Archives for May 2014

Thanks to all of the brokers, sponsors and guests who attended the May CCIM Deal Making Session. Nearly 24 million dollars of commercial real estate properties available for sale were presented from all over New Mexico.

	Name	Property	Price
1.	Jim Smith	5050 Broadway Blvd SE	$3,000,000
2.	Todd Clarke	1400 Virginia NE	$4,333,000
3.	Stephen Caruso	1119 Candelaria Rd NW	$650,000
4.	Jim Smith	98th St and Volcano	$3,550,000
5.	Jim Smith	7201 Bluewater Rd NW	$600,000
6.	Dave Vincioni	1419-1423 Carlisle Blvd NE	$570,000
7.	Glenn Wright	2801 4th St NW	$765,669
8.	Joel White, Hunter Greene and Patti Peixotto	2600-3650 Yale, 2350 Alamo & 1601  Randolph	$7,950,000
9.	Glenn Wright	4500 Silver Ave SE	$595,000
10.	Brent Tiano	8305, 8311 & 8313 Menaul Blvd	$879,750
11.	Brett Hills & Calder Conrad	413 Adams SE	$250,000
12.	Cole Flanagan & Rich Diller	4196 Highway 528	$849,000

 

The US is in the middle of a major evolution in policy concerning cannabis. In an era of legal supply and demand for pot, where are the commercial property opportunities?

In twenty-one of the fifty states, marijuana legalization laws have passed. While federal law bans all sale and possession of cannabis, enforcement in states varies quite a bit. Washington and Colorado have repealed state laws prohibiting the recreational use of cannabis, choosing a regulatory regime that is contrary to federal statutes. The gap between the federal “war on drugs” and state’s rights has never been greater and only shows signs of widening.

A Dealmaker Steps Into The Breach

Addressing gaps in markets is what entrepreneurs do, and the legal cannabis business promises to attract many business visionaries, lured by what is surely a multi-billion dollar market.  Serving that market means finding the space and doing the necessary property deals.

Catching a lot of attention for doing just that is one commercial real estate pro named Llorn Kylo, CEO of CannabisRx, a Scottsdale, AZ based real estate company who is snapping up millions worth of industrial properties in Illinois, California and Florida. Angela Gonzalez of the Phoenix Business Journal reports:

Cannabis-Rx Inc., a Scottsdale-based real estate company that is buying real estate for the medical marijuana industry, has paid $3.26 million for properties in California, Illinois and Florida.

The new publicly traded company just secured $30 million in financing to find real estate and financing for pot businesses.

Llorn Kylo, CEO of Cannabis-Rx (OTCQB:CANA), said he has been looking for properties in Arizona, but hasn’t found anything compelling yet.

“I certainly am looking and hope to get back to you with something in Arizona, but nothing just as of yet,” he said.

The real estate firm paid $1.26 million for a 209,000-square-foot building in Florida that will need another $1.8 million in upgrades.

Yes, he realizes he’s spending more on upgrades than on the building, he said.

He has contemplated buying vacant land and building from scratch, but the zoning permit process takes longer. For now, he’s looking at buildings he can rehabilitate.

Cannabis-Rx also just paid $2 million for four properties in San Francisco and Chicago.

The company already owns 37 properties in Florida, Illinois, California and Washington. Nine are ready for sale, four are under contract to be sold and 24 are being renovated.

Kylo said he’s interested in additional properties in California, Michigan, Washington and Colorado.

“I’m looking for distressed-type assets that need some sort of rehabilitation to improve the building,” he said. “We crystallize gains to improve our returns by finding diamonds in the rough.”

He said the company has achieved an average internal rate of return of about 32 percent per property.

Where Mr. Kylo leads, I’m sure many will follow. For all appearances, licensed marijuana distribution represents a property market sector with only growing demand for space devoted to its supply chain.  While the federal vs. state enforcement picture remains murky, in the states that have determined their own marijuana rules, the farm, industrial, warehouse and retail sectors all stand to benefit greatly from the arrival of a legal cannabis industry.

By: Wayne Grohl (The Source)

Click here to view source article.

