Property Information | |
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Office: | Free Standing Building |
Lease Rate: | $15.50/sf MG |
For Lease: | 1,894 sf + 1,583 sf |
SF: | 3,860 sf approx |
Space Plan: | Offices, Conf Rm, Break Rm |
Location: | West Tampa |
Parking: | Shared |
A unique opportunity for a high-profile Medical Office or Retailer that requires outstanding visibility. Currently, 100% occupied by Ethan Allen. Ethan Allen will reduce the 15,000 sf space that they currently occupy.
The tenant must be compatible with Ethan Allen & KIMCO. No Food or Restaurant use. Free-standing building.
Property Information | |
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Retail | Free-standing building |
Lease Rate: | Call |
Visibility: | Excellent visibility. |
Size: | 5,000-10,000 sf |
Space Plan: | Flexible |
Location: | Brandon Market Area |
Parking: | 56 spaces |
A 15,000 sf space in a multi-tenant center. A great space for medical or retail. Excellent parking, super visibility, excellent signage, and a high traffic count. Adjacent to Walmart
Property Information | |
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Retail | Free-standing building |
Lease Rate: | Call |
Visibility: | Excellent visibility. |
Size: | 15,000 sf approx. |
Space Plan: | Single tenant |
Location: | Brandon Market Area |
Parking: | 56 spaces |
Development Site – Zoned for Office Development.
Property Information | |
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Vacant Land | For Sale |
Sale Price: | $2,400,000 |
Visibility: | Excellent visibility. High traffic count |
Size: | 5 Acres |
Space Plan: | click brochure for floorplan |
Location: | South Hillsborough County |
Development Potential | 50,000 sf |
5 Ac
A 4,200 sf space in a multi-tenant center. A great space for medical or retail. Excellent parking, super visibility, excellent signage, and a high traffic count. Adjacent to Walmart
Property Information | |
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Office /Medical | Bright and Airy space |
Lease Rate: | Call |
Visibility: | Excellent visibility. High traffic count |
Size: | 4,200 sf approx. |
Space Plan: | click brochure for floorplan |
Location: | Brandon Market Area |
Parking: | Tons of Parking |
A Free-standing 1,984 SF medical building in the Pasco market with good parking, super visibility, excellent signage, and a high traffic count.
Property Information | |
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Office /Medical | Free Standing |
Sale Price: | $599,000 |
Visibility: | Excellent visibility. High traffic count |
Size:1,984 | sf approx. |
Space Plan: | click brochure for floorplan |
Location: | Pasco Market Area |
Parking: | Est 18-20 spaces |
A Free-standing 5,485 SF medical building in the St Petersburg market with exceptional parking, super visibility, excellent signage and a high traffic count.
Property Information | |
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Office /Medical | Free Standing |
Lease Rate: | $ call Broker |
Visibility: | Excellent visibility. High traffic count |
Size: | 5,485 sf approx. |
Space Plan: | click brochure for floorplan |
Location: | St Pete Market Area |
Parking: | 66 spaces (13 spaces/1,000sf) |
Property Information | |
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Office /Medical | Free Standing |
Lease Rate: | $ call Broker |
Visibility: | Excellent visibility. High traffic count |
Size: | 5,485 sf approx. |
Space Plan: | click brochure for floorplan |
Location: | St Pete Market Area |
Parking: | 66 spaces (13 spaces/1,000sf) |
Property Information | |
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Office: | End Unit |
Lease Rate: | $19/sf MG+ Sales Tax |
Visibility: | Excellent visibility on 56th St |
SF: | 1,116 sf approx |
Space Plan: | Offices + Reception |
Location: | Temple Terrace |
Parking: | Shared |
Property Information | |
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Build-out: | Full Medical build out |
Lease Rate: | $21/sf + CAM $5.00 |
Office Park: | Yes |
SF: | 2,000 sf |
Space Plan: | Medical |
Location: | SR 54 |
County: | Pasco |
Property Information | |
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Condition: | New |
Lease Rate: | $15/sf + CAM $4.50 |
Free Standing: | Yes |
SF: | 2,500 sf |
Space Plan: | Can modify interior to Tenant Requirement |
Location: | Access to Brandon Blvd |
County: | Hillsborough |
Address: 4751 66th St N, Kenneth City. FL 33709
Address: 4751 66th St N, Kenneth City. FL 33709
Medical Office For Lease Prime SR 54 Area, Land O’ Lakes FL
Prime location on SR 54. Between Vererans Expressway and I-75. Medical office with Reception Area, Doctors Offices, Exam
Rooms, Break Area
Address: 2638 Nanria Way, Suite 101, Land O’ Lakes FL 34638
Property Information | |
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Lease Rate | $21/sf NNN |
CAM: | $5.00/sf |
First Floor: | Yes |
SF: | 2,000 |
Use: | Medical Office |
Location: | SR 54 |
Building For Fitness Center For Lease or Sale in Bradenton
Investment opportunity. This building is one of the finest O.P. Rehab Medical facilities in the entire state of FL. This physical therapy Rehab Clinic and one-time Fitness Club has a large indoor pool and is located on the north side of Cortez, across the street from Publix, Walmart, and Aldi. Many other big box stores are in close proximity.
