Rhonda Garland, a founder and managing principal of Boise-based commercial real estate service and advisory firm Investment Analytics Group (IAG), was awarded the Certified Commercial Investment Member (CCIM) designation by the CCIM Institute, one of the leading commercial real estate associations in the world. The designation was awarded in late August following examinations held in Chicago.

Ms. Garland was among the 199 commercial real estate professionals from across the nation who earned the designation by passing the Institute’s Comprehensive Examination, the final component in the designation process. More than 15,000 commercial real estate professionals from the United States, Canada, Mexico, Asia and Europe have earned the CCIM designation since the program was founded in 1969.

The CCIM designation is awarded to commercial real estate professionals upon successful completion of a graduate-level education curriculum and presentation of a portfolio of qualifying industry experience. The curriculum addresses: financial analysis, market analysis, user decision analysis and investment analysis – the cornerstones of commercial investment real estate. CCIMs are recognized experts in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis.

CCIMs have access to unparalleled level of valuable online tools, including the Site To Do Business, a suite of mapping, demographic and other analytical resources. And, all CCIMs can market properties for sale or lease through CCIMNet, a leading national commercial property exchange.

The CCIM business network encompasses 1,000 markets throughout North America, Asia, Europe and the Caribbean. Of the estimated 125,000 commercial real estate practitioners in North America, more than 9,000 currently hold the CCIM designation. CCIM Designees include professionals who work in brokerage, investment and development, the corporate environment, property management, appraisal and related segments of commercial real estate. An additional 8,000 professionals are pursuing the designation as Institute candidates.

The CCIM Institute is a leading commercial real estate association that confers the Certified Commercial Investment Member (CCIM) designation through an extensive curriculum of 200 classroom hours, in addition to industry experience. An affiliate of the National Association of Realtors®, CCIM Institute is the largest brokerage network in the world. Headquartered in Chicago, CCIM Institute has a growing international membership of 1,000 professionals in more than 30 nations overseas. Visit www.ccim.com or call 312-321-4460.

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At Investment Analytics Group (IAG), we understand that some REO (real estate owned) departments are overworked and understaffed. We understand the sense of urgency to move toward disposition. However, we also recognize that proper asset management preserves equity.

There are inherent REO complexities which include the risk exposure of non-performing assets and the potential high costs associated with holding REO properties. More importantly, at IAG we understand how all of this impacts operations and the financial picture – market-to-market and property-to-property. Our focus is to help you craft a strategic action plan that meets your time requirements, which could result in minimized losses and a quicker sale when the asset has been positioned appropriately. Options to examine include repositioning strategies, capital improvements, lease-up activities, improving operational efficiencies, refinancing debt, or best positioning the asset for optimal sale in a down market. IAG will use its experience and understand of market variables to recognize and derive a property’s potential.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Investment Analytics Group’s (IAG) professional and experienced staff is devoted to the needs of high-net-worth and sophisticated investors and buyers seeking real property as their target investment. I know a pitch or a line you have probably heard from numerous companies, but what sets IAG apart from others is the dedication to establishing long-term relationships with clients, servicing a diversity of real property categories, and managing an asset transaction from start to finish with superior experience. Our number one goal is to build trust with every one of our clients first, and leverage that trust to grow those long-term relationships and deliver tangible results.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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1. What is my time horizon for this investment?
An investor time horizon relates to the duration the investor plans on holding an investment property. Some investors prefer short horizons or “flipping” while others may choose to hold a property for up to 30 years. Typically time horizons are classified into three categories:
— Short = 1 to 2 years
— Medium = 3 to 5 years
— Long = 10 to 30 years
Your time horizon is very important and effects many factors including: mortgage options, interest rates, tax rates and exit strategy, just to name a few, and thus should be determined prior to investing.

2. How active do I plan on being in my investment?
The time and effort you are willing to devote to your commercial real estate investments can greatly affect the types of properties you should evaluate for acquisition. Multi tenant buildings including office properties, retail centers and multi family properties can take a considerable amount of time to manage and lease. If you prefer to spend less time on your investments consider single tenant properties and properties that are leased “triple net”. These properties leave most of the responsibilities of ownership to the tenant and free you up for other obligations.

