems to be one that will last for quite a while yet, and quality properties that are near mass transportation and other urban necessities are in especially high demand.
When individuals keep in mind these changing factors for the commercial real estate market in the rest of the year, they will be better able to understand the factors that will decide which investments are the most promising. Brian Fielding knows how important it can be for investors to understand these trends and changes and is proud to be offering individuals the most up to date information on changes in the commercial real estate market. To learn more please visit www.brianfielding.com/
When considering a commercial real estate purchase, individuals must review these property factors shared by Brian Fielding.
A commercial real estate purchase is usually a favorable investment that will offer a high return in the future. However, Brian Fielding of Fielding Investments points out that it is essential the purchased property is one that meets the needs of the investor. There are a number of factors that will determine if one should buy the property they are interested in. Viewing a number of properties, considering these factors for each, and then comparing the results to each other, will allow an investor to make the right acquisitions. Here Mr. Fielding reveals the key factors to consider when viewing a property.
Uses of the property: If the investor is looking for a space that can fulfill a specific purpose, they must keep that purpose in mind when they find an appealing property. Commercial uses may include office spaces, retail spaces, or industrial spaces, but not every property can be used for any of these purposes. Brian Fielding says it is essential a buyer finds out exactly what the building zoning allows before they purchase. If restrictions do not allow the property to be used for the individual’s chosen purpose, they can look for one that does.
Condition: Mr. Fielding reminds investors that it is extremely important to know the condition of the building before purchasing. Extensive repairs may add to the initial cost of the property and can also delay the owner’s ability to rent the space. There may also be liability issues in the long run if these problems are not found and addressed quickly. If there are a number of issues with the property, it should prompt the buyer to consider the additional costs before making the purchase.
Location: The location of a property is one of the most significant determiners to the value and potential of the property. When researching a property, investors must look at the surrounding neighborhoods, other buildings in the area, the recent growth in the area, and traffic for relevant businesses nearby. Choosing a piece of property that is in close proximity to possible resources, for example, may increase its value, as might recent economic growth in the surrounding community.
Liability: When looking at a property for purchase, investors should be aware of any potential hazards that may be on or associated with the property before they decide to buy. This, Brian Fielding shares, is because the liability may be attached not to the current owner, but instead to the property itself. When the property is transferred, so may be the responsibility, even if the hazard was caused by the previous owner. Once the real estate has been bought, the new titleholder may be responsible for any problems with the property, any harm the property is causing to the environment, or any zoning laws that the property is breaking. For these reasons, it is essential that all hazards and liabilities are out in the open and considered before a purchase is made.
Knowledgeable negotiation: There are innumerable considerations that need to be analyzed when establishing the value of any asset. Brian Fielding reminds investorsthat knowing all the details of a property, including its downfalls, requires significant “due diligence.” Unless the investor has great experience and knows how and where to look for defects and potential problems, they should think about retaining an experienced consultant with extensive experience in like transactions.
Available Professionals: There are many experts whose skills can be utilized by those who are buying commercial real estate. These include specialists such as commercial real estate lawyers, investment authorities like Brian Fielding, contractors, accountants, and a number of others. Careful investors will consult these experts throughout the acquisition process. This will help the buyer along the road to choosing and purchasing the commercial real estate property that is most fitting for their purposes.
Brian Fielding of Fielding Investments shares some of the most common terms in the commercial real estate market and what they mean for potential investors.
Now that a new year has begun and the commercial real estate market is showing a number of promising trends, Brian Fielding knows that individuals are looking for ways to become players in the market. These individuals want to make sure that they can secure an investment that will show them a strong return, and commercial real estate is one of the smartest ways to guarantee such a return. However, those who are interested in the market must first establish a strong understanding of it, and must know everything from the most important steps toa successful commercial real estate purchase, to the jargon that is used in the industry. To aid those who are interested in purchasing commercial real estate, Brian Fielding shares his expert knowledge on some of the most important terms used in the market.
Cap Rate: Also known as capitalization rate, Brian Fielding shares that this term refers to the method used to determine the value of a property that is producing a regular income. The number is calculated by taking the income of the property and dividing it by the total value. This process is used to determine the possible future profits on the property.
Net Operating Income (NOI): The NOI is used to determine the annual income of a property for the owner. A profitable property should produce a positive NOI. Brian Fielding reveals that this number is found by first determining the property’s gross income for the year. The investor must then subtract their total operating costs for the year. This will determine the property’s NOI and whether or not it has been profitable.
Cash on Cash: This term refers to the rate of return on an investment property. The cash on cash return measures the relationship between the down payment and investment already made on a property and the annual return. This number is found by dividing the annual dollar income by the total dollar investment. Brian Fielding points out that once the cash on cash return is determined it can be used to compare the property to competing ones.
With knowledge of the industryand an understanding of key terms, individuals should rest assured that they will be able to make informed decisions about investing in commercial real estate. Brian Fielding is glad to offer this key information to aid others as they take advantage of the real estate market and begin taking the steps to pick a profitable property. For more information visit http://brianfielding.com/.