WASHINGTON – April 22, 2009 – Senior real estate executives believe market conditions in the income-producing real estate sector – encompassing office buildings, shopping malls, warehouses, hotels, and apartment buildings – are getting better, even though conditions eroded a bit in the second quarter, according to The Real Estate Roundtable Sentiment Survey for second quarter 2009.

Nearly 60 percent of the 120 survey respondents say that they expect conditions in the real estate market to get better within a year. This view caused a slight uptick in the Overall Q2 2009 Sentiment Index, which at 41 is up from the previous quarter’s score of 38 and its low point of 33 six months ago.

Most executives surveyed are troubled by the lack of access to capital. Eighty-eight percent of respondents think it’s harder to get a loan compared to a year ago, though 69 percent of respondents believe the situation will turn around in the next year. Likewise, 86 percent of respondents think equity financing has deteriorated from a year ago, yet 68 percent of respondents predict it will improve in the next year.

“There is access to both equity and debt, but they’re expensive. Banks are being very selective and are trying to pick survivors,” said one survey respondent.

Roundtable members’ portfolios contain over 5 billion square feet of office, retail and industrial properties; over 1.5 million apartment units; and in excess of 1.3 million hotel rooms. Participating trade associations represent more than 1.5 million people involved in virtually every aspect of the real estate business.

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by Tim Davis

Finally, after much to-do the liquidation of the Crane Cams property in underway – just two hours ago the intellectual property rights were sold at auction for $1.2 million. The purchaser is undisclosed at this time, but they were a group of 4-5 men with highly a highly organized plan of attack, each guy had volumes of printed material, one of them had a laptop running with an air-card, etc. The actual buyer was undisclosed, but several members of the group seated together bidding were identified to me as former directors of Crane Cams in the pre-Mikronite era. After purchasing the intellectual rights, this same group of gentlemen purchased all of the current inventory on hand, as well as the raw materials, and work in process. The then began purchasing equipment, very selectively I will add, and were the high bidders an every item they bid on with what seemed to be no regard to price. They did not purchase any of the older cam grinding equipment, but did pruchase most of the precision equipment that was selling in the early lots.

Also of note: Representative of Scorpion Performance were on hand, and after much press online about aquiring Crane Cams they ended up bidding $1m for the entire contents and assets of Crane Cams. That bid was defeated as the very next lot # was the intellectual rights alone, and those sold for the previously mentioned $1.2m. The Scorpion reps departed the bidding area shortly thereafter.

More details to come as the auction continues… You can see below that much of the equipment is in sad shape… like aging dinosaurs and museum pieces…

Click HERE for the previous report on Scorpion’s alleged purchase efforts.

Click HERE for the full report form Daytona Beach News Journal reported Bob Koslow.

UPDATE:

Following the disappointment that reports of a possible rescue of Crane Cams had not materialized, S&S Cycle has announced that it has stepped in to acquire some of the assets of the Daytona, Florida based manufacturer.

The deal involves the inventory, intellectual property and trademarks for all Crane automotive and motorcycle electronic products, and for Crane’s motorcycle valve train products.

The intellectual property portion includes designs, drawings and cam profiles. Crane automotive valvetrain products are not included in this acquisition. “Crane Cams was founded in 1953, and, like S&S Cycle, which was founded in 1958, it has become a respected and iconic brand in the high-performance industry”, said S&S in a news release of April 23rd.

S&S says it intends to continue to sell Crane products through the same distributors and dealers who have sold them in the past, and that they will establish a new facility in Daytona Beach, Florida, to manage the business and provide customer service and technical support.

This new facility will be staffed by many of the same personnel that Crane customers have worked with in the past, providing as seamless a transition as possible. S&S says that “while there may be some shortages of product in the near future, the Crane/S&S team will be working hard to fill back orders and meet future demand for Crane ignitions and motorcycle valvetrain components.”

Since the acquisition does not include the existing Crane facility at Fentress Boulevard, Daytona Beach, or any of the equipment there, manufacturing of valvetrain products will be moved to the S&S manufacturing facility in Viola, Wisconsin.

S&S CEO George Smith says that “the addition of this product line is a natural fit for our current in-house cam manufacturing capabilities as our equipment and processes are state-of-the-art. We’re also excited that the highly successful Crane motorcycle and automotive electronics line is included with this acquisition.

