Neil Victor

A Year of Fits and Starts for Commercial Real Estate

During a year of extraordinary economic and political uncertainties, commercial real estate held its position as a crucial safe haven for investors in 2011. Investment into the sector reached a peak in the second quarter, supported by CMBS conduit originators and more active life company and bank lenders. Even as economic and employment trends fell short, leasing activity for well-positioned assets strengthened. During this period, investment into segments of the market that had lagged during 2010, including commercial properties in secondary and tertiary markets and value-add opportunities, showed signs of firming, as well.

In spite of the rising momentum, commercial real estate investors revealed they were not entirely immune to the obstacles facing the wider recovery in business confidence. As I suggested in my New Year’s message one year ago, this has been a period of fits and starts. Over the summer, renewed disruptions of capital and credit that were largely unrelated to the property sector threw the conduit into disarray and slowed the pace of transaction activity more broadly. For many borrowers, lending sources pulled back once again, with the result that a larger share of pending sales has struggled to reach closing.

While sales volume in the third and fourth quarters will not match the spring’s flurry of trades, the shifts in the market must be understood in the context of a turbulent economic and political environment. Where investors have retrenched, it is often under the force of external pressures. It nonetheless remains clear from the current diversity of investors and lenders that commercial real estate is high on the investment hierarchy. In fact, many of the last twelve months’ most notable and most visible deals only came to fruition as the year drew to a close. The fundraising activities of the major REITs support this assessment, as well. US REITs raised $37.5 billion in equity in 2011, a new record that easily surpasses the previous high of $32.7 billion set in 1997. They raised another $13.8 billion in unsecured debt.

Sperry Van Ness International, an Irvine-based commercial real estate firm, has completed several investments in new technology. Some of these include improvements to its online tracking system (OTS) and the integration of consumer relationship management (CRM) and social media applications.

“[We have] embraced cloud computing for the past decade,” said Kevin Maggiacomo, chief executive officer and president of Sperry Van Ness. “We pioneered OTS, our single-point-of-entry tracking system, years before the technology caught on within the industry. Today … we continue to invest in new technology to enhance its value for our advisors and clients.

The Sperry Van Ness office in Huntsville, AL Broker: Ava Terry Uses the latest technology furnished by Sperry Van Ness Corporate.