Investing in Commercial Real Estate

Broad socioeconomic trends, national and global, are having, and will continue to have, significant impacts on U.S. real estate. These impacts are visible everywhere, including right here in Santa Barbara.

Most Santa Barbara business owners and entrepreneurs have asked themselves whether they should (or could) buy the real estate used for their business. There are valid reasons to do each: renting may be the better solution if you are just starting out, or you need or prefer the flexibility allowed by leasing or you lack the cash down payment or credit required to purchase. But if you have a successful small business, have some investable cash and can envision stability in the mid-to-long term, then you owe it to yourself to complete this analysis.

The U.S. economic news and commercial real estate news is, generally, rosy…even when the world political and economic news is not.

As the year gets underway, the investment world is increasingly anxious about various global risks. The economies in the European Union remain challenged, and despite the European Central Bank’s commitment to quantitative easing, the fear is that stagnation is becoming ingrained throughout Europe and that Greece may leave the Union altogether.

Within the recently released President’s 2015 budget is a proposal to limit gain deferral for real estate to $1 million per taxpayer per year.

The question of whether we are in a multifamily bubble is one that has recently been on the minds of many real estate investors

The Federation of Exchange Accommodators (“FEA”) is the industry association for professional exchange facilitators, also known as Qualified Intermediaries (“QI”).

All too often a business searching for commercial space places a person in charge of the initial search who has:
limited or no experience with real estate
limited or no understanding of the business’s real estate requirements
no authority to act on behalf of the organization.

The latest data also underscore how incremental improvements in labor conditions have failed to undo the damage from the recession and the prolonged slow recovery. For example, the share of adults in the labor force is no longer declining, as it did in 2013, but it remains at levels last seen in 1978.

Capitalization rates, or cap rates for short, are generally defined as the upcoming year’s scheduled income divided by the price of the property. However, if we look into the derivation of the cap rate, we learn quite a bit more about this misunderstood metric.