The Pope is sitting in his office. Knock at the door. Come in. A man walks up to the Pope and introduces himself. “My name is Frank Perdue. I’d like to donate $1 million anonymously.” The Pope thanks him. “However, it’s conditional on changing one word in the Lord’s Prayer. I’d like you to change...Give us this day our daily bread, to give us this day our daily chicken.” The Pope can’t believe what he’s hearing and explains that these are God’s words. They can’t be changed.
As someone who has worked with the golf industry for the past 25 years I have seen my share of appraisal reports prepared by general certified appraisers with limited experience. I have found them to be almost universally subpar, no pun intended. Golf course appraisal is more difficult than most people realize, because it accounts for appraisal theory not found with office, retail, industrial or apartments. This article touches on the nuances we encounter daily when working on this specific property type and the mistakes made by those lacking experience.
The strong office market throughout Greater Portland continued in 2018 as vacancy rates fell for the ninth consecutive year. A survey of 347 Class A and Class B office buildings, totaling just over 12.4 million s/f, in seven submarkets, found that the total vacancy rate, including sublease space, fell to 4.18%, down from 4.4% in 2017 and the lowest rate since 2000. Four out of the seven submarkets had a drop in vacancy with the remaining three showing little increase. Several large transactions shaped the majority of the movement in most submarkets, and the popularity of downtown Portland continues.
For the third year in a row I have the opportunity to consider the New Year’s forecast for the hospitality industry here in New England. In preparing for writing this article I reviewed my last two years and my expectations for the year ahead for both years were consistent and in line with my thinking. We were all watching our economy grow, stock market hitting record highs and hotel revenues benefitting by it. Well operated hotels throughout New England enjoyed very good years in 2017 and 2018.
Many of us don’t think about what will or won’t be covered by insurance until it’s too late. Whether due to unexpected catastrophic storms or less dramatic, relatively expected issues and incidents, buildings are susceptible to damages both inside and out. Those in the real estate business – buyers, sellers, managers and developers – can mitigate losses with some common-sense tactics and basic preparation. Preparing your property and your policies for the worst is the best way to face any storm.
New Hampshire’s Seacoast commercial real estate market experienced very high demand with low inventory and continued increases in construction costs in 2018. The vacancy rate remains low in both the office and industrial markets with the industrial market falling to 5.5%. Lack of inventory coupled with rising construction prices have forced businesses and investors to either pay premium sale and lease rates or get creative about their space, hold tight for a dip in the market, or in worst cases be forced to consider properties outside of the Seacoast.
In the year ahead, we are likely to see continued compression in project delivery schedules, spurring developers and designers to hunt for new ways to streamline the design and permitting process. Meanwhile, the regulatory maze is becoming increasingly difficult and constantly changing. As a result, the permitting process often represents the major obstacle to project delivery dates, even for relatively simple projects.
Despite all the powerful new technologies available to today’s design professionals, “working faster” can only accomplish so much. At every scale, environmental regulation has grown more complex. To be
2018 closed out as a very strong year for commercial real estate developers and investors partially fueled by continued low interest rates and ever-present demand. We enter 2019 amidst government tensions and political infighting with seemingly impending rising interest rates. That’s the bad news. The good news is that New England has an unprecedented demand for most asset classes including industrial properties and flex properties, especially inside of I-495. Multifamily demand hasn’t subsided even though some may believe that time may be needed to absorb some of the new units that came online recently. Even with the
2018 proved to be a refreshing year in terms of new companies entering the New Hampshire market and the continued trend of existing businesses and entities expanding their footprints. Will 2019 continue these positive trends? The media is fixated on what the Fed has planned, the “China trade talks,” etc. and what impact that will have on the economy. The significant drop in most of the global stock markets has many economists suggesting that a recession is on the horizon. From our perspective, the state’s commercial real estate market will remain strong in 2019. The challenges will likely be more “supply – demand”
As start-up and operational costs in the hospitality industry increase, food halls and “micro-tenant” aggregation continue to gain popularity in New England’s urban commercial real estate markets. From Boston Public Market to the recently introduced High St. Place (Boston Financial District), Lisbon’s Time Out Market (Fenway’s Landmark Center), or Bow Market (Union Sq. in Somerville), real estate developers are banking on vast multi-operator ventures to drive business and hedge risk among various operators. New England is likely to see this concept flourish in 2019 with several such developments currently underway.
