Cap Rates are reaching Record Lows – Crash soon?

Posted by admin on June 3, 2015 under by Tim Davis, Good Info - Read It | Be the First to Comment

We have written a lot about current cap rates, the low(zero) interest rate environment, and how the commercial real estate sector will adjust once the interest rates move upward.  Below is a nice chart created by Wells Fargo, showing the 5 major property classes of CRE, on a chart with the current 10-year treasury yield. As you can see, the risk premium (or spread) between the CRE products and the treasuries are still wider than they have been for the last 20 years.

Simply put, CRE is still a greater return on investment than treasury bonds by the widest margin in 20 years.  There is room for interest rates to go up, and investors to still have substantial positive leverage on their investments at the current cap rates.

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Broker developed Content Marketing vs. Loopnet/Costar – Who Wins?

Posted by admin on January 29, 2013 under by Tim Davis, daytona beach commercial real estate, Daytona Commercial Real Estate, Good Info - Read It | Be the First to Comment

Chris Clark at CREOutsider had an interesting post today, “What is Loopnet?” It is a great read, and I wanted to share my commentary that I posted on his site:

Great post Chris. Your last paragraph, regarding “your own content marketing” – I have a site I developed in ’09 (when we had nothing else to do!) daytonawarehouse.com . The site is indexed well, and optimized for particular search terms, like “daytona warehouse for lease” While Loopnet owns the top 2-3 organic search returns, my site(s) consistently rank just under them. Read more of this article »

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Your Apple Stock dropped 12.5% yesterday. Buy Commercial Real Estate!

Posted by admin on January 25, 2013 under by Tim Davis, daytona beach commercial real estate, Daytona Commercial Real Estate, Good Info - Read It | Be the First to Comment

Quite entertaining to read all the pundits commentary last night about why Apple stock dropped over 12 points yesterday, how an obvious profit taking measure on the news of missing their profit target by about 4%, becomes an Android vs. iOS argument.

The one thing that I kept thinking about is how my client’s investment property still has the rent checks hitting their mailboxes in 6 days. Yesterday I recieved a brief white paper written by Anika Kahn, Senior Economist with Wells Fargo. The paper is titled “Is Commercial Real Estate Still an Inflation Hedge?” An excerpt: Read more of this article »

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Properly Underwritten Cap Rate Calculations for Commercial Real Estate. It is not a pro-forma folks.

Posted by admin on November 13, 2012 under by Tim Davis, Commercial Real Estate Definitions, daytona beach commercial real estate, Good Info - Read It | Be the First to Comment

I was having dinner with some friends the other night, and in the group was a fellow real estate professional. He primarily sells residential, but does a bit of commercial work from time to time. He was telling me about a commercial property he has for sale, and commented “it should really sell, it is XX cap” Instantly my mind starting racing, well, sure it is a XX cap rate, but with what financial underwriting standards?

I’ve seen countless sellers over the years haul me into their office, wanting to list property for $XXXX dollars, which by their calculations is a 9% cap rate. They have a gross revenue number of all the rents collected, and on the expense side, property taxes, property insurance, and some common area Read more of this article »

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The User Experience, with Commercial real estate

Posted by admin on October 26, 2012 under by Tim Davis, Good Info - Read It | Be the First to Comment

I read the below article this morning over coffee, and I had several of those “yeah! that is what I am always saying!” moments as the author spoke of how the User Experience with the new windows 8 is getting hacked up by the device manufacturers that acutally make the products to run the software. No one is coming close to providing the end-to-end user experience that Apple is still providing its users.

We are neck-deep in a deal right now, a multifamily building transaction that has a lot of moving parts, many parties in the deal(and even more trying to get into the deal), and I was thinking about how we could improve and streamline the user experience for both our buyer, and our seller in this transaction. We have a cloud-based file sharing platform so everyone has access to the documents relative to the deal, we have virtual deal room set up so that all parties can see what is going on at any given moment, who is working on what, when the expect to be done, what the next steps are, and basically who/what is holding up the deal. But what else could we do?

