Years ago, a New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted IF he could prove satisfactory title to a parcel of property being offered as collateral. No big deal; customary request.

The title of the property dated back to 1803. Instead of tracing title back 50 years, the customary amount, the lawyer traced it all the way back to 1803. This took him three months.

After sending the information to the FHA, he received the following reply (actual letter):

“Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.”

Peeved, the attorney sent back the following (actual letter):

“Your letter regarding title in Case No. 189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application.

I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased, by the U.S., from France in 1803, the year of origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by right of conquest from Spain. The land came into possession of Spain by right of conquest made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Isabella. The good queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus’ expedition.

Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time and of the world as we AND the FHA know it. I hope to hell you find God’s original claim to be satisfactory.

Now, may we have our damn loan?”

The loan was approved soon thereafter.

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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In the commercial real estate investment world, an investor will more often than not make a mistake or two. They might be subtle errors, but over time the costs can be compounded and the entire real estate portfolio can be affected.

At Investment Analytics Group (IAG), we can help you see the big picture and we are your partner. We 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. If you have a distressed commercial real estate investment property or just want us to look at the performance of your property please contact us at your earliest convenience.

Below are some common errors that in almost every case the cause can be traced to a lack of knowledge about a few simple precepts that form the ground rules of successful commercial investments.

1. Failure to mind the balance sheet – There are four ways to make money in real estate: cash flow, appreciation, equity growth, and tax benefits. The operating statement shows just one of those – the cash flow. The balance sheet shows the other three.

Just as one adjusts rents and expenses to improve operating performance, the balance sheet should be managed to best utilize the assets. The key measure, contrary to popular belief, is not ROI (return on investment); it’s ROE (return on equity). These decisions also affect the speed of wealth creation and tax efficiency.

That’s three of the four or 75% of the sources of profit! If you don’t understand your balance sheet, sit down with an accountant and get a lesson in the basics.

2. Bad deals and bad partners – It’s a given that we are not going to be right every time. We’re going to wind up with properties that don’t perform as expected, or that the market direction moved against, or ones we just don’t like. As Warren Buffet said, “the first rule of investing is to not lose.” Learn to spot a losing position quickly and get out.

This is not to advocate abandoning an investment plan because of minor setbacks. Every project has them, and that’s where perseverance is required. But a deal that goes sour on several fronts at once is a candidate for the “learning experience” pile. Don’t fall in the trap of being “married” to a position. The support payments will swallow you whole.

The problem may not be the property, but the people. When problems arise in partnerships, especially those that started as friendships, things can get sticky and uncomfortable. Pain may be required, but misery is optional. If your partners are driving you crazy, or if you’re all crazy, exercise a little civility and be willing to call it over.

If a good buy/sell arrangement was not included in your partnership agreement, make your own. One solution: You could write down a number that you will either pay for your partners’ interest or accept for your interest in the assets. That’s the same way my mom made my brother and me divide the last pieces of our favorite pie; one cuts the slices and the other gets to choose his piece. It instantly ends any haggling or jockeying for position.

Close the deal quickly and move on. Life is too short.

3. Over-reaching- Swinging for the bleachers in high-risk, home-run-type deals that require more capital or expertise than you have is a sure recipe for disappointment, frustration, and can end in disaster. Before you start “thinking outside the box” make sure you know how things work inside the box.

It takes hard work and perseverance to achieve success in any field, and real estate is no different. In addition to property-specific plans, it’s a good idea to also have a “big-picture” plan of your investments–where they need to take you, how, and when.

As you increase your knowledge and capacity, the big deals will come, and you’ll know you’re ready when you automatically focus on the pitfalls before the rewards.

4. “Dirt-rich, cash-poor” – This refers to the situation of having more land than cash to cover it and is a common outcome for an investor who accumulates a bunch of properties that have nothing in common but their owner.

If you have multiple properties and are using the gains from some to cover losses in others and losing the battle, it’s time to get off the treadmill, despite the temptation to hang on. Go through your portfolio in detail. Identify improvements that you can make immediately and do them. Dump losers and anything that has needs that can’t be funded in the next year.

Be merciless. Look at it like cutting diseased branches off of a tree: Serious cases may require aggressive pruning to save the core. Then focus your energy and resources on creating maximum value in the remaining properties that fit your big-picture investment goals.

5. Not using local market knowledge – We all read the national media and trade magazines and get a sense of what the “market” is doing. But in reality, all real estate is local. There is no national real estate market.

There isn’t a ticker at the bottom of the screen on CNBC that tells me what my buildings are worth. Their value is determined by local market conditions, for example: rental rates, occupancy levels, competitive space supply, demographic trends, etc.