Address: 4702 Cortez Rd, Bradenton FL 34210
Property Information | |
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Sale Price: | $1’975,00 |
Lease Price: | Leased |
Free Standing: | Yes |
SF: | 10,000 |
Use: | Rehab Center |
Lot Size: | 0.95 AC |
Location: | Cortez Rd. |
Property Information | |
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Building: | 200,000 sf on 10 ac |
Price: | $4.35/sf As-is |
CAM: | $1.45 |
Tenancy: | Tenants |
Available Space: | 54,800 sf |
Zoning: | IH – Manufacturing and Distribution |
County: | Hillsborough |
Property Information | |
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Building: | 200,000 sf on 10 Acres. Multi-tenant. Warehouse/Manufacturing |
Lease Rate: | $3.95/sf NNN + $1.40 CAM |
Available: | 24,000-50,000 sf. |
Loading: | Loading Docks |
Zoning: | IH Industrial Heavy |
Ceiling: | Mostly 24 ft – some 16ft |
County: | Hillsborough |
By Steven Silverman
As a commercial real estate broker I have assisted multi-family clients with both market-rate and affordable projects. The difficulty that working folks experience in finding an affordable place to live should be a concern for all of us.
Most new apartments coming onto the market are in the luxury category. One reason for this is that due to the rising costs of land materials and labor, developers are finding that the only way for them to be profitable is to construct a premium product. The private sector cannot obtain a satisfactory return on investment by developing workforce housing.
Financing is another obstacle facing affordable housing. Commercial lenders will often make capital available only to the top tier of the apartment rental market. Projects targeted to providing housing for poorer Americans must rely on funding from federal programs such as low-income housing tax credits. We are not doing enough for workforce housing. The demand for workforce housing far exceeds the supply. The biggest shortage of housing affects middle range workers that earn 60%-120% of area median incomes.
Here are two innovative approaches that I have seen in the market place that may help to provide partial solutions to the workforce housing crisis
Ironically, the pandemic that hurt so many in the workforce may have created an opportunity to assist in the creation of multifamily apartments for middle-income workers. During the pandemic, one of the hardest-hit segments of the real estate sector was the Hospitality segment and many hotel properties found themselves in severe distress. Adaptive reuse of distressed hotels is an exciting avenue in which to expand the availability of affordable housing. Developers across the country are examining the possibility of converting distressed hotels into workforce housing. Several such projects are already underway.
For example, in Alabama, a private company has acquired a Ramada Inn that had been on the market for a year they are converting the former hotel into 120 energy-efficient one-bedroom workforce targeted apartment units. The development will include co-working spaces, a gym, a pool, daycare, storage, and even a nature trail. Rents will be in the range of 500 to $700.00 per month. The project will be completed in 2022. In Branson Mo, a former Days Inn property is nearing completion as a 341-unit apartment complex.
Credit: Fort Worth Housing Solutions
The private developers are first out of the gate. They are undertaking adaptative reuse projects without using federal funding or tax credits. The privately funded deals can close faster and give the owner more flexibility. But there is no reason that public housing cannot learn from what the private developers are doing and pursue a similar strategy. Help is available. I have spoken with contractors in Florida who are now focusing on adaptive reuse and can help developers and public entities in the analysis and construction of adaptive re-use projects
In the 21st century, we have moved towards the culture of sharing assets in order to more efficiently use the asset. We share vacation space assets using Airbnb. We use ride-share services such as Uber, office share spaces such as We-Work, bike share, scooter share, etc. In ten years, we will have driverless cars and we can expect to see people moving away from owning a car to a shared system where they summon a vehicle when they need one
So how can we use the sharing phenomena for housing? I am a co-host of the Invest Florida Show, a weekly podcast focused on real estate investment in Florida. Hosting the show gives me the opportunity each week to learn from smart people and be exposed to new ideas. One recent guest described his real estate investment strategy where he has figured out how to use a shared space strategy for real estate investment. He purchases small apartment buildings, removes the communal spaces such as the living room, dining room, study, etc., and converts those communal areas into bedrooms. Each property is of course different. But, as an example, he may end up reconfiguring a unit that previously had 3 bedrooms into a space with 5 or six bedrooms. He then rents out each bedroom for $500-$600 per month. The residents share the kitchen and bathroom areas. One might think that a shared living environment with residents living in such proximity would cause problems.