You do not have to always use  technology in this industry to improve the user experience; people want timely responses to requests, and they want to know what is going on with their transaction! After all they are paying us a fair amount of money for our services. I spoke with a property owner about listing property as well today, and you could tell in the tone of his voice that he had some disdain for our profession. He likely has had negative experiences with an agent(residential maybe) who signed a listing agreement, put up a sign, dumped it in the MLS and never called them back until they had an offer from some other agent for 20% less than list.

I will meet him next week, and hopefully demonstrate how much better his user experience can be with our product.

Tim Davis
386-566-4917

5 Ways Hardware Makers Are Hurting Windows 8 | Co.Design: business + innovation + design.

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My new Paperless Office

Posted by admin on October 18, 2012 under by Tim Davis, Good Info - Read It, Jokers... | Read the First Comment

Multiple Monitors

A couple of weeks ago I read Bo Barron’s piece on going Paperless, and I thought to myself, “self, you are pretty close to that already”. I have a huge 27″ monitor, I “print to PDF” and save contracts and documents on my Google Drive, access them on my phone and tablet on the go, transfer them to Dropbox for sharing, etc. etc. But there are a few files laying about here and there. I took an hour or so per day over the last couple of weeks, scanned all my current working deal files, purchased a second 27″ monitor to be my “desk with papers on it” and since Monday of this week, there is only a stack of post it notes sitting on my desk. We shall see how this goes.

TD

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Traits of Successful Real Estate Investors

Posted by admin on October 8, 2012 under by Tim Davis, Good Info - Read It | Be the First to Comment

I was reading the below article earlier this morning, and so much of it rings true I thought I would share. With all of the deals I’ve done in the last couple of years, I have a lot of experiences with buyers to draw upon.

The overwhelming commonality in all of these people is that they know their business, and know it cold. They invest in property types and classes that they have experience with, and are good at managing. We don’t see a hosptitality buyer change ships in mid stream and go after a 55&up mobile home park. The rare exception to that rule is of course when an asset is in extreme distress. But then again, the savvy investor doesn’t buy the junk that ends up in REO, they are doing note purchases, loan to own deals, etc. And if you are going to maximize your margins, you had better know the market area and the business of owning that particular property type.

Tim Davis
386-566-4917

Traits of Successful Real Estate Investors.

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Economists Say Housing Recovery is finally here!

Posted by admin on October 5, 2012 under by Tim Davis, Good Info - Read It | Be the First to Comment

Well it is about time. Cue the band, and open the champagne!

Economists: Housing recovery finally here – Oct. 2, 2012.

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What is so special about your marketing plan?

Posted by admin on October 4, 2012 under by Tim Davis, Good Info - Read It | Be the First to Comment

I was recently asked this by a person looking to sell their property, shortly after I told them that my team’s marketing platform was superior to any other in this market. My answer as always is data and market knowledge.

If you want to be sucessful in business, you need to know everything about your business, your product, and your customer. When I was in the automotive parts manufacturing industry, when I had a potential customer call me about our product line, I could smoothly explain all the features of the product, and answer their questions. Speaking from experience and knowledge.

And that is why our marketing plan is better. We have a detailed database of all the properties in our market, and we are regularly in contact With property owners.

After all, that is exactly how we got to meet you here today, and set this very appointment – and you are asking me why our marketing plan is better?

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Is the Shopping Mall Dead?

Posted by admin on under by Tim Davis, Good Info - Read It | Be the First to Comment

I’ve been thinking for some time now about shopping malls, and how obsolete they have become to our current buying habits. Has anyone seen deadmalls.com?

Last week WalMart announced they would not be carrying the Kindle HD. Or any kindle for that matter. They cited that they had simply become a “showroom” for Amazon, and people ended up just buying the tablet from Amazon direct, with all the incentives and free book offers that come with it. Amazon is willing to sacrifice Kindle margins to sell more books and periodicals. Speaking of Amazon, they have a nifty app for the phones, that allows you to scan a bar code, and purchase the item on Amazon. Yesterday I needed wiper blades for my car, and while standing 5 deep in a line that was going no where, I scanned the bar codes on the packages, Amazon had them for about $10 cheaper for 2, with 2 day shipping. I did the “purchase with one click”, hung my items back on the rack and went back to the office.

Thoughts?

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