Our existing investments provide a window on performance and needs of that market that is a competitive edge over other investors. But it is only an edge if it’s used.

By systematically collecting just a few local demographic statistics (job growth, population growth and income) and property performance fundamentals, we can get ahead of the curve. We see trends coming rather than trying to catch the last one; we create our own opportunities and reduce our vulnerability to competitive projects.

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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A great commentary from National Real Estate Investor about how many investors in their elusive quest for the lowest price, are letting opportunities sail by.

Amid an avalanche of pessimistic commercial real estate forecasting, many investors continue to wait for a market bottom before buying distressed notes, properties and securities. Buyers are often grossly undershooting price targets, while sellers are overshooting. And the result has been the stalemate that — combined with the credit crunch — has gripped the industry for the past 15 months.

Rather than continue their elusive search for a market bottom while letting opportunities go by the wayside, investors should consider shifting their focus and identify viable real estate investment strategies tailored to meet their needs.

Case in point, Prudential Mortgage Capital launched a $1 billion commercial lending program in February, and since then has deployed about half that capital in its account. Prudential and the other active lenders today have little competition, allowing them to dictate underwriting terms and seize the best lending opportunities available. Such dominance was not possible in the previous real estate up cycle, due to an abundance of competing capital.

Prudential recently stated in its third-quarter earnings report that its return on capital from real estate lending activity is in excess of 7%, a rate of return that is quite superior to the safe bet of the 3.5% return on 10-year U.S. Treasury bonds.

In another case, S.K. Hart Properties based in Newport Beach, Calif. recently bought the Bayview Corporate Center office complex, the former headquarters of failed Downey Savings & Loan. S.K. Hart purchased the asset from the FDIC for $53 million in an all-cash deal.

Totaling about 332,000 sq. ft., the two, six-story towers represent the largest FDIC asset sale to date from its portfolio of failed bank assets. Bayview Corporate Center was only 23% occupied when the deal closed.

These transactions represent distinct real estate investment programs with distinct investment objectives. When other prudent investors find their ideal opportunities, the question of price discovery — which is keeping many buyers on the sidelines — will eventually become an irrelevant one.

To be sure, property sales and refinancing activity are still occurring, even though the pace has slowed significantly. The Mortgage Bankers Association reports that commercial and multifamily loan originations fell 12% in the third quarter compared with the second quarter. On a year-over-year basis, the drop in the third quarter was a whopping 54%. But be that as it may, a number of lenders and their loan intermediaries are beginning to announce that more deals are closing, particularly in the small- to mid-cap multifamily and credit-tenant markets.

Even though forecasts for further deterioration in commercial real estate fundamentals continue unabated, many investors are still in search of returns that are simply not realistic in today’s environment. Private equity funds and their participants have grown accustomed to returns in excess of 40%, with anything less than that viewed as disappointing. This group is among the greatest pool of potential distressed asset buyers, but to date it has spent more time on the sidelines than anything else.

Preqin, a London-based alternative asset investment firm, recently reported that fund raising and investment activity at 46 private equity real estate funds was suspended through the first three quarters of 2009. This number is running well ahead of 2008, when a total of 27 funds were put on hold for the entire year. The company expects this trend to continue well into the fourth quarter, and possibly into 2010.

This trend suggests that because high-yield investors are unable to easily meet their lofty investment objectives in today’s market, they are opting to wait for others to discover a market-clearing price before they will jump in and buy.

The problem with that strategy is most other investors share a similar view. They continue to hold out for a commercial real estate Armageddon — one that has yet to materialize.

Investors like Prudential and S.K. Hart Properties that have realistic expectations in place will reap the benefits of either above-average yields or a lease-up program that they can control. These are by far preferred investment objectives to the all-consuming task of chasing the absolute lowest price.

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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When it comes to due diligence, commercial real estate properties are a completely different animal from residential properties in regards to assessing value. That may seem like stating the obvious, but it is easy to overlook the many details that come into play.

For commercial real estate, value is determined in an inverse proportion to the degree of risk inherent to the continuance and stability of the income stream from the property. And of all the commercial property types, perhaps none is more complex in evaluation than a multi-tenant property, either office or retail.

The function of due diligence is to verify, verify, verify.
One of the first steps in your due diligence checklist should be the tenants of your potential investment real estate property.

Comprehensive due diligence services are Investment Analytic Group’s specialty. The IAG team has performed due diligence on commercial real estate valued at more than $1.2 billion including retail, office, industrial, and multi-family properties across the United States. We guide the process, keep clients involved as much as they prefer and, most importantly, communicate with you every step of the way. Due diligence is a way of preventing unnecessary harm to either party involved in a transaction and quality due diligence contributes to superior returns. Whether analyzing office, retail, flex, industrial or multi-family properties, a thorough evaluation in the beginning helps the investor realize projected returns.

