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You are here: Home / Archives for Contra Costa Real Estate

January 23, 2018 by Peter Maclennan Leave a Comment

Industrial Real Estate Hottest Sector in 2017 and Hot in 2018

Antioch Industrial Property

Industrial Real Estate Hot in 2017

According to a report, the hottest commercial real estate class is industrial property.

The industrial sector has emerged as the growth leader in commercial real estate, according to a new report by Morningstar, a notion that’s in agreement with the wider consensus about industrial now leading income-generating real estate. As a darling among owners and investors, apartments may still be strong, but the industrial sector is the rising star.

That’s thanks to Amazon and e-commerce as a whole. Industrial logistics space outperformed office, retail, apartment and even light industrial space in terms of supply, demand, occupancy and rent growth in the first half of 2017, noted the report. Read More… on Commercial Property Executive.

The article details that much of the growth is due to Amazon and other e-commerce companies.

As recent sales of industrial properties indicate, the availability of industrial land in core Bay Area markets is not growing.

Industrial Real Estate Stays Hot in 2018

According to research by NREI, industrial real estate and industrial properties should stay hot in 2018. A majority of survey respondents indicated that they expect the industrial market to continue expanding for at least a year. Almost 23% of respondents believe that the growth will last 2 years.

Fewer respondents were concerned about oversupply in the industrial real estate market. Over 80% of respondents indicated that the supply was just right or that there was too little supply. (Too little supply seems to be the trend in the San Francisco Bay Area.)

The experts that responded ranked the West as the top region, followed closely by industrial properties in the South.

Bottom Line:

All signs indicate that industrial leasing and sales will maintain a strong pace in 2018.


Maclennan Investment Group, Inc. offers leasing, investment, and property management services to clients in Contra Costa, Alameda, & Solano Counties. Our primary markets are along the I-680 Corridor from Pleasanton north to Martinez, including Danville, Alamo, Walnut Creek, Pleasant Hill, Concord, Pacheco, and Clayton. And also along Highway 4 from Concord east to Bay Point, Pittsburg, Antioch, Brentwood, Oakley, and surrounding Delta towns.

Please call today to see how we can help you find space for your business or fill up your building with high quality tenants. You can reach us at 925.385.8798.

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Filed Under: Industrial Real Estate, Investment Property, Real Estate Investing Tagged With: Amazon.com Inc, Commercial Real Estate Investing, Industrial Property, Industrial Real Estate, Investment Property

June 13, 2014 by Peter Maclennan Leave a Comment

Update on Concord Naval Weapons Station

Concord Reuse Plan

Layout of the Concord Reuse plan as adopted in February 2010

The Contra Costa Times has an update on the Concord Naval Weapons Station.

In January of 2014 the City of Concord requested a statement of qualification from interested master developers for the massive project in March. They received eight responses and had the responses reviewed by a third-party firm to score the responses. It appears that they have now narrowed the list down to four developers.

The developers are interested in the prospect of developing the weapons station. The proximity to the North Concord/Martinez BART station allows them to build low-density, single-family housing that has access to mass transit.

For more information on the Naval Weapons Reuse Project you can head over to their website www.concordreuseproject.org. To see plans of the proposed development you can view this pdf.

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Filed Under: Bay Area Real Estate News, Contra Costa Real Estate Tagged With: Bay Area, Contra Costa County

August 8, 2013 by Peter Maclennan Leave a Comment

2,100 New Apartment Units in the East Bay

I have mentioned a few times that a number of new apartments are coming online in the near future. Today the SF Business Times confirmed that almost 2,100 units are under construction to be delivered this year.

For existing apartment owners this likely means that they can expect to see vacancy rates creep up especially for units that have not been modernized and that rental growth is likely to slow.

What do you think? How will this affect existing apartment owners?

 

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Filed Under: Bay Area Real Estate News, Contra Costa Real Estate

November 19, 2012 by Peter Maclennan Leave a Comment

Stuck in 2007

I speak with a number of real estate investors that own duplex, triplex, or fourplex properties and they expect to get 2007 pricing for their property, even though it is 2012. They are stuck in 2007. When I tell them that I think their property would sell for a range of value, they are upset that the market won’t pay them more for their property.