“This will further strengthen S&S Cycle in the electronics field by providing additional expertise to improve our product offerings in late model ignitions, among other things.”

S&S CYCLE
La Crosse, Wisconsin, USA

Keywords: warehouse industrial space lease purchase rent office Daytona Beach realtor realator commercial real estate Daytona Beach, FL, real estate, listings, business buying, commercial property selling, Realtor, land for sale, industrial property, real estate agent, broker, relocation, land, commercial, retail, warehouse, showroom, lease to own, property, use, properties, multiple listing service, mls, moving

by Bill Davis

General Contractor of Industrial Pre-Engineered Buildings

“Surviving the current economy – An Analysis of bank lending practices of 1979-1983 “

Investment Alert! Warning bells were going off and a sense of déjà vu when I received my second phone call from a commercial real estate investor having problems renewing his commercial loan.

The year was 1983 and the number of bank failures was rising steadily and commercial real estate demand was falling. I had a credit line with Mercantile Bank for $50,000 which was real money back then and I was suspicious that the bank was going to leave me in the middle of the night stealing all my valuables like a disgruntled redhead.

The fact that my loan was current was not in play——-

Today, Mercantile Bank is out of business and Billy Davis is still in business.

2009 once again

The fact that your loan is current is not in play———-

Apparently, some banks think that when an investor’s building is half empty the bank decides that the building owner should pay down the loan making the payment equal to the half empty rent.

The fact that your loan is current is not in play——–

Having no law degree, no business degree, and nothing but scar tissue and gristle on my buttocks, (kicked in the butt, bit on the butt, etc. for 70+ plus years), here is my recommendation; It is 3 phase. Like the electric we install in our Plain Jane buildings.

1) Thank the bank profusely for pointing out the fact that the building is half empty and you need to rent the other half. A business principle you may have overlooked.

2) Take all your lose change out of the bank, checking, savings, CD, your kids Christmas club. The bank can sweep your account causing your wife’s beauty shop check to bounce, which immediately violates a “sex rule”. This matter will come to your attention immediately. No good, really no good.

3) Tell the bank if they don’t like the loan, they should foreclose. Foreclosing on a current loan is good for the bank’s image?

See if your bank doesn’t meet “the standard” the bank examiner yells at the banker “BAD BANK, B-A-D B-A-N-K-E-R”. If the bank forecloses on a current loan, the examiner yells “BAD BANK, B-A-D B-A-N-K-E-R, then rubs the banker’s nose in the loan documents.

No banker wants his nose rubbed in the loan documents. Trust me on this.

According to federal statistics I have survived 11 recessions and 22 banks.

Bill Davis is an industrial develper in the greater St. Louis Missouri area – for more information, visit www.billdavisinc.com, or contact Mary Jo Everhardt at maryjo@billdavisinc.com

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by Tim Davis

Someone asked me today if I thought this was the bottom of the market. The tone in which he asked me reminded me of a story from my youth:

Once a regular customer of my father’s building supply store posed him the question, “Hey, what can you sell me here real cheap that I could take to the flea market on the weekend to sell and make some money on?”

I was no more than 10-12 years old, but I instantly realized the idiocracy of this question. And the same can be said for the question of “is this the bottom?” Who knows… I could spout back some answer loaded with industry lingo – cap rates absorbtion rates, vacancy rates, total inventory of product, blah, blah, blah. But took a new route, and told the person that I had no idea if this was the bottom of the market, and if I had some kind of superior empirical evidence that it was in fact the bottom, I would be selling off my baseball cards, stamp collection, beanie babies, and anything else that would raise two dollars so that I could buy the property myself.

But here is the reality:

• Material costs can only go so low
• People can only work so cheap.
• Material cost and labor are the major cost factors in new construction
• The cost of new construction dictates lease rates of new space
• Lease rates of new space dictates the lease rate of old space
• The value of commercial property is determined by how much revenue it can produce for its owners

So if material costs are at all time lows, and the supply of labor is increasing readily – following the above list of conditions should lead to a stabilization of commercial property values.

