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In both the suburbs and downtown, many users are seeking to capitalize on a generally soft office market and historically low interest rates and are showing a preference toward small, stand-alone buildings. In addition, office investors and developers are seeking to take advantage of aggressive pricing on bank-owned assets throughout West Michigan. |
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The investment market has seen deal velocity slow significantly in the first half of 2008. This is a trend that echoes the nation. Nationally, the first quarter of 2007 saw $100 Billion in investment transactions close, the first quarter of 2008 saw approximately one third of that record volume. The challenges in the investment market are two-fold. First, buyers' and sellers' expectations need to align. Second, a lender must be found to finance the transaction. Local and national lenders continue to be very cautious. As sellers, it is important to consider the changing market when valuing your real estate. However, pricing is still above historic averages, particularly for quality assets with strong occupancy and leasing histories. National buyers continue to eye West Michigan, although much more cautiously. If you are a buyer, there are many opportunities to capitalize on the slower market. Quality products are available and some of the best opportunities in several years have begun to surface. |
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Our Retail Team just returned from Las Vegas for the International Councel of Shopping Centers Convention (ICSC). Dispite the media's hype of a sluggish economy, there was record attendance at with over 75,000 registered attendees, covering over 2 million square feet of floor space in a 3-day period. The consensus of the event this year was that retailers, restaurants, and developers were rolling up their sleeves and getting down to business putting deals together. The overall attitude was very up-beat.
This convention is extremely critical in retail circles. Face-to-face meetings with all the decision makers under one roof is something that is very unique to the retail side of commercial real estate. |
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The second quarter appears to be off to a strong start in the regional industrial marketplace. Our team is seeing a noticeable increase in inquiries, showings, proposals, and offers. We are optimistic that this is the beginning of a positive trend that will bring some healthy balance of supply and demand back into the industrial marketplace. |
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Are electronic signatures binding?
In a global economy it has become increasingly difficult to obtain original signatures on legal documents, including Lease Agreements and Addendums with parties scattered across time zones.
Electronic signatures have become the new “norm” in many cases, but the lingering question has been, “Are electronic signatures legally binding?”
The answer in short is yes, so long as the process is handled correctly. The Electronic Signatures in Global and National Commerce Act (“E-Sign”) was enacted nearly eight years ago as a Federal response to a growing movement to validate the legality of electronic signatures.
The caveat to this Act is that all other elements required as part of a binding contract must be present. As with any legal document, binding contract or agreement, it is always prudent to seek review by your legal counsel.
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Written By: Robert Bach
Senior Vice President
Grubb & Ellis Company
The sale of both new and existing homes appears to be bottoming out at very low levels. Months supply stands at 11.2 for existing homes, the highest in the index’s history, and 10.6 for new homes versus a balanced market of five to six months. From their cyclical peaks, median prices have fallen 11.8 percent for existing homes and 6.3 percent for new homes, though other sources cite declines of as much as 15 percent. Foreclosures have yet to reach a peak, suggesting that the housing market is unlikely to find much traction through the balance of 2008.
Source: U.S. Bureau of Labor Statistics
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Written By: John Kuiper SIOR, CCIM
That may be the most common question I am asked when speaking with manufacturers and investors that have been made aware of opportunities in our market. My answer is simple: "Why not?"
On a national level, Michigan has gained attention for negative reasons: foreclosure rates, the lack of job growth, and a focus on the declining market share of Ford, Chrysler, and GM. While those are real issues, all of us in West Michigan need to remember the Why Not.
Manufacturing is not dead, nor is it all moving to China. Michigan is still - and will continue to be - a great manufacturing state. West Michigan has a fantastic pool of ready, willing, and able employees. And our employees show up for work. In fact, they want to work.
West Michigan is entrepreneurial at heart. The local businesses, most of them privately held, continually seek out ways to maintain their competitiveness, reduce costs, and add value to their clients and customers. Being quick to adapt and willing to change continues to lead to new opportunities. And if a company becomes too slow to react, a couple of entrepreneurs get together and seek out those new opportunities.
We respect each other. We still can do business with a hand shake. People are honorable and will allow others a second chance. After all, this is still a small community.
We are philanthropic. By giving back we provide a better quality of life for all of us. People in West Michigan care for each other and help to make this a great place for our children and our children’s children.
The people in West Michigan have a vision. We have a vision of greatness. This is apparent with such things as the Kalamazoo Promise, charter schools, The VanAndel Institute, the Grand Rapids Art Museum, the JW Marriot, and the growth of Cooley, GVSU, MSU, Western and Davenport!
The Medical Mile in Grand Rapids, has had almost $1 billion worth of new investments in last decade. West Michigan is now on the map and is gaining national attention. With continued efforts, West Michigan will be a destination for medical students, researchers, and surgeons, accomplishing things that had never been contemplated. And these ideas, concepts, and discoveries have the ability to be commercialized - again boosting our manufacturing base.