This enterprising landlord also figured out how to structure the management and ground rules so that there are very few problems with residents and less work is required for him as the owner. He told me that this is a win for the residents. It is a solution for a segment of the population. With his projects, they have a clean, affordable space where the building is maintained, and they feel safe. The landlord gains also. By creating additional rooms for rent he boosts his revenue and achieves an acceptable return on his investment. Is there a way to scale this approach?
The shortage of workforce housing was a problem before the pandemic, and it will only worsen as the population increases. It is a social issue facing all communities. Now, as the economic hardships caused by COVID-19 accelerate, the need for affordable housing will become even more pressing. There is no panacea; not one single simple solution to solve the problem. It is imperative to think out of the box and explore multiple creative ways to address this issue.
Property Information | |
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Office: | End Unit |
Lease Rate: | $1,674 per mo + Sales Tax |
Visibility: | Excellent visibility on 56th St |
SF: | 1,1116 sf approx |
Space Plan: | Offices + Reception |
Location: | Temple Terrace |
Parking: | Shared |
As commercial real estate brokers, we at Tampa Commercial Real Estate counsel our clients on how to improve their chances for success. One of the most important steps in the process of the acquisition of a property is to secure financing. It is imperative for investors to understand how to work with a lender and what information your lender will require in order for you to receive financing in the shortest possible time. Andrew LaSalla, a Principal at LSG Lending Advisors is a respected lending advisor who shared his thoughts on the subject with Tampa Commercial Real Estate.
Multifamily properties can be healthy investments. However, before you buy an existing multifamily apartment building, careful research must be done to determine whether to move forward with the property you’re considering.
Use this article as a guide to get the information you need before purchasing a multifamily property.
The first step is to ask the existing project owner for the current rent roll and the last three years of historical operating statements for the project.
The rent roll includes important data such as the type of unit, unit size, rent received, any subsidies for affordable units and whether units are occupied or vacant. It will also include move-in dates and lease expiration dates which can help you determine how long renters tend to stay in the building, whether most renters stay long-term or if there is a high rate of renter turnover.
Historical operating statements give the investor a snapshot view of the historical revenue of the property and ancillary income. They also provide a glimpse into the cost of expenses, including utilities, payroll, advertising, repairs and maintenance, security, property taxes and insurance, as well as other operating expenses. It is important to compare these expenses year-over-year, and look into large variances in further detail.
One-off capital expenses to upgrade the project, such as the installation of new HVAC systems, roofs, windows and siding, should be categorized separately. A common mistake is to categorize expensive, one-time repairs under “repairs and maintenance”. This will result in higher expenses and lower net operating income.
Investors should also review the occupancy records for the last three years. Look into whether occupancy has increased, decreased or remained consistent.
Once you have gathered and reviewed financial information on the property you wish to buy, look at data for other multifamily apartments in close proximity and in the same market.
Compare properties in the same class (A, B or C) with the property you wish to buy. Look at unit sizes, rental income and expenses compared to the project that you are looking to purchase.
Remember that older properties, such as class C assets, may require significant capital to make improvements that would justify increasing rents to compete with newer projects.
Experienced investors should use operating statements to assess where expenses can be reduced and where revenues can be increased in order to get the return they are looking for. Consider how long major renovations will take and how much they are likely to cost. If you are serious about a property after reviewing the financials, request recently-completed third-party reports, including a CNA (Capital Needs Assessment) report and the most recent appraisal.
It is important to note that lenders will also review a project’s historical operating statements when an investor approaches them for financial services. Lenders do not underwrite based on future projections.
When you are ready to request a term sheet from your chosen lender, having the following items available will help them expedite your request:
With a thorough understanding of how the multifamily apartment project you’re interested in currently operates and how it compares to competitor projects, you can make an informed decision to invest.
This blog post was contributed by Andrew LaSalla, Principal at LSG Lending Advisors. Andrew is a trusted financial consultant dedicated to helping clients secure loans for multifamily, healthcare, affordable housing and student housing properties.
