Costner Commercial Realty
NNN Sales and Lease Investment Properties
Are you interested in owning commercial real estate
Whether you’re considering investing in an apartment complex, office space, light industrial or a self-storage facility, There are many reasons you may want to consider adding commercial real estate to your portfolio.
Costner Commercial Realty Services include
Market Analysis: Brokers assess local real estate markets to provide clients with insights into current trends, property values, and potential opportunities or challenges.
Property Valuation: They help clients determine the fair market value of a property by conducting thorough valuations based on comparable sales, income analysis, and other relevant factors.
Property Listings and Marketing: Brokers assist clients in marketing their properties for sale or lease. This involves creating marketing materials, advertising, and leveraging their network to attract potential buyers or tenants.
Tenant/Buyer Representation: For businesses looking to lease or purchase space, brokers represent the tenant or buyer's interests in negotiations with landlords or sellers, ensuring favorable terms and conditions.
Landlord/Seller Representation: Brokers work on behalf of property owners to secure tenants or buyers, negotiating leases or sales contracts to achieve the best possible terms for their clients.
Negotiation: Brokers use their expertise to negotiate deals that benefit their clients, whether it involves lease terms, purchase prices, or other contractual agreements.
Property Showings: They arrange and conduct property showings for potential tenants or buyers, providing insights into the property's features and helping clients make informed decisions.
Due Diligence: Brokers assist clients in conducting due diligence on a property, including reviewing legal documents, zoning regulations, environmental assessments, and other factors that may impact the transaction.
Network and Connections: A well-connected broker has an extensive network of industry professionals, including other brokers, developers, lenders, and legal experts. This network can be leveraged to the benefit of the client.
Market Intelligence: Brokers stay informed about market trends, economic indicators, and industry news, providing clients with valuable information to make strategic real estate decisions.
Lease and Contract Management: They help clients navigate the complexities of leases, contracts, and other legal documents, ensuring that all terms are clear, and potential risks are mitigated.
Advisory Services: Brokers act as advisors, offering guidance on investment strategies, property development, and other real estate-related decisions.
Commercial Retail Trends In 2023
Retail outlook is exceeding expectations. Retail tenant demand has skyrocketed over the past 18 months. The United States will close 2023 with roughly 35 million square feet of new retail product across all shopping center types. The industry is coming to realize that the nation will keep shopping for most of its goods and many services in shopping centers indefinitely, even if e-commerce continues to take market share away from in-store retailers – due in the most part to a collective reassessment of the sector than by any dramatic recent shifts in supply and demand dynamics.
Hybrid work is here to stay. The real estate industry has largely accepted that the office sector will not be returning to its pre-pandemic state, as employee work and commuting preferences are standing firm. Office buildings have lost their appeal to investors, with sales transactions down more than twice as much as other major property types. While there is a call for repurposing of high-vacancy office buildings, industry leaders caution that not all can be economically converted, and a better solution may be demolishing them and repurposing the land.
Outlook still sunnier in the Sun Belt. The Sun Belt continues to be an attractive area for households, firms and investors, due to lower regulations and taxes, along with a growing labor force. There is a strong and sustained market correlation between the overall real estate prospect ratings and home builder ratings in this region. Of the top 20 markets for “overall prospects,” 15 of them are located within the Sun Belt. However, escalating risks from climate change could affect the trend of positive investment we’ve seen in this region.
It’s all about the debt. Rapidly rising federal debt could potentially “crowd out” private investments in the industry, leading to slower economic growth and higher interest rates, both of which would create long-term delays on property construction, investments, and returns. Primary debt sources such as originations have fallen, enabling private debt sources to step in where others refuse to lend. Credit has become more expensive and strictly underwritten, leading borrowers to hold onto their existing debt. Despite the lack of credit, some investors are cautiously pursuing deals and lining up to take advantage of undervalued assets. The industry is seeing its highest “buy” rating since 2010, signaling a favorable entry point for acquisitions after a decade of unabating appreciation.
CRE learning to navigate AI. AI advancements are showing promise in the real estate industry, offering capabilities such as enhancing the property search and analysis process, reshaping how investors assess potential investments, improving the customer experience, and streamlining due diligence and fraud detection in real estate transactions. However, despite AI’s tenured use in the industry, many of its capabilities are still largely unknown to our CRE experts, with lack of understanding and AI misinformation being cited as key barriers to adoption.
Adapting for future climate challenges. The number of billion-dollar climate events continues to rise and growing government regulations and ESG mandates, especially in leading CRE markets, means property owners and managers have more reasons than ever to make ESG a priority. A way to achieve more sustainable development is to reposition the development and design process. Not every building will be converted for each of their uses; some assets will simply become obsolete and need to be demolished. Architects and developers are beginning to explore design for disassembly, which could maximize economic value and minimize environmental impacts of destruction and embodied carbon through reuse, repair, remanufacture, and recycling.
Downtowns need to reinvent themselves – again. The future of downtown vitality may hinge on whether the economic forces of agglomeration continue to concentrate high-valued firms and industries into cities. Downtowns face more live/work/play alternative communities in surrounding suburbs, smaller cities and even in their own city neighborhoods that will compete for their economic vitality.
Housing crunch. A key challenge that continues to cause pain is housing affordability. The United States experienced the fastest-ever deterioration in housing affordability over the past three years as housing prices soared during the pandemic, followed by a historic mortgage rate shock that more than doubled mortgage interest rates. After sharp rent escalations last year, rent growth has eased (for now) due to large supply deliveries, but is expected to resume as construction has fallen. One answer has stood out to solve the affordability crisis – build more housing, preferably at all price points.
Retail Stores: Several retail and department went bankrupt in 2020 and 2021 as the economy adapted to quarantines and high COVID-19 transmission rates. As more and more consumers shop online, experts predict up to 25% fewer retail stores by 2025. Retail stores in urban areas, like New York and San Francisco, are expected to be replaced with healthcare, grocery, and other alternative stores.
Offices: According to CBRE, office demand could be permanently cut by 15% as more companies shift to work-from-home policies. As a result, office building supply will continue to increase. However, we have seen the emergence of “hybrid” office policies over the last year, requiring workers to come in only on certain days of the week. This trend may stabilize office spaces as businesses look for ways to maintain some in-person workdays.
Hotels: Hotels are predicted to struggle all throughout the year ahead, despite some eased regulations on traveling. Many are not expected to recover until 2023, and upscale hotels that offer amenities for travelers won’t stabilize until 2025. Hotels in more populated cities will suffer the most as many try to steer away from densely populated areas.
Warehouses: Warehouses are expected to be the leading performer among commercial real estate investments. Their success is due to companies trying to keep up with the growing demand for e-commerce orders. Real estate experts predicted an additional demand of 250 million square feet for warehouse space in 2021.
Apartments: Initially, apartments were expected to struggle during the pandemic as many would be unable to pay rent. However, multifamily properties are performing well as the demand for housing has not decreased. With apartments at more attainable prices and historically low-interest rates, they are expected to remain stable in the year ahead.
Rental Property Upgrades: Multifamily property owners may notice an influx in applications for larger units as renters adapt to work-from-home lifestyles. Upgraded units may also become more desirable in competitive markets throughout 2022 as renters seek to improve their living arrangements.
Commercial Development: New development projects are expected to rise as housing markets across the country attempt to meet growing demands for housing. Commercial investors skilled in development projects may find ample opportunities for new builds in the year ahead.