3. How much equity do I have available for investment purposes?
Prior to investing you should determine how much equity you have for this investment and future investments. The amount of equity will effect:
— Your loan amount
— Loan-to-value ratio
— Your interest rate
— Your loan fees
— If you need to view only those properties with owner financing available
— Your ability to purchase multiple properties and diversify risk
— The price of properties you should evaluate for potential purchase

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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An interesting article in CIRE (Commercial Investment Real Estate) magazine discusses the landscape for brokers trying to close deals that we wanted to share.

The credit crunch has reduced office transaction volume to a trickle and factors weighing on the sector are likely to limit deal making through year-end. Asset values have declined nearly 30 percent from their peak, financing is scarce, and downward pressure on office fundamentals is exacerbating the wide gap between bids and asking prices.

It’s a difficult landscape for investment brokers and their clients to navigate, whether they are office buyers, sellers, or developers. In the first four months of this year, property owners put nearly $13 billion of office properties up for sale but only closed $4.4 billion in transactions, according to Real Capital Analytics. Nationwide, sales volume is down 70 percent from year-ago totals.

Perhaps more critical is a dearth of acquisition financing that hampers deals even where buyers and sellers reach a middle ground on price. Conduit providers have ceased to issue new loans due to a logjam of commercial mortgage-backed securities, and life insurers largely have reached the limits of their real estate lending allocations.

Yet today’s market provides opportunities for CCIMs to apply experience, training, and creative thinking to make deals work, says Stan Watson, CCIM, owner of Watson Real Estate in Ann Arbor, Mich. “You can pick lemons off a tree but you have to dig for diamonds, and right now that’s what we have to do,” Watson says. “We have to work a little harder. We have to be extremely creative.”

Just last year, Watson helped a client obtain $5 million in financing to develop a single-tenant office project on St. Joseph Mercy Hospital campus in Ann Arbor. Local lenders expressed interest in the deal but balked at the requested loan amount, so Watson pooled resources from five local credit unions to assemble the necessary sum. The tenant moved into the completed building earlier this year.

“You need to develop relationships and seek out those lenders that are really lending money, such as state-chartered banks, credit unions, or others you maybe haven’t considered before,” Watson says. “I never thought I’d be pooling credit unions, but in a market like this you start thinking what else can I do?”

Done Deals
What enables some deals to close while others founder? Details vary, but brokers say success comes from persistence and having the courage to take unconventional approaches to problems that otherwise would derail transactions.

Brian Andrus, CCIM, owner of Stonebridge Real Estate Co. in Clearwater, Fla., recently sold two office properties, and both required extra effort. In the first case, an office user was attempting to purchase a former automotive service station that had been converted for office use. The buyer lined up acquisition financing from a regional bank offering 85 percent loan to value to owner-occupants.

But before the new investor could close, the bank halted the deal, demanding documentation that the property had been cleared of underground fuel storage. After an exhaustive search, an environmental assessment firm working with the seller tracked down proof that the tank in fact had been removed years before, and the deal closed.

In another recent example, Andrus marketed an office project that required him to spend 40 hours reworking an existing lease to suit a prospective buyer. “Every deal is taking more care and more time,” he says.

Getting Up to Speed
When the credit crunch began, the highly leveraged buyers that fueled bidding wars in 2006 and 2007 effectively were excluded from the market. The few remaining active buyers demand lower pricing to reflect their higher cost of capital, which includes substantial equity and comes with an aversion to risk that must be placated with greater returns.

Throughout most of 2008, buyers and sellers simply disagreed on prices and trading slowed to a crawl while the market worked out corrected pricing based on existing income streams. Commercial real estate values have wilted in that time, particularly those predicated on income growth projections that did not come to fruition. The Moody’s/REAL Commercial Property Price Index showed office asset values in April 2009 were down 29 percent from one year earlier. Real estate investment trust share prices, which are considered a forward indicator, suggest commercial real estate values will decline 40 percent from peak to trough before the market hits bottom.

After more than a year of job losses and economic contraction, declining office fundamentals threaten to eat away asset values. Whether due to companies negotiating lower rates on lease renewals or tenants going out of business and defaulting on lease obligations, many property cash flows have faltered and further reduced the value of investors’ holdings.

