Tuesday, October 11, 2016

The Irish Experience

We just got back from a quick trip on the new flight from Bradley to Ireland, and it was a terrific experience, but also instructional.  Dublin is a city that, in some ways, would remind people of New Haven, but with more redheads.  There are lots of students everywhere, a shortage of rental housing, a big university right in the center, new tech companies starting up, and more restaurants than you could ever believe would be needed (and mostly all full).  Plus lots of beer--recently often craft beer.  Also like New Haven, there has been little commercial building over the past ten years, while the economy lagged.

What's different about Dublin from New Haven?  Well, it's a capital city, with all the economic power that that brings.  It has a major airport, with easy, and cheap, access to many parts of the world.  It's part of the EEU, and next to Britain, which just voted to leave that organization.  It has great public bus transportation with the city and around the country, in addition to rail. It has lots and lots of tourists.  And it attracts industry from other countries, including European headquarters of global firms.

Can we learn anything from their experiences?  After all, they've had a rough ten years as well, and many types of property have declined in value.  It's also much harder to get financing there, and lots of people can't get it.  However, if we work on job growth, transportation infrastructure, and attracting new industry, maybe the people (even the redheads) will come.

Thursday, September 29, 2016

The Multifamily Category is Still Hot

When I look at the LoopNet list of the most-often viewed properties in Connecticut each week, I am struck by how many are multifamily properties  (and also about how few are ever industrial, where there is a big supply).  Week after week, thousands of people view residential investment rental properties.  Why the appeal, and why is it not waning?

I think that the appeal is like all of real estate--a tangible investment in a time of uncertain returns in many investment categories.  It also is the type of investment where those who are handy, or have some free time, can improve properties or cut expenses, and raise returns, something that cannot be done with stocks and bonds.

But won't the supply exceed the demand?  People don't think so, and that's coming from two ends of the age spectrum--millennials and seniors.  Millennials, with little desire for home chores or fixed commitments, and with a lot of educational debt, are renting in bigger numbers and for longer.  And downsizing older adults are no longer finding a stigma in rentals, so they are often selling big homes and renting in urban areas especially.  Since Connecticut has a very high average age, we have a lot of those people.  Also, professionals who move here to take jobs are renting much more often.  They are renting more everywhere, for the reasons above, but our state has a very high percentage of people who want to avoid what they see as an illiquid investment--an owned house--and high estate taxes, so they consider buying somewhere else, or keeping the house they had elsewhere, and renting here.

Will this continue?  It seems to be holding up for the present, even in New Haven, which has loads of new product coming on line.  It may well be that, at some point, those who are slumlords, or who have not reinvested in their properties, will be forced to lower rents or make improvements, in order to compete with the newer buildings, but even that hasn't quite happened yet.  So the interest in the segment continues. 

Wednesday, September 14, 2016

Just a Reminder: We Consult Also

We are finding that more and more of our clients have the need for comprehensive real estate services that involve looking at an overview of strategy, current holdings, and future plans.  We are happy to provide those services, by the hour or otherwise, and to fill in other needed providers (appraisers, environmental consultants, construction experts) when required.  Commercial space owners and renters should not assume that they should wait to call an agent until they know what they want to do.  Just as with medical issues, "do nothing" is always an option, and often must be weighed against different alternatives, using information which may or may not be readily available.  That's where we come in, and we can do our best work when we are as familiar as possible with the mission, strengths, and resources of the organization.  So, please call us when you begin the process of evaluating space needs and inventory, and let us help you gather what you should consider, and add expertise that you don't have internally.  We are here to assist in any way!

Monday, August 29, 2016

Any Plans to Buy or Sell in this Tax Year?

It may seem ridiculous for me to be posting on a hazy, hot, and humid August morning that time is running out for real estate sales this year.  However, much of commercial real estate is driven by tax concerns, and taxes play an important role all the time, even when the reasons for activity relate to other concerns.  Therefore, it's wise to consider that it takes a long time to close most properties that need environmental testing or financing, so now would be the time to get moving, if you intend to accomplish anything by the end of 2016.  In the real estate field, we try not to count on much getting done after mid-November.  Since that is about ten weeks away, I'm not being overly cautious to say that Labor Day should be your signal to ramp up your search or your sale.  Even leases can be affected by the calendar year for taxpayers, if you are interested in deducting costs of fit-up or commissions.

So time's awasting--get moving!