Opis is an excellent resource we use to track fuel margins for gas station appraisals. Tom Kloza knows what he is talking about. His latest post is here:
http://blogs.opisnet.com/archive/2008/06/12/how-the-pinch-may-steal-summer.aspx
Posted by: Richard
I attended the above function yesterday in Santa Monica. The agenda was: Economic Outlook
“Slower Growth Ahead, but How Slow?”
Abby Marks
Economist, Torto Wheaton Research
Abby says that we are info slow growth retail sales growth over the next year or so, but not negative. Excluding energy and food, inflation is not that bad.
CBRE Retail Services
Overview & Perspective
Anthony Buono
Executive Managing Director, CBRE
CBRE has more retail brokers than any other firm. He also mentioned that times are really tough right now, especially for investment sales.
Occupier & Developer Panel
Moderator: Richard Rizika
Executive Vice President, CBRE
Panelists: Gary Safady, O&S Holdings
Paul Moulton, Costco
John Klein, Equinox
Steve Horowitz, Citi Trends
Jeff Forman, La Curacao
In general, all of these tenants are expanding.
Capital Markets Panel
Moderator: Phil Voorhees
Senior Vice President, CBRE
Panelists: Joe Dykstra, Westwood Financial
Simon Honeybone, Sarofim Realty
Bruce Francis, CBRE/Capital Markets
Tom McDonough, Equity One
Paul Mittman, PASSCO Companies, LLC
Cap rates are up 25-50 bp according to the panel. Debt financing has been the biggest problem aside from unrealistic seller expectations that values have not gone down.
Keynote
Ron Pompei
Principal of Pompei A.D.
These guys are partnered with Archon and CBRE to develop new generation retail that incorporates community, etc. Check here for more info: http://www.pompeiad.com/ They are looking for sites in San Diego, Los Angeles, and SF.
From CBRE Capital Markets eNews: In a new report, Fitch Ratings said a 15 percent drop in property values would do relatively little to adversely impact the credit ratings of older vintage U.S. CMBS, including tranches deemed impaired. The report tested fixed-rate loans maturing through 2012, and Fitch concluded that the older CMBS vintages were “well-insulated” from a 15 percent drop in property value.
Investors.com reported that rising consumer prices, better-thanexpected economic data, and inflation warnings by Federal Reserve Chairman Ben Bernanke have raised expectations that the central bank will hike interest rates this year. Futures traders have priced in a quarter-point rise to 2.25% by October. That follows several hawkish speeches by Bernanke, including a June 12 vow to "strongly resist" mounting inflation pressures. But many economists say that inflation remains tame despite soaring energy and food prices. They say it would be premature to raise rates while the economy remains weak and credit is still tight.
According to the MBA, commercial real estate investors—inside and outside the United States—could find pockets of opportunities in commercial real estate despite the continuation of re-pricing risk. Foreign banks and other lending institutions have increased their interest in the U.S. market. This is also opening opportunities for U.S. real estate investors that are finding debt too difficult to obtain at home. This is particularly relevant for large transactions of more than $50 million, which have become difficult to place amid the debt correction as that segment of the market was dominated by CMBS.
Oil remains the wild-card in the deck that could determine the length and breadth of the current economic slump. Record oil prices are now in full effect as prices at the pump are above $4 per gallon in most areas. Although oil prices retreated earlier this week, talk of a $150 target for a barrel of West Texas Intermediate has touched off a speculative rally pushing the price to $138, reported Commercial Real Estate Direct.
Posted by: Richard
I'm headed to the Symposium in Los Angeles today. Abby Marks from Torto Wheaton will address the group with respect to current market conditions. After a few panels on capital markets and occupier/developer, Ron Pompei will give the keynote. I'll post any interesting developments.
Posted by: Richard
Tim Haves in my office put this together recently:
Despite an overall down turn in the economy transactions within the Petroleum Sector have remained buoyant. If we exclude the large portfolio purchase of USA Petroleum by Tesoro there have been 42 transactions in the last 18 months in Orange County.
The major station sellers are of no surprise, Conoco Phillips sold 12 , Shell Oil 7, BP 2 and Chevron 1, which accounts for over 50% of the market.
We can expect more sales from these corporations over the rest of the year as they continue to divest their retail marketing assets.
Average sales price of $1.8m or $80 per square foot seems low but this reflects many land and improvement sales by the larger corporations to their dealers.
Most significant single sale was the Chevron on Nutwood in Fullerton which was purchased by Cyclone Energy last September for $6.5m
Most prolific buyer was G&M who added 6 more 76 stations to their impressive portfolio.
Finally a warm Orange County welcome to Terrible Herbst Inc the famous gas station and casino owner from Las Vegas. Jerry Herbst purchased the landmark Chevron on Jamboree in Newport Beach from Chevron USA Inc at an undisclosed figure back in April 07.
Here's his contact info:
Timothy.K.Haves
First Vice President
CB Richard Ellis
3501 Jamboree Road
Newport Beach CA 92660
Tel 949-725-8598
Posted by: Richard
According to Commercial Real Estate Direct, the whole-loan sales market is awash in offerings as lenders make what appear to be gargantuan efforts to dispose of unwanted or nonperforming loans. More than $5 billion of loans - performing and nonperforming - are in various stages of being marketed on behalf of a host of sellers, from Wall Street conduit-lending shops to insurance companies and finance companies. The loans are being offered while investors have been gearing up for just the right opportunities to buy. But many offerings have and will face challenges selling, largely because sellers and prospective buyers might not be seeing eye-to-eye when it comes to valuations. That's where loan-sales advisers come in. They're instrumental in managing sellers' expectations on price.
The MBA reports, the economy grew at an annualized pace of 0.9 percent in the first quarter -- slightly stronger than initially reported -- following a 0.6 percent increase in the previous quarter. Trade was the biggest boost to growth, while domestic demand -- gross domestic product (GDP) excluding net exports and inventory changes -- declined for the first time since the fourth quarter of 1991. The upward revisions also changed the mix of the components of GDP, improving the outlook for second quarter growth. In addition, a separate report of a strong increase in May durable goods orders, excluding transportation equipment, also bodes well for future business investment.
The volume of delinquent CMBS loans increased for the fifth straight month in April to approximately $4 billion from $3.75 billion in March, according to Realpoint. And because the universe of CMBS loans shrunk, to $867.2 billion from $872.2 billion, the delinquency rate climbed by three basis points to 0.46 percent from 0.43 percent. For all of last year, the universe of CMBS had been growing rapidly, so even if the volume of delinquent loans might have increased from one month to the other, the overall rate either fell or remained relatively unchanged.