Steven Silverman of TampaCommercial Real Estate sat on a panel of experts to discuss the state of the industrial real estate market in Tampa Bay Florida. This was part of an educational series held by the Greater Tampa Association of Realtors for the benefit of brokers and associates practicing commercial real estate. The other panelists were Pat Marzuli of Colliers and Julia Silva of Jones Lang La Salle.
It is one thing to read the market data and statistics but experience sometimes gives a different picture. All the panelists are practicing real estate brokers and were able to bring boots on the ground real-time experience to the discussion.
Here are my views on the subject: To understand the current state of Industrial real estate it is crucial to look at the supply and demand, Over the last three years over 8 million SF of new industrial space was delivered to Tampa Bay. Over 3.5 million SF were delivered in 2020 alone. That is the most industrial space delivered in 20 years. All this was new space delivered in the year that Coronavirus catapulted the economy into a new orbit. Logically, this much space coming onto the market would increase the market vacancy rate and reduce rental rates. That in fact did happen. Annual Rent Growth in the industrial sector fell slightly by 300 basis points. and is now roughly in line with the national average. At the same time, vacancy rates remained low at under 6% which is slightly under the national average. So what happened? It is amazing to look back and realize that during this crazy epidemic, all this new industrial space was absorbed. The second quarter of 2020 posted the second higher volume leased industrial space ever recorded in Tampa Bay. This came at a time when industrial leasing activity stalled nationally.
So what makes Tampa Bay such a nurturing environment for Industrial Real Estate.
Developers in Tampa are ready for more growth with millions of square feet of new projects hoping to break ground. However, the pandemic is causing some developers to pause and view the market with some caution. Construction prices remain high. On a national level, we have already seen some weakening in the national economy due to the pandemic and effects of a trade war and construction prices remain high. On balance, the Industrial sector in Tampa has been a stellar performer but it is not all roses. Market participants serving the hospitality industry and retail sectors have been certainly experienced a negative impact
Exciting technological changes are in the future for Industrial real estate. You will recognize the distribution and manufacturing facilities of tomorrow but they will certainly be different. Higher ceilings, Large lots for electric charging of vehicles; Autonomous vehicles will accelerate distribution; Drones will deliver merchandise; Robotics will play an increasing role; 3-D Printing will make manufacturers more nimble; Artificial Intelligence will make all facets of the industry more efficient. Growth in the industrial sector does not necessarily mean more jobs. This innovation will reduce the rate of participation of labor in the growth of the industrial market.
The trends bode well for the Distribution sector. The question is whether the manufacturing capacity that has moved offshore will come back to the USA. Many are touting the return of manufacturing due to the technological trends that will offset cheap labor costs and the advantage of local manufacturing being able to provide just-in-time delivery of manufactured goods. Perhaps this will occur to some extent, but I am not skeptical. I have been to factories in China and was amazed. All we read about here is that cheap labor is the reason why the US industry cannot compete. Touring Chinese factories, I realized that it is not only cheap labor that gives China an advantage. The technology that I saw in the offshore factories is vastly superior to aging equipment in USA factories. We are dreaming if we discount this. Our offshore competitors will not stay idle. They will continue to innovate and make the same technological advances we do. China and other offshore manufactures do not have to deal with the regulations that many USA manufacturers face. In the early ’80s, when I came to America, 90% of garments sold in the USA were made in the USA. Today, that number is less than 5%. Offshore manufactures have developed a skilled labor pool that we have lost over the past generation. Use it or lose it. I am betting that the growth in the Industrial sector will continue, but it will be in Distribution.
Example of an efficient distribution center we are working on in Tampa. High ceilings, Multiple Loading Doors. LED lighting. Clean and efficient.
We learned new behaviors during the Covid-19 epidemic. The new ways of working will be with us for a long time. The office market will always be there but it will be different. Fox News looked to industry leaders for their thoughts and interviewed Steven Silverman
https://www.fox13news.com/news/companies-dump-office-space-as-work-from-home-becomes-more-common
Property Information | |
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Building: | 4,217 SF heated |
Price: | $1,410,000 |
Cap Rate: | 6.1% |
Tenancy: | Long Established Medical Office |
Location: | South Tampa |
Folio: | 11674-0000 |
County: | Hillsborough |
Property Information | |
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Office: | Free Standing Building |
Lease Rate: | $ |
For Lease: | 1,894 sf |
Suite No: | 101 |
Space Plan: | Offices, Conf Rm, Break Rm |
Location: | West Tampa |
Parking: | Shared |
Fox News aired a segment on commercial real estate. They wanted to talk to a competent commercial real estate broker with a good reputation who has boots on the ground. They were referred to me. I spoke to them for 30 min and they aired about 30 sec. Nevertheless, I was happy to help. We are all in a difficult period.
