Archives for May 2013

The budget deficit is falling rapidly and is now projected to be $642 billion, or 4% of GDP, in FY 2013. It was projected to be $200 billion higher just three months ago. This improvement will delay the next debt ceiling brawl from June to November. And with election season already starting by then, expect substantially reduced political rancor. Despite the improvement, revenues will cover just 81% of federal outlays.
Elliot F. Eisenberg, Ph.D.
www.econ70.com

WASHINGTON (May 28, 2013) – With vacancy rates modestly falling and rents moderately rising in commercial real estate sectors, market fundamentals have improved, but financing remains a challenge for small business, according to the National Association of Realtors^® quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, said the market is showing an uneven recovery.  “The wheels appear to be greased for the big players, but not so much for small business,” he said.  “Overall, the commercial sectors are firming nicely, with multifamily continuing to show the best performance.”
National vacancy rates over the coming year are expected to decline 0.1 percentage point in the office market, 0.5 point in industrial, and 0.3 point for retail; however, the average multifamily vacancy rate is forecast to rise 0.2 percentage point, with that sector still showing the tightest availability and biggest rent increases.
A companion report, the Commercial Real Estate 2013 Lending Survey,¹ shows widely varying availability of lending capital depending on property size, with a significant disadvantage for buyers of smaller properties.
Commercial sales volume of major properties valued at $2.5 million and above increased 24 percent in 2012 to $294 billion.  The uptrend continued during the first quarter of 2013, with a $72.8 billion volume that is 35 percent above the first quarter of 2012.  Sixteen markets in the first quarter experienced triple digit gains.
Commercial mortgage-backed securities regained market share in 2012, accounting for 22 percent of lending for major commercial properties.  A comparable source was government agencies, followed by national banks, insurance companies and regional banks.
Realtor^® commercial members report 85 percent of their clients’ transactions are for purchases under $2 million – generally small businesses.  These transactions are financed largely by private investors, along with local and regional banks, marking a bifurcation in capital availability based on property value.
“Despite the improvement for major commercial properties, 52 percent of Realtors^® report they had a commercial transaction fail in the past year due to a lack of financing,” Yun said.  “In addition, 42 percent of respondents said clients failed to complete a refinancing.  Credit for small business remains unnecessarily tight.”
Commercial members report that new and proposed U.S. legislative and regulatory initiatives, and regulatory uncertainty for financial institutions, account for the lack of capital in commercial lending for smaller properties.
NAR’s latest Commercial Real Estate Outlook² offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.  Historic data for metro areas were provided by REIS, Inc.,³ a source of commercial real estate performance information.
News release.

The process to begin filling the largest open space within city limits will likely start in less than a month.
Barring the unforeseen, the Las Cruces Planning and Zoning Commission is scheduled to meet June 25 to consider rezoning 30 acres at the former Las Cruces Country Club. A rezoning application was filed April 22 with the city’s Community Development Department seeking two zoning designations: commercial high intensity (C-3), and multi-dwelling high density and limited retail and office (R-4c).
If approved by the commission and then the Las Cruces City Council, there are plans to build and operate Park Ridge Medical Center, a 42-bed full service hospital, that would specialize in cardiac health care.
Information provided to city officials indicates the hospital would be developed by Galichia Hospital Group, a limited liability company that owns and operates hospitals throughout the U.S. A Galichia Hospital Groups brochure provided to city officials said developers are “partnering with over 20 local physicians who are investing in the real estate and equipment.” The brochure added “Las Cruces is experiencing rapid population and economic growth.”
Numerous messages seeking comments and details from Dr. Joseph P. Gallichia, co-founder and chief executive officer, and Michael Phillips, founder, chief operating officer and chief financial officer of Galichia Hospital Group, LLC were not returned.
However, Las Cruces developer Robert Pofahl, whose company has developed conceptual plans and conducted several meetings with city officials and residents about the proposed development, has said the sale of the former country club property is contingent upon the city approving rezoning. A sales price has never been publicly disclosed, but the property has been appraised at $7.4 million.
Currently, the 110-acre former country club property is zoned single-family residential medium density. The existing zoning designation allows for only one single-family residential home to be built on any portion of the 110 acres…
Continue reading source article from Las Cruces Sun-News
By: Steve Ramirez (Las Cruces Sun-News)