The Market is for Sale ... at Great Prices

The commercial real estate industry is looking at some of the worst times ahead of itself. The market trends show downward pressure on prices and an increase in the capitalization rate. This is just one element of the positive movement in the industry for potential investors.nnWith prices declining, a golden opportunity has blossomed for investors to purchase commercial property. Interest rates are low but financing can be tough to attain. With the right mixture of tenants and money to invest, properties are trading at before boom prices.nnThe commercial market on average lags behind the residential market by 12 to 18 months. The drop-off in commercial property is going to become much harder with payments on current owners loans. Balloon payments and notes coming due are putting pressure on owners to sell their buildings. Some owners have lost the so much equity in the building that foreclosing on the building is the owner's only option. Banks do not want the property on their records. This is just another piece of evidence that gives future investors a prime opportunity to increase their wealth.nnThe most up to date information on the market shows that prices declined 10.6% in the 4th quarter of 2008 industry wide. Expected decline in price is between 10-15% for 2009 with a turnaround in prices in 2010. Much of the decline is linked to the REO (Real Estate Owned) properties and ASC (Short Sale) buildings being offered and sold by the bank.nnThe REO and ASC process can be a long arduous process. The price that a building can be acquired may make it worth the wait. The prices that REO sales are coming to the market are starting to be offered below the boom of real estate prices. These distressed assets can be picked up by an investor or team of investors and create a great return monthly. Those assets will appreciate over the standard 7 to 10 year hold time and produce wonderful results. A commercial agent with relationships with banks can find the right REO sales in your area.nnThe correct REO purchase is not always the first or only one you may see. The building needs to be in good shape with good tenants that will pay their leases. A common misconception is that an REO building will have no tenants similar to an REO in a residential sale. REO buildings in the commercial market most often are tenant laden with the arrival of cash flow immediately.nnThere is growing sediment against the commercial real estate market. With big brand names such as Mervyn's closing stores, Starbucks, and other big names exiting the retail market. These exits are part of the dynamic time to buy today. Starbucks has corporate guarantees on the leases they hold. Those building owners are going to be ok. The key for investors is to find buildings that are ready to be occupied or have current tenants in them.nnThe key for investors is now to pay attention to the market and obtain the most information possible. Find an agent to work with and explore the options they have in the market such as this. Take the commercial advisors information and find a building that meets your criteria, not the agents.nnInformation provided from Center from Real Estate InformationnnVisit www.commercialforeclosureinvestment.com for more details.