Video Link: https://www.fox13news.com/news/struggling-businesses-push-commercial-real-estate-into-the-red
Florida is surrounded by water. Intuitively everyone knows there is a risk from flooding but we have learned to live with it. Most people have become oblivious. The thinking is that “that is a small risk that may affect someone else. It won’t happen to me.” Why would anyone be thinking about melting iceberg when they are sitting under the hot sun in Florida? But, science tells us that the Icebergs are melting and sea levels have been rising at an accelerated pace. Science also tells us that wearing a mask will prevent the spread of the Coronavirus. There are plenty of Floridians who scoff at this scientific notion the net result is that Florida has experienced a surging pandemic.
Florida is in the path of Hurricanes. Rising sea levels increase the likelihood that storm surges or water driven by hurricanes will flood properties. Flooding places more real estate and more people at risk in Florida than it does in any other state, by a wide margin. As an example, 40% of St Petersburg is inside the Coastal High Hazard Area that reflects whether a storm surge from a Category 1 hurricane could cause flooding. Imagine what flooding we would see if there is a Category 4 hurricane, which has occurred several times in Florida over the past few years. General insurance policies that property owners and renters carry don’t cover flooding, A specific Flood Insurance Policy is required to insure flood water damage. No other place in the world has the insured exposure to hurricanes as Florida does.
FEMA uses the best available technical data to create flood hazard maps that outline a community’s flood risk areas. CLICK: FEMA LINK
There are two factors to be concerned with:
1) Annual Cost of Flood Insurance:
Banks require properties that they finance that are located in Flood zones to carry flood insurance. Flood insurance can be costly and if your property is in a flood zone, you will pay for it.
The National Flood Insurance Program is up for reauthorization this year. Fiscal conservatives have said they want to use that opportunity to reduce the program’s subsidies so that people are paying something closer to the full cost of their risk. A cut in federal subsidies would particularly hurt Florida, which despite its exposure, pays the lowest average flood-insurance premiums in the country, according to FEMA data.
It is important to understand that a wave will be punishing Florida, whether we have a hurricane or not. That wave is the cost of insurance. The reason for this is Reinsurance, the insurance designed to buffer insurers from large losses. Reinsurance prices have risen by 26%. That has caused major insurance companies on Florida to raise premiums by as much as 33%. Several insurance companies have dropped clients in areas considered to be at high risk of hurricane damage. Citizens, the state-owned insurer of last resort is left holding the bag. Not only will not be able to cope if an expensive storm hits, but taxpayers will also be left holding the bag. for Climate change threatens to make higher insurance (and reinsurance prices) the new normal.
2) Property Values:
The risk for Florida is that climate change could drag down the real estate markets – residential and commercial. Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060.
The chief economist at Freddie Mac, warned in a 2016 report that Flooding in coastal areas could cause a real estate crisis more severe than the Great Recession. It could spread through banks, insurers, and other industries. And, unlike past recessions, properties at risk from Flood water may not recover.
Additional risks to property owners could come from the lending end. If we experience a storm surge and property values start to fall, banks could stop writing long term mortgages for properties in Flood zones. These properties will be more difficult to sell which will decrease their value.
The odds of dying in a car crash are 1 in 103. Because of the risk, we all wear seatbelts. The odds of flooding occurring to a property that is located in the 100-year flood plain is 1 in 100. Yet, aside from taking out flood insurance, people in those properties don’t do anything.
Properties A and B are nearby one another and on the same main road. However, Property A is located inside of the100-year Flood Plain depicted on the FEMA map. Property B is outside of the Flood Plain. It may be worth paying more for Property A because Property A has a superior location or it is a better building and you will transact more business at that location. That is a business decision. But all things being equal, I would advise my client to select Property B. Property B has a lower risk and you won’t have to pay flood insurance
If you are purchasing a property don’t forget to check the flood zone in which the property resides. If you have the choice between two properties, select one that is not in a flood zone. Also, wear seat belts and read science articles.