Tenants
Review and confirm the terms of all leases, paying particular attention to co-tenancy clauses, which are common in retail properties. These allow retailers to reduce the base rent, eliminate base rent and pay percentage rent based on sales, or terminate a lease when an anchor tenant or another identified tenant exits the property. Other items to take note of include “early outs,” which permit tenants to terminate leases in advance of normal termination dates, downsizing rights that allow tenants to reduce the size of the leased premises, tenant bankruptcies, and claims by a tenant against the landlord.

Require estoppel certificates from each tenant. This item usually is subject to negotiation between the seller and buyer as to the number of estoppel certificates required and, if less than all, from which tenants (anchors, occupants of more than a certain number of square feet). It also will indicate whether the seller is in default.

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) 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. At IAG we can help by offering the following services:

* 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, Tenant in Common (TIC), joint venture, and other single purpose entity structures

We see the big picture and we are your partner. At IAG, we 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.

If you have a distressed real estate investment property or just want us to look at the performance of your property please contact us at your earliest convenience.

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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The goal at Investment Analytics Group (IAG) is to provide the best professional services available for the sophisticated real property buyer. Every day we set out to build trust, nurture relationships, and give our clients a tangible benefit as they seek real property investment. IAG exists largely because our values and skills form a foundation for exceptional team work and results. In what we do every day, our business philosophy rests upon four critical elements:

Vision – We pride ourselves on pioneering creative, customized solutions and product offerings. We will strive to be the very best at what we do, everyday, while maximizing investor returns.

Dedication – Understanding the complex needs of the customer and staying true to the investor’s objectives is paramount. IAG is committed to building client wealth, trust, and long term relationships.

Integrity – Staying true to ourselves and serving our clients’ needs with the utmost in honesty, professionalism, and reliability.

Results – Delivering an unwavering and inspiring solution that yields tangible benefits and lasting value for our clients and investors.

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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The weakness of the U.S. economy has given rise to the largest epidemic of foreclosures in American history. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.

The new opportunity is known as ‘Bulk REO Investing’ or ‘REO Package Investing’ and it’s a huge opportunity. Consider the fundamentals of the Bulk REO business. To understand investing in Bulk REO, you have to understand the foreclosure process.

A home owner who misses one or more mortgage payments is faced with an ever-increasing volume of threatening correspondence from their lender. The formal process of foreclosure begins at the lender’s discretion. From that time through public auction is called ‘preforeclosure’.

To complete the foreclosure process, the property is auction to the public. Ownership of the property is returned to the lender if the property is not sold at auction. Such a property is then classified as an ‘REO’ (Real Estate Owned) by the lender.

Lenders usually try to unload their REO properties at close to retail price by listing their REO’s with a real estate broker. However, REO properties are now frequently sold for far less than their ‘book value’. But the price of receiving such great pricing is the need to purchase multiple REO properties (a ‘package’) rather than individual properties.

There is huge profit potential in these REO packages for qualified real estate investors. One of the best ways to take advantage of Bulk REO Investing opportunities is to partner with a well-regarded source of funding. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds.

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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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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The market for investment in real estate has grown to become one of the staple asset classes of any sophisticated investor’s portfolio. When one considers all the alternatives for investment, whether it be cash, bonds, securities, or real estate, it has become clear to every experienced investor, adviser, and strategic buyer: they need real estate in their portfolios. This is where Investment Analytics Group plays a crucial role; we facilitate the solution for the need.

Many investors realize they need real estate in their portfolios but are not sure how to make educated investment decisions when buying it or managing it; other experienced buyers and sellers often lack the needed resources to: 1) gain access to and qualify superior real property investments efficiently, and 2) effectively manage the assets for positive cash flow and growth. Investment Analytics Group helps inexperienced buyers facilitate property investment opportunities, perform their due diligence, make highly informed decisions, and manage their assets. Investment Analytics Group can provide experienced buyers with greater expertise, resource support, and breadth of relationships.

The mission of Investment Analytics Group (IAG) is to provide the best professional services available for the sophisticated real estate investor, to build wealth, and protect long term capital. Our goal every day is to build trust, nurture relationships, live by our values, and provide our clients a tangible benefit from their real property investments.

About Investment Analytics Group (IAG)
Investment Analytics Group (IAG) was established in December 2006 ago to provide 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. Our business model and services are not reactionary to what many other firms consider “opportunity” in this current distressed environment. For more information visit us at www.iagroupllc.com or contact us at 208.846.8476 or info@iagroupllc.com.

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