Why Not? Who wouldn’t want to be a part of this vibrant community? I take many clients for a drive through downtown Grand Rapids. They can feel the enthusiasm I have for West Michigan. Their comments are always the same: “Wow, this place is clean…and there is so much happening here…I had no idea there was this kind of activity in Michigan…” And I agree with them 100%. Why Not!
John Kuiper, SIOR, CCIM, is an Industrial Advisor with Grubb&Ellis|Paramount Commerce. John also serves as President-Elect of the Grand Rapids Commercial Alliance of REALTORS.
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Written By: Randy Bronkema, SIOR, CCIM
Location, location, and location are the three most important elements in choosing a property where a company will conduct its business. A business has a lot to gain in selecting the proper site or building. This decision could make or break your company. But, what about location? What does your businesses need to look for? What qualities make up a good location for your business? How can you find the information required to make a good decision? How will you know when you've found the ideal site?
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Look at more than price alone. Some locations generate higher sales per square foot, command higher rents, or are perceived by customers as superior to a less expensive location. Therefore, the increased success a business could realize would far outweigh the additional investment. Stay focused on the big picture and think of long-term success. |
Some companies have the world to pick from, some have the state, or some only have an area as small as a neighborhood. Although every business has different needs when it comes to location and site selection, there are some general characteristics that are common to all location decisions.
Physical, economic, governmental, and access factors all play a role in selecting a location. The first step in finding a good location is to thoroughly research and analyze all potential properties.
How do you find all of this information? Real estate advisors who specialize in the property a buyer or tenant is seeking are the best single contact for gathering all of the information while retaining your anonymity during the search. If anonymity is not maintained, property prices may be raised to reflect what the seller believes you can pay.
There are a couple of ways to find which properties are currently available. Observation, which means driving around potential cities or neighborhoods and looking for real estate signs, is one method. Reading area classified sections and placing inquiries is also part of this process.
The second way is by using the services of a real estate professional as a buyer or tenant representative; one that is trained in site selection analysis and also is aware of what is available in the market for sale and lease. It is important to choose one who specializes in the type of property requirements the buyer is seeking. If your need is industrial, then your advisor should have extensive industrial real estate experience, and be solely dedicated to industrial property types. Your advisor should be able to minimize risk and maximize value by being able to analyze the financial implications of leases, devising and implementing marketing plans, and using web-based tools, and in-house research teams.
A special designation such as SIOR (Society of Industrial and Office RealtorsÒ) tells you that your Realtor is a knowledgeable and experienced commercial real estate specialist who knows the importance of continuing education to maintain a current understanding of the real estate industry.
After the market has been thoroughly researched and all potential properties have been analyzed, you should compare the highest-rated properties. This will provide a clear picture of the two to three properties on which to focus. From here, you can decide to make offers to purchase or lease, which your advisor can write and present.
In summary, there are several important factors in choosing the site for a business. The factors are all related in some way to location. Which factors are most important depend on the type of business involved.
With an expert’s help, you can determine the best location for your business to prosper.
Randy Bronkema, SIOR, CCIM, has been specializing in the selling, leasing, and site selection of industrial real estate in West Michigan for over twenty years.
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Written By: Christopher Beckering
| Sustainable development has been defined as that which "meets the needs of the present generation without compromising the ability of future generations to meet their own needs." (Source- United Nations General Assembly, the Brundtland Commission). |
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The benefits of sustainable or "green" building to a landlord can include improved marketability and increased return on investment (resulting from reduced building operating expenses and more efficient life-cycle costs). Benefits to tenants in green buildings can be more difficult to quantify, but include improved employee health, comfort, and productivity; including higher retention rates, lower employee turnover, and easier recruiting, in addition to reduced emissions or waste. |
| Chris Beckering is a certified EcoBroker®. He is the first and only commercial broker in Michigan to achieve this coveted designation as of February 2008. |
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Written By: Gary Albrecht
The Grand Rapids market has nearly 113 million square feet of industrial space distributed across five submarkets, (defined by Fulton Street and Division Avenue). The Southeast submarket makes up 44 percent of the entire market and has the highest vacancy rate at 13.6 percent. The Southwest submarket has the second highest percentage of industrial space with an overall market share of 26 percent. The two southern markets make up 70 percent of the total market inventory and account for 85 percent of the total market vacancy. The Downtown, Northeast, and Northwest submarkets make up the remaining 30 percent of the total inventory and 15 percent of the total market vacancy. |
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If you are interested in subscribing to Market Trends contact
Gary Albrecht Research Analyst 616.774.3500
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At Grubb & Ellis|Paramount Commerce, we believe successful retail strategies aren’t based on chance. In today’s fast-paced retail market, no successful real estate strategy is complete without precise, strategic direction - the kind of counsel you can expect from the Retail team at Grubb & Ellis|Paramount Commerce.
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We offer our clients direction based on thorough market research and careful analysis allowing them to minimize legal, financial, and operational risk.
Don’t leave your retail success to chance. For a carefully planned retail strategy, contact the retail specialists at Grubb & Ellis|Paramount Commerce.
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| For further information on Grubb & Ellis|Paramount Commerce, click on links below and you will be directly connected: |
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