Steven Silverman, Broker Tampa Commercial Real Estate www.TampaCommercialREalEstate.com
Property Information | |
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Office: | Free Standing Building |
Lease Rate: | $22.50/sf MG |
For Sale: | $1,100,000 |
SF: | 3,163 sf approx |
Space Plan: | Offices, Conf Rm, Break Rm |
Location: | South Tampa |
Parking: | 17 spaces |
A few years ago, in the wake of the recession, the price of Gas fell one cent $2.00 per gal. I remember taking a photograph of the pylon sign because I did not believe that I would see this price again in my lifetime. It would be something to show my future grandchildren
Yesterday, I took another photograph. Gas had fallen to $1.79/gal. and prices are cheaper elsewhere
Price of Gas In Tampa
When the crown prince of Saudi Arabia gets a head cold the retail price instantaneously changes at my local gas station in Tampa, which is thousands of miles away. The price either goes up or goes down depending on how people interpret the situation and the mood of the prince. The price at the pump changes again after his doctor visits and gives the prince an aspirin. In the petroleum market and in the stock market the process is forward-looking and valuation changes are rapid. It is different for commercial real estate
The value of your commercial property has never been higher. That seems like an absurdity. We are overwhelmed by the Covid-19 Virus and the entire country has shut down. How can this be?
To understand why this can be true we have to look at the appraisal process and how we arrive at the value of a property? When trying to determine the market price of a piece of property, we cannot ask a Seller for his opinion because he will give a price that is too high. We cannot ask a Buyer because he will give you a price that is too low, because that is in his best interest. So. we ask an appraiser. Appraisers are arms-length and are highly trained to determine. It is true that there is always some art woven into the science of the appraisal process and different appraisers may arrive at a different value for the same property. However, the methodology is strictly regulated and has been tested by time. The system has been designed to use facts, not emotions to arrive at a property value. Buyers, Sellers, and Lenders rely on the appraisal process.
The procedures that the Appraisers follow to determine property value are rigid and uniform. Appraisers are compelled to look at comparable properties and, after accounting for differences such as property condition, location, size, etc , the appraiser will impute value to the property they are appraising. When analyzing comparable properties, the appraiser looks at sales price, lease rates and earnings of similar properties that recently transacted. The process that Appraisers have developed is based on historical information
Many Appraisers are still very busy today. There were a lot of deals in the pipeline before the COVID-19 pandemic and the lenders are, for the most part, honoring their loan commitments and Appraisers are providing strong valuations to the lenders. It does not matter that we are today in the midst of an epidemic. Appraisers have their hands tied. If they appraise a property in today’s market, they must use the established procedures of the Appraisal process to determine value. So when the Appraiser pulls up comparable properties today, he is reviewing properties that transacted recently, when we at the top of the real estate market. Appraisers are trapped by the system. They know that COVID-19 will have an effect on property values but the Appraisal process gives themy have no basis to discount property values at this point in time. It is an interesting situation, Buyers and Lenders who had initiated a deal before the COVID-19 crisis are moving forward.to closing. To some, it does not seem to make a huge difference but others privately express concern that they are moving towards closing, fearing that the market today is probably very different from the day that they committed to the deal. Many of them don’t have a choice. They can be sued for specific performance if they back out. The Sellers, on the other hand, are holding their breath and rejoicing.
Recognizing the absurdity, some Appraisers are now putting disclaimers into their reports. They may say that the value is valid at the date of Appraisal only. Or they add a clause saying that the value herein is subject to change based on market conditions
Real estate values are the story of supply and demand. You don’t have to be a rocket scientist to understand that Covid-19 will change the equilibrium, Uncertainty changes the demand. Intuitively, we know that prices have changed. I have already had buyers that had not inked the deal, back out. Some Buyers that had deals in progress are demanding a price concession, even if it means losing their deposit. At the same time, some sellers that I have spoken to are sticking to their sales prices saying that they have not seen values decline. They are right because history has not yet had time to reflect changes. Other Sellers, however, have taken their properties off the market. They will take a step back and wait for the market to recover. The crisis today is very different from 2008 which was basically a liquidity crisis. This time the government is promising that money will be available, so some market participants argue that the effect on property values will not be as dramatic. However, people die, people divorce, people move an some run out of money. Certain lenders may not restructure debt. Inevitably, some property owners will need to sell, even as demand decreases. Buyers are already assembling pools and building cash to take advantage of opportunities that may arise. As these transactions eventually get reflected in the historical Appraisal process, property values will start to decrease. Because the Appraisal process is historical and has a long tail, there will be a time lag in reflecting property values on the way down and again on the way up. No matter what an Appiraser or anybody else tells you, it is time for common sense.
By Steven Silverman
If you have any thoughts on this subject, please comment below