Now where are those baseball cards….
Keywords: warehouse industrial space lease purchase rent office Daytona Beach realtor realator commercial real estate Daytona Beach, FL, real estate, listings, business buying, commercial property selling, Realtor, land for sale, industrial property, real estate agent, broker, relocation, land, commercial, retail, warehouse, showroom, lease to own, property, use, properties, multiple listing service, mls, moving

By Tim Davis

The prolonged slump in the commercial real estate market is leading to some fantastic deals to be had on existing buildings with extended periods of vacancy. Several examples of buildings in the area that are now being offered at radically reduced base rents… (as much as a 50% reduction for the first year) and landlords are making increasingly more lucrative offers to prospective tenants with respect to Landlord funded Tenant Improvements. I have leased industrial space in the last 90 days at base rents that are 30-40% below rates we were asking just 12 months ago. One such deal saw an advertised rate of $7.20 triple net($9.20 gross) end up leasing for $5.85 gross for the first year, and $7 gross for the third and last year of the the 3 year lease term. That is a whopping 37% reduction at the front end of the lease, and 28% of the last year.

The important thing for landlords to remember in this market is that a tenant for 12months at $6, is the same as a tenant for 6 months at $12 per foot. Cash flow and occupancy in these times are king – and deals are being made. As for tenants seeking space, get aggressive, make offers…you may be suprised at how willing property owners and managers are willing to work with you.

Keywords: warehouse industrial space lease purchase rent office Daytona Beach realtor realator commercial real estate Daytona Beach, FL, real estate, listings, business buying, commercial property selling, Realtor, land for sale, industrial property, real estate agent, broker, relocation, land, commercial, retail, warehouse, showroom, lease to own, property, use, properties, multiple listing service, mls, moving

What Does Triple Net Lease Mean?

A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires… the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name. This type of lease can also be referred to as a “net-net-net lease” or a “hell or high water lease”.

For example, if a property owner leases out a building to a business using a triple net lease, the tenant will be responsible for paying the building’s property taxes, building insurance and the cost of any maintenance or repairs the building may require during the term of the lease. Because the tenant is covering these costs (which would otherwise be the responsibility of the property owner), the rent charged in the triple net lease is generally lower than the rent charged in a standard lease agreement.

Generally in the Daytona Beach area, we quote most office, industrial, and retail space at a triple net rate. For smaller spaces, and for shorter term leases, we will often simplifiy the rate to a gross rate, which is inclusive of all the expenses that are excepted in a triple net rate.

Keywords: warehouse industrial space lease purchase rent office Daytona Beach realtor realator commercial real estate Daytona Beach, FL, real estate, listings, business buying, commercial property selling, Realtor, land for sale, industrial property, real estate agent, broker, relocation, land, commercial, retail, warehouse, showroom, lease to own, property, use, properties, multiple listing service, mls, moving Tim Davis GG Galloway

This is great news for the Daytona Beach economic outlook, as well as the Fentress Ave Industrial neighborhood. What is the absorbtion rate of a 140,000+ SF manufacturing facility in Daytona Beach anyway?

warehouse industrial space lease purchase rent office Daytona Beach realtor realator commercial real estate Daytona Beach, FL, real estate, listings, business buying, commercial property selling, Realtor, land for sale, industrial property, real estate agent, broker, relocation, land, commercial, retail, warehouse, showroom, lease to own, property, use, properties, multiple listing service, mls, moving Tim Davis GG Galloway

Kosher on wheels, purveyor of Kosher foods and cooking products has expanded its operation. Kosher On Wheels has now added a location in the Port Orange Industrial Park. The 3,000 SF location will primarily be used to service accounts in the northeast central Florida area, from Jacksonville to Brevard county, and eastward toward the East Orland area. Tim Davis acted as the sole leasing agent for this transaction. For more information on Kosher on Wheels, visit them on the web at Kosher On Wheels

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Daytona Beach FL – Brambier’s Windows and Walls has added a new location in the greater Daytona Beach Area. They have finalized a lease of 4000 SF of industrial flex space in the Port Orange Industrial Park, located off of Samms Ave in Port Orange. Brambier’s has three locations, in North Miami Beach, Buford Georgia, and now a new larger location in the Daytona Beach Area. The lease was facilitated by Scott Harter of CBC Benchmark as the sole broker. For more information about space available in this complex, contact Scott Harter at sharter@cbcbenchmark.com. Find our more out Brambier’s at  www.brambiers.com.

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