Certified Green Broker Program Featured in the