“The office vacancy rate is now a little over 16 percent, and over the next six months it will creep into the high teens and maybe crest at 20 percent by the middle of 2010,” says Ben Breslau, Jones Lang LaSalle’s Americas research director. “Then it becomes a matter of when the economy picks up. If the economic recovery takes hold this year, we might see vacancy rates stabilize by the end of 2010.”

As a result of rising vacancy and softening demand, rental rates are flagging and will drop 8.1 percent on average over the course of 2009, the largest one-year decline on record, according to New York-based researcher Reis. Negative absorption this year will range near 70 million square feet, shy of the 100 million sf of negative absorption Reis tracked in 2001, but enough to make 2009 a painful year for the office market.

Buyers Want Bargains
For owners trying to unload distressed assets, speed is critical, says Brian E. Estes, CCIM, president of Prudential Commercial Real Estate in Jackson, Miss. That’s because the property usually is costing the owner money. Setting a price to meet the market also can be a challenge, because a distressed asset often lacks part or all of its income stream. Without income to use in extrapolating value, capitalization rates become irrelevant, so a buyer is more likely to consider a distressed property’s price relative to construction or replacement cost, Estes says.

Earlier this year, Estes helped a bank sell an 115,000-sf office complex after a foreclosure. He found an all-cash buyer who bought the complex, made improvements, and brought in new tenants. In a separate deal, Estes helped a client sell a struggling retail property that had lingered on the market for more than two years, finally moving the asset at a price equivalent to 40 cents on the dollar. “We knew no one would get financing to buy this shopping center, so the first all-cash offer we got, we took.”

Investors waiting to buy at rock bottom prices aren’t waiting for sellers to come down in price, brokers say. They are waiting for sellers to go into default and foreclosure. Owners are unlikely to sell even distressed assets for pennies on the dollar because they still hope to recover their investment. Banks, on the other hand, may be willing to sell at a substantial discount in order to unload foreclosed properties from their portfolios. “A bank is motivated to stop the bleeding,” Estes says.

So far in this cycle, such real-estate-owned sales are few. RCA tracked only 13 REO sales by banks to third parties in the past year. But distress is mounting. The inability to obtain replacement financing for a maturing mortgage or construction loan is a common source of distress for investors. By this definition, more than 525 U.S. office properties, representing almost $18 billion, have fallen into distress since February 2008, according to RCA.

Estes believes a wave of distressed sales soon will break on the investment market and provide investors with tremendous opportunities to snap up discounted assets. He passes along these words of advice, given to him by a banker earlier this year: “If you are an investor and you buy real estate from anybody other than a bank in the next two years, you probably will have overpaid.”

Creating Success
Against this bleak backdrop, how can CCIMs overcome both the national stagnation in office sales as well as the unique challenges of their individual markets? It’s a good idea to start building relationships with lenders who soon will take possession of foreclosed properties, says W. Darrow Fiedler, CCIM, director of KW Commercial in Santa Monica, Calif.

Even after a foreclosure, lenders may be reluctant to sell an asset at a discount right now because that would force them to realize portfolio value loss. This creates an opportunity for CCIMs to help those banks manage their REO properties, keeping them in operation to postpone the need for a sale until the market improves, Fiedler says. Ultimately, CCIMs will be in a good position to pick up the sales listings, too.

Investment advisers can help a property stand out and succeed by taking a comprehensive approach to its marketing, says Peter Kozel, chief economist for commercial real estate service provider FirstService Williams in New York City. That begins with establishing a business plan for the asset in both the short and long term.

“You have to come up with a consistent argument for the property,” Kozel explains. “What is the property’s reason for being? What niche does it have in the marketplace? What kind of tenant does it attract? What’s the outlook for that tenant base?” Today, not just prospective investors but even tenants are asking for details about a property’s capital structure, he says.

Jeremy Kronman, CCIM, executive vice president at CB Richard Ellis in Pittsburgh, agrees that a comprehensive plan of attack increases a building’s chances for retaining or even increasing its value. “We talk about what’s the plan for each individual tenant,” he says. “Today we’re sitting there with the owner and the lenders and talking about what loan to value they want to achieve. We’re not just leasing agents; we are whole-building consultants.”

