"To be sure, (2003) was a tale of two properties," says Jay Rollins, SVP and managing director of locally based Newman Financial Services Structured Products Group, which has financed more than $1 billion in commercial real estate transactions since its inception in 1999. "While real estate fundamentals, such as occupancy and rental rates, continued to decline in most of the country, so too did cap rates," says Rollins, whose company is a division of GMAC Commercial Holding Capital Corp.
"Properties that were well located and had strong tenants sold for record amounts," Rollins continues. "Cap rates on these properties fell to historic lows, as market investors sought alternatives to the stock market." That's the good news.
"Owners of properties that were not well-tenanted or well-located watched their values decline," he adds. "Most properties were able to hold on to their assets, however, due to low interest rates and future optimism."
Indeed, optimism continues to grow, he says. "It looks like the real estate industry may have dodged a full-fledged recession."
This year, Rollins says, the key benchmarks for real estate executives will be corporate job growth, interest rates, occupancy, rental rates, consumer confidence and stock market performance.
The company provides "one stop shopping" for multi-family and commercial property financing, he says. SPG is a direct lender offering customized, structured relationship based financial solutions for the acquisition, redevelopment and refinance of income producing properties.
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