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Where Will the Jobs Come From? | Grubb & Ellis | Wausau Wisconsin

filed under: Commercial Real Estate Market posted on May 21st, 2010

Where Will the Jobs Come From?

Many people I speak with are skeptical that the labor market recovery is real and sustainable. It’s true that the 573,000 net new payroll jobs created year-to-date is merely a down payment on the 8.4 million jobs lost in 2008 and 2009, but the trend is moving in the right direction. A particularly hopeful sign is that new business creation surged to a 14-year high in 2009. “Challenging economic times can serve as a motivational boost to individuals who have been laid-off to become their own employers and future job creators,” according to the Kauffman Foundation, the study’s author. Entrepreneurship is strongest in the West and South. Click here to view a summary of the study, and click here to listen to a story from American Public Media’s “Marketplace” radio show.

What kinds of jobs are being created? Moody’s Economy.com reports that the following sectors will see the biggest percentage gains in jobs added this year:

Medical Services
Industrial Services
Computer Software & Services
Restaurants
Biotechnology
Environmental Services
Retail Stores – General
Banking
Medical Supplies
Retail Stores – Specialty Lines

The American free enterprise system is working as advertised.

Have a great weekend.

Source: Robert Bach, SVP, Chief Economist , Grubb & Ellis , 312.698.6754

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For your Commercial and Investment Real Estate needs hire the professionals. Grubb & Ellis | Pfefferle is the ONLY National Commercial Real Estate Broker in North Cenrtal Wisconsin. Independently Owned and Operated

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Financing for Commercial Real Estate is Starting to Thaw | Grubb & Ellis | Wausau, Wisconsin

filed under: Commercial Real Estate Market posted on April 23rd, 2010

Financing for Commercial Real Estate is Starting to Thaw: The following is a blog post I received today from Good News Friday Grubb & Ellis Corp. Office.

“Equity investment capital targeted for commercial real estate has been sitting on the sidelines for well over a year. A number I heard at last week’s Urban Land Institute conference was $150 billion, which could be leveraged higher if only leverage were available. Now it appears that debt is coming back according to an article posted this week on LoopNet (click here). Traditional lenders are offering better terms while new players are entering the market. According to the article, “While trophy properties in major markets are seeing most of the increased lender interest, assets in secondary markets are also attracting stronger interest.

This graph from Real Capital Analytics seems to support that view. Cap rates have already turned lower in primary markets and seem poised to turn lower in secondary and tertiary markets. This trend is based on low deal volume, but volume is starting to rebound, up 25 percent in the first quarter compared with the very low base in the first quarter of 2009.

It’s hard to believe because the market seemed frozen as recently as six months ago, but buyers, sellers and lenders, while not all on the same page yet, seem to be moving in that direction.”

Source: Robert Bach , SVP, Chief Economist , Grubb & Ellis , 312.698.6754

This was written reflecting the national market. One has to remember each market is different and changes at it’s own pace due to local influences. Our own market in northern and central Wisconsin is still reflecting a Cap Rate of 9.5 % – 10.5%.

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Cap Rate a Method to Determine the Value of Investment Properties

filed under: Commercial Real Estate Market, Real Estate Investment Strategies posted on April 23rd, 2010

Cap Rate a Method to Determine the Value of Investment Properties. Many investors and appraisers use a Cap Rate (Capitalization Rate) to determine the value of investment property.

The Cap Rate is calucaled by determining the ration between the purchase price (Value) and the Net Operating Income (NOI) of the property. The formula being: Cap Rate = NOI / Value or R=I/V. Likewise, the Value or purcahse price of the property can be determined by using this formula as well. Value = NOI / Cap Rate or V=I/R.

The benifit to using Cap Rate as a measurement of the value of property is that it is easily calculated and accounts for the operating expenses of the property. It can also allow the buyer – investor to compare and indentify with comparable transations and data sources with the market. However, once an investment property is found or pirks the interest of a buyer by it’s Cap Rate, they should to further calculate the return on investment as well. This is known as Return on Cash or Cash-on-Cash. I will discuss this in a future blog.

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