Financial Footwork
Financing remains a serious challenge, and dependable financing can differentiate a buyer from other bidders on an asset, says David Brightwell, CCIM, vice president of business development at Validus Group in Tampa, Fla. He is lining up funding sources in advance to prepare for future acquisition opportunities. “In this market, the No. 1 offer doesn’t necessarily get taken because the seller will accept a lower offer from a buyer that he knows has the ability to close,” he says.

Government-backed lending through the Small Business Administration’s 504 program provides a good source of leverage for buyers who plan to occupy all or most of a new space themselves, says Steven W. Moreira, CCIM, president of Magic Cos. in Longwood, Fla. “That’s one government stimulus that is working,” he says. “A bank can write a construction loan under 504SBA and have a 90 percent takeout guarantee from the government.”

Yet even this oasis of capital may be evaporating, says Soozi Jones Walker, CCIM, owner of Commercial Executives in Las Vegas. In the past 12 months, banks have increased their scrutiny of 504 loan applicants and will decline those who don’t have a track record of strong financial performance, she says. “If a potential buyer has had either flat growth or a little bit of declining income, they won’t approve them,” she says. “It’s a great program; [504 loans] are just hard to get now.”

In this market of stress and distress, CCIMs must continue to bring all of their skills to bear in order to preserve the value of their clients’ properties and help investors identify assets offering the greatest possible return. Despite the persistent challenges of the market and economy, this is not the time to slack off: The best buys are made at the end of a recession and investors make the most money in a cycle during the first five years after recession, Walker says.

“There is no coasting, but there are success stories out there,” Kronman says. “When you do your homework and when the ownership, financing, and leasing are all talking, you absolutely can pull off success stories.”

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Investment Analytics Group (IAG) can provide both transitional advisory services on a short-term engagement, as well as ongoing asset management following the transition period of your commercial real estate asset. Let IAG put our product knowledge and expertise to work for you and protect your real estate investment.

During economic downturns, owners and investors are tempted to make shortsighted cost-cutting decisions regarding the maintenance of vacant spaces or properties, often resulting in calamity. This is especially true in the fall, the ideal time to prepare for the onslaught of winter and to protect the value of your real estate by making repairs that may be been overlooked during the spring and summer.

The list of concerns regarding vacant buildings is extensive. There are the obvious problems such as frozen pipes and pest infestation. There is also a host of less obvious issues that require periodic professional monitoring to protect asset value. Following are a few of these issues:

* Mechanical, electrical and plumbing (MEP) system failures
* Building envelope damage (roofs, windows, etc.)
* Fire-protection equipment problems
* Building code certifications (fire extinguishers, RPZ, etc.)
* Life/safety equipment problems (failure of emergency lights and exit signs)
* Vandalism and theft
* Humidification problems resulting in mold remediation
* Infiltration of cold air that increases utility costs
* Local municipality intervention due to building and ground problems

The reality is that the cost of properly maintaining your vacant assets before an incident is a fraction of what it may cost to repair it after damage has occurred and can be measured both in dollars and human capital. Dealing properly with vacancies by utilizing the expertise of an experienced and skilled partner dramatically decreases the possibility of property calamities.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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This story recently appeared on GlobeSt.com, and hopefully the predictions by the experts are right. The decline in commercial real estate appears to be slowing, at least according to the latest statistics from the National Association of Realtors. So suggests its leading economic indicator, which registered only a 1.3 percentage point decline in its Commercial Leading Indicator for Brokerage Activity for Q2. The index reading was 101.5, compared to 102.8 in Q1. The index is at its lowest point since its inception in Q1 1994–as well as a steep drop from Q2 2008, when it was at 117.6.

“The decline is moderating a bit–we can hope that the steep declines may be coming to an end–but we are not nearly back to normal,” Lawrence Yun, NAR chief economist, tells GlobeSt.com.

The slight easing of credit and introduction of liquidity into the sector is largely the reason, he continues. TALF was extended for a few months beyond the December 2009 expiration date, Yun notes. Also, “there has been a nice gain in the REIT stock price index, which implies that credit conditions may be loosening.”

