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GREEN OFFICE AND INDUSTRIAL REITS SHOWING PROMISE

December 23, 2009 on 12:43 am | In Fascinating Office Real Estate Information, Green, Investment Opportunities, Lights Camera Transaction, Office Fodder, PROPERTY MAINTENANCE, Solutions, Statistics, Trends, Uncategorized, Winning Properties, all |

GREEN OFFICE AND INDUSTRIAL REITS SHOWING PROMISE

By Jodi Summers

Office and industrial REITs expect to remain tightly focused for the balance of the year –evaluating the damage to occupancy and rents twisted by current economic conditions.Expect REITs to be greening and negotiating sexier leases mitigate potential damage.

Buildings are responsible for 40% of emissions, and commercial sectors such as industrial and office are greening to cut costs and attract hipper clients.

Taking such savvy acts, coupled with the 2^nd + 3^rd quarter strengthening of the economy have motivated market observers to observe that the publicly traded REIT market at bottom or near bottom.

A recent CBRE Investors report noted that “the bottom of the capital market cycle may be close,” with pricing metrics on U.S. commercial real estate starting to look attractive again to buyers.

“Much of the recent negative press about commercial real estate reflects the experiences of distressed owners,” CBRE noted in their report. “However, from

prospective buyers’ perspectives, many pricing indicators look historically favorable,” based on the current widening spread between aappraised-value cap rates and risk-free 10-year U.S. Treasury bonds.

“Just as REITs led the private markets in 2007 and 2008, it is probable that the recent share-price recovery is an early indicator that a trough in private markets is coming soon.”

Energy saving upgrades such as timed lighting + cooling, white roofs and thin solar films to cover the windows of office buildings are cutting back on cooling costs and increasing user comfort.

CoStar’s office and industrial market report stated that average sale prices, while down significantly from their 2007 peaks, are at or close to their historical averages. Cap rates have expanded sharply during the same period but are also in line with historic averages.

REITs comprise just 10% of the commercial real estate market, but wield significance as a bellwether for future commercial real estate conditions.

http://www.costar.com/News/Article.aspx?id=6A1CBF26B572D3A957377280529227C0&ref=100&iid=143&cid=383F14EEE265B182474DA2442BACBBBF

http://www.socalofficerealestateblog.com/?p=405

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Global purchasing of green building materials–cement, insulation and wood products- will grow to $571 billion by 2013 from $455.3 billion in 2008, suggests a study by Allied Business Intelligence Research of New York. “Innovation, particularly in wood and insulation, is a key driver behind the growth of green building products,” suggests Larry Fisher, research director of ABI Research’s “next generation” practice.

http://www.purchasing.com/article/439362-Buying_of_green_building_products_to_increase.php

Comment by Tom Stundza — December 24, 2009 #
Green Street Advisors is the preeminent independent research, trading, and consulting firm concentrating on Real Estate Investment Trusts (REITs) and other publicly traded real estate companies.

Comment by Green Street Advisors — December 26, 2009 #
Colony Financial Inc., which last September raised $284.6 million from the sale of common shares, is back at the till looking to raise another $287.5 million.

The Los Angeles mortgage REIT has so far invested, or committed to invest $189 million, or 69% of what it had initially raised. In a regulatory filing, it said it thought “there are abundant opportunities among our target assets that currently present attractive risk-return profiles.” And with its initial kitty nearly depleted, it figured it would try to raise additional cash.

The REIT’s shares were priced at $20 at their initial public offering in September. They were trading at $20.82 today. The company also had declared a 7 cents/share dividend for the fourth quarter.

In declaring the dividend, Richard Saltzman, chief executive and president of Colony Financial, said, “We are enthusiastic about our initial investment activity and the pace and quality of the deals we’re seeing.”

Comment by CRE News — January 21, 2010 #
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Trackback by west side industrial supply — March 7, 2010 #
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Comment by Debt Settlement — April 23, 2010 #