For some owners, this is bad news because they bought in 2006 or near the peak of the real estate bubble. When I tell them the current market’s assessment of their property they are underwater on their investment property.

For other owners that bought prior to the real estate bubble, they still have a significant amount of equity in their property. This equity may be earning a very low return when compared with other investment alternatives.

Harmful Thinking

One of my favorite shows is ABC’s Shark Tank. On the show aspiring entrepreneurs and inventors pitch their ideas to a team of wealthy investors or “sharks”. The entrepreneurs have to sell the Sharks on why their idea is going to make money and be a good investment.

On many of the episodes a Shark will tell the aspiring entrepreneur that although he/she likes the person or the investment, he/she cannot invest because they are a disciplined investor. Kevin O’Leary frequently refers to his money as “an army” that he likes to send out making sure that they bring back more than they left with.

Living in the past is detrimental to making wise decisions about the future. Eventually prices may get back to the level of 2006 or 2007. The question is: How long is the investor willing to wait for those prices? How many better investments are you going to miss because you are waiting for the market high to come back?

Thoughts?

What motivates people to hold on to an investment even if it is not generating optimum returns?

 

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Filed Under: Contra Costa Real Estate, Real Estate Investing Tagged With: Investment Property, Real Estate Investment

September 13, 2012 by Peter Maclennan Leave a Comment

Inventory Shortage in Single Family Housing

If you have been attempting to buy a single family home in Contra Costa County as a personal residence or as an investor, you may have noticed that the competition is tough. Homes priced under $350,000 are receiving multiple offers, and some are all cash offers.

For Sale Home Inventory Shortage

Currently, there is an inventory shortage in Contra Costa County. The image below from the August 2012 Report from the Contra Costa Association of Realtors shows the declining supply of homes for sale in Contra Costa County.

Contra Costa Housing Supply

From the chart we can see the downward trend in inventory from the peak in October of 2010. We also see that inventory dropped below 2 months’ supply in February of this year and hasn’t gone above that level.

Causes for the Lack of Inventory

What is causing the lack of inventory?

An article in the Wall St. Journal from September 12, 2012 points to the trend of institutional investors buying foreclosed homes: Firms Flock to Foreclosure Auctions. Firms like Blackrock and Colony Capital have begun buying up large blocks of foreclosed homes at the auction steps in communities across the United States. While private investors generally want a return above 10%, the investment firms are willing to accept lower returns for their institutional investors.

As well, Bloomberg reports that Fannie Mae Sale of Florida Foreclosures Gets 96% of Value. Fannie Mae sold 699 homes in Florida to Pacifica Companies, LLC a San Diego based firm. The homes were valued at $81.5 million and sold for $78.1 million.

Another factor is the number of individuals that are underwater on their mortgage and don’t have the option of selling their home. These home owners would have normally sold and moved up to their next home. However, they don’t have the cash on hand to make a down-payment for the move and the lack of equity in their current home precludes them from selling and moving up.

Buying Real Estate in the Current Environment

So how do you buy a home in the current environment?

  1. Get your financing lined up. It is important to have your down-payment available for your purchase. Also, you need to get a pre-approval letter from your lender. A pre-qualification is not strong enough for most sellers. They want to know that a lender has delved into your finances a little deeper.
  2. Don’t expect to “steal” a property. With the lack of inventory, this is truly a seller’s market. Many properties are receiving multiple offers. Listing agents in the current market are setting a date in the future to review “all offers”. This means that low ball offers will be compared with high price offers at the same time. Which one would you choose?
  3. Write a strong offer based on a reasonable market price. This is part of not expecting to low ball sellers. Your agent should tell you if the property is reasonably priced. A strong offer may be at full price or above asking price. It also might contain a large down payment or a shortened inspection period. A good agent will provide strategies to make your offer more attractive to a seller and competitive to other offers on the table.

In the competitive real estate environment, it is key to have a good real estate agent on your team. If you need help meeting your real estate goals, please feel free to contact me by phone at (925) 385-8798.

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Filed Under: Contra Costa Real Estate, Real Estate Investing Tagged With: Contra Costa County, East Bay, Investment Property, Real Estate Investing

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