WASHINGTON – REALTORS® Report Positive Outlook in Commercial Market with Increases in Sales Volume, Income
REALTORS® who practice commercial real estate reported an increase in sales transaction volume and medium gross annual income last year, according to the 2014 National Association of REALTORS® Commercial Member Profile.
NAR commercial members who were surveyed conduct all or part of their activity in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily, and retail buildings, as well as property management. The survey shows that even with challenges in the market, commercial members saw a rise in median sales transaction volume to $2,554,700, up nearly $50,000 from 2012.
“Despite a government shutdown, regulatory changes and a budget sequestration, ongoing job creation has helped the commercial market make continued progress,” said NAR President Steve Brown, co-owner of Irongate Inc. REALTORS® in Dayton, Ohio. “REALTORS® who practice commercial real estate help build our nation’s communities by helping their clients make informed business decisions and reliable commercial investments that support economic growth. A stronger commercial market is a good indicator of a recovering and growing economy.”
Commercial members completed a median of eight transactions in 2013, equal to the previous year. Nine percent of commercial members reported not having a transaction in 2013, also the same as 2012. Brokers typically had a greater sales transaction volume than sales agents.
Seventy-six percent of commercial members reported having a leasing transaction; their median transaction leasing volume in 2013 was $431,600. Twenty-nine percent of members cited investment sales as their primary business specialty, making it the most popular area of concentration. Land sales and office leasing were reported as the second and third most popular primary commercial specialties.
Realtors® reported an increase in annual gross income for the fourth year in a row. The study found median annual gross income for 2013 was $96,200, an increase from $90,200 in 2012; that is the highest reported level since 2008.
Commercial members who manage properties typically managed 60,000 total square feet, representing twenty total spaces. Those who manage offices typically managed 25,000 total office square feet, representing eight total offices.
Twenty-eight percent of commercial members were involved in international transactions in 2013. Sixteen percent of commercial members reported an increase in international transactions, while only 1 percent had a decrease. Nearly one-fourth of commercial members reported international business is important to their company.
The typical commercial NAR member has been in real estate for 25 years, in commercial real estate for 15 years and a member of NAR for 18 years. Eighty percent of members reported working at least 40 hours a week, with about half stating that they spend 75 to 100 percent of their time on commercial real estate activity.
Commercial members are predominately male with a median age of 59. However, women are slowly becoming a stronger presence in the industry; 35 percent of those with two or fewer years’ experience are female, up from 33 percent last year, and sales agents have the largest representation of female practitioners with 29 percent.
The 2014 NAR Commercial Member Profile was based on a survey of 2,213 members. Income and transaction data are for 2013, while other data represent member characteristics in 2014. Approximately 70,000 commercial real estate professionals are members of NAR, making it the largest commercial organization in the industry.
The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
By: Jane Dollinger (National Association of REALTORS®)
Click here to view source article.

If the city’s Downtown Albuquerque plans coalesce as hoped, could the real and perceived barriers between the corridor and East Downtown melt away?

Last week, the city announced a slew of plans to revitalize Downtown. Those plans include an attempt to harness the momentum and opportunity already taking place with its EDo neighbors.

All the activity would have big implications for the city’s commercial real estate industry.

Perhaps the biggest opportunity for the city are the plans to transform the old First Baptist Church site at Central Avenue and Broadway Boulevard, which has sat vacant for years. Through a city partnership with UNM and others, the property is set to be purchased so that plans for Innovate ABQ can begin.

Innovate ABQ involves a lot of public-private entities, and its goal is to develop an Innovation District to spur new jobs and economic development. The site is across the railroad tracks, which puts it in the EDo corridor.

If the city can secure a $15 million TIGER (Transportation Investment Generating Economic Recovery) grant, with matching funds, to bring the adjacent pedestrian underpasses at 1st and Central Avenue above ground, it would create a connection point not only for Innovate ABQ, but the Alvarado Transportation Center, Albuquerque Convention Center, and points west to Civic Plaza, which connects with the 4th Street Mall at the core of Route 66 at Central and 4th.

A 4th Street Mall reconstruction is moving forward, too. The project is waiting for final construction-bid approvals, and city officials hope work will begin this summer.

In addition, a plot of city-owned land that was long a parking lot, at the northeast corner of 1st and Central, will soon see bids go out for what the city hopes is a future Entertainment District — another public-private partnership.

That would serve as a further connection and draw between the points between EDo and Downtown.
EDo has a lot going for it already. It has some of the city’s most popular restaurants, such as Farina Pizzeria, Holy Cow, the Artichoke Cafe and Standard Diner, to name a few. Furthermore, it has one of the city’s most unique boutique hotels in Hotel Parq Central, which has one of the best views of the city from the patio of its Apothecary Lounge.
Successful redevelopment has already taken place at the old Albuquerque High School, where lofts are at near capacity and some retail has sprouted. Stuart Rose, the founder of The BioScience Center, is opening his Fat Pipe technology incubator there. There are other amenities that has made EDo one of the more walkable neighborhoods in the city, with salons, barbershops, yoga studios and boutique retailers.
By: Damon Scott (Albuquerque Business First)
Click here to view source article.