Fed Accelerates Plans to Raise Interest Rates in 2022 by Christopher Sanz, JD, LLM

Posted on January 20, 2022

In mid-December, the Federal Reserve Bank announced it is prepared to begin raising interest rates earlier than previously announced due to the potential threat of broader and longer-term inflationary pressure. In November, the annual rate of inflation exceeded expectations, reaching 6.8 percent, the largest 12-month increase since June 1982.

From a historical perspective, stocks have not fared well during periods of rising interest rates, when operating expenses and the costs of borrowing money increase, negatively impacting future profitability and stock price. For commercial real estate investors, there is a fear that rising interest rates will cause capitalization rates to also rise, triggering a potential decline in property value and weaker returns. However, investors also must consider that rising rates signal an improving economy that can commanded high rents and help to buoy commercial property values and investor returns over the long term. The key to navigating these potentially challenging times is to work with experienced commercial real estate advisors with a proven record of performance.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Commercial Real Estate Outperformed Expectations in 2021 by Kevin Sanz, CCIM, MSIRE

Posted on January 11, 2022

According to a report released in December by the National Association of Realtors, 2021 was a banner year for commercial real estate with investment acquisitions exceeding both pre-pandemic levels and the peak sales volume of 2006. Among the sectors performing exceedingly well have been retail and food services, especially free standing/single-tenant stores and units conveniently located in neighborhood shopping strip centers. Looking ahead into 2022, we expect demand for commercial property with strong fundamentals to continue along with declining cap rates, indicating lower investment risks and potentially stronger valuations, higher rents and improved returns for property owners.

Despite this optimistic outlook, investors must be forewarned that commercial real estate as an investable asset is entirely different from any other investment class, including residential property. Working with experienced commercial property advisors with deep tenant relationships and local market knowledge can help investors conduct thorough due diligence to minimize risk and help support investment goals.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Identifying Replacement Property in a 1031 Exchange by Christopher Sanz, JD, LLM

Posted on January 04, 2022

Investors must abide by very strict timelines and specific rules to yield the favorable tax deferral benefits of a 1031 exchange of real property. For example, investors generally have 45 days following a property sale to identify like-kind replacement property and no more than 180 days to close on the replacement property without triggering a taxable event. When identifying potential replacement property, investors must consider the following guidelines:

  • Investors may identify up to three replacement properties to complete the exchange
  • Investors may identity an unlimited number of potential replacement properties as long as the cumulative value does not exceed 200 percent of the sale of the relinquished property.
  • Investors may identify an unlimited number of potential replacement properties provided those properties can be acquired at 95 percent valuation.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

What Can You Learn from a Rent Roll? by Kevin Sanz, CCIM, MSIRE

Posted on December 21, 2021

One of the first documents investors will look at when evaluating potential investment property is a rent roll, which lists all of a property’s current tenants, the size of the space each tenant occupies and the percentage that space represented in the total building (net rentable square footage) as well as each tenant’s lease terms and the rental rate each pays per square foot. With this document, investors can glean critical information that includes the potential rental income a property can generate, current vacancies and opportunities for renegotiating lease terms, and how the rental rate compares to that of comparable properties in the same market.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Private Investment in Commercial Real Estate Rises Amid Longer Term Inflationary Fears By Christopher Sanz, JD, LLM

Posted on December 14, 2021

The annual inflation rate increased for the fifth straight month in September 2021, reaching a 13-year high of 5.4 percent, according to the Department of Labor. Fearing a prolonged period of inflationary pressure, many private investors have sought refuge in commercial real estate, which has historically weathered these headwinds. In fact, according to Real Capital Analytics, commercial property sales during the past nine months were up 10 percent from the same period in 2019, before the pandemic.

As an asset class, commercial real estate generally provides a hedge against inflation, providing investors with steady rental income and the potential for both rent increases and ultimately higher property values that often outpace inflation over the longer term. The challenge for investors, especially in in markets with rising demand and lower inventory, however, is finding the right property in the right location and at the right price point to meet their unique needs and goals. Working with experienced real estate investment advisors can go a long way toward finding that proverbial needle in the haystack and helping often before a property hits the market.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Net Lease Properties Continue to Shine by Kevin Sanz, CCIM, MSIRE

Posted on December 08, 2021

Economic uncertainty has not slowed robust net-lease commercial activity through the third quarter of 2021. The passive nature of these assets continues to attract investors seeking steady rental income, tax savings and long-term wealth building opportunities without any hands-on management responsibilities. However, not all net-lease assets have performed equally well throughout the pandemic, which has essentially changed the way consumers work, shop and enjoy their personal time. For example, grocers, pharmacies and do-it-yourself home and auto care retailers have become essential businesses as have quick-serve restaurants with drive throughs and dedicated parking for curbside pick-up service. In fact, many successful brands are now in growth mode and looking to change their retail footprint to include more stand-alone locations. The challenge for investors is getting in on these opportunities, often before they even hit the market. The solution is to work with experienced and active real estate investment advisors with deep relationships with national brokers and quality tenants.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

Orion Real Estate Group Enters Fourth Quarter with Record Property Transactions by Christopher Sanz, JD, LLM

Posted on November 30, 2021

Between Jan. 1, and Sept. 20, 2021, Orion Real Estate Group invested more than $345 million to acquire 97 properties representing more than 1 million square feet of net-lease space. These transactions included two portfolios of a combined 41 single-tenant Walgreens pharmacies in nine states, a 94,175-square-foot mixed-use retail and office property located in Pinecrest, Fla., and various CVS pharmacies and casual dining chains, including Panera Bread and Huddle House. During the same period, Orion sold 48 properties representing 435,670 square feet for more than $178 million.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.

 

What is Adaptive Reuse in Commercial Real Estate? by Kevin Sanz, CCIM, MSIRE

Posted on November 11, 2021

Adaptive reuse refers to the transformation of an existing real estate structure for a new and better use, thereby allowing owners/investors to maximize the value of the underlying real estate and extend the life of its useful purpose. Examples include renovating a shopping center into warehouse space or converting office buildings into multi-family apartments. The costs required for AdRu are far less expensive than those required for new construction, allowing investors the ability to renovate and readapt their properties to keep up with changing demographics and evolving lifestyle trends.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.