Yun’s best guess for commercial real estate recovery? “We’ll be bouncing along the bottom for some time, but meaningful gains won’t occur until the second half of next year.”

Getting to that point, though, will not be pretty. NAR is forecasting sharp increases in vacancies for the next year. It expects office vacancy rates to increase from 15.5% in the second quarter to 18.8% in the second quarter of 2010.

In the industrial market vacancy rates are likely to rise from 13% now to 15% in Q2 2010. Retail vacancies will edge up from 11.7% in Q2 2009 to 12.9% in the same period of 2010. Multifamily vacancy rates, by contrast, are expected to slip from 7.4% now to 7.1% in the second quarter of next year.

NAR is not the only leading economic indicator to point to an upcoming recovery. The American Institute of Architect’s latest Architecture Billings Index also suggests a rebound may be underway.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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An asset that is not generating an expected or necessary return is considered an underperforming asset, and is not exactly going to give you nights of peaceful sleep. While the asset may produce income for the company or person possessing it, the income may not be sufficient and is certainly less than expected causing even more restless nights.

If you have an underperforming asset, the team at Investment Analytics Group (IAG) can assist in finding the most profitable and sensible solution to your underperforming asset. Some possibilities that we will proactively engage in include:
– Avoiding lender liability suits. We will assist in the negotiation of a pre-workout agreement to minimize risks that can arise due to misunderstood verbal statements made in workout negotiations. Often times institutions find themselves the victims of claims that oral agreements, representations or waivers made in the course of a workout entitle the borrower to rights or damages never contemplated by the lender upon entering workout negotiations.
– Analyzing and summarizing all relevant information on the loan, the borrower, the collateral and relevant documentation and history. In addition to gathering all loan documents, promissory notes, guarantees, evidence of advances and notices, a complete written history of the loan will be prepared including the borrower’s financial statements, tax returns, litigation history, and credit rating.
– Working with your legal counsel, Investment Analytics Group will work with your in-house legal department or outside counsel to protect information gathered from being used as evidence in any future litigation.
– Determining the value of the project or property. IAG’s property valuations include: DCF modeling, NOI analysis, cash flow projections, risk and return analysis, occupancy cost and marketing opportunity analysis, budgeting updates and reconciliations, and cap structure evaluation. We also take a close look at the project viability, including non-financial factors such as the debtor’s track record, integrity, character, and business planning ability.
– Documenting the transaction completely. Once negotiations have resulted in a restructuring or workout, all aspects of the agreement will be thoroughly and fully documented.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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Do a Google search for Tenant-in-Common (TIC) & bankruptcy and you will definitely get more stories than you would have a year ago. The TIC industry has suffered some catastrophic blows and has left many TIC investors scrambling to figure out their next step. If you or your clients have distressed Tenant-in-Common (TIC) properties then you need to call or email Investment Analytics Group (IAG) to learn how IAG can help protect your client’s TIC real estate investment.

Investment Analytics Group (IAG) is committed to registered representatives and financial advisors – and to the established relationship you have with your clients. We believe that mitigating an investment’s downside and seeking the best possible solution through a proactive approach, rather than a reactive approach is the key to a successful outcome.
* Lease administration/audits
* Financial modeling and repositioning strategies
* Property operations/asset management”
* Accurate budgeting and budget reviews
* Continuous communication and efficient operations
* Disposition services
* Lease, ground lease, rent roll and operating analysis
* Post acquisition value creation and revenue/NOI maximization strategies
* Optimization of capital structure to include debt equity and hybrid financing
* Ownership structure analysis for all types of transactions including REIT, TIC, joint venture, and other single purpose entity structures

Investment Analytics Group (IAG) can help maximize the overall performance of properties by bringing knowledge and experience in property management, leasing, lease administration, acquisitions, and due diligence, enabling us to develop and implement ownership solutions to achieve the objectives in operating and leasing property. Call or email us today to learn how we can help.

About Investment Analytics Group
Established in December 2006, Investment Analytics Group (IAG) provides integrated commercial real estate advisory services to investors. Our core services include asset level due diligence, asset management, financial modeling, feasibility studies and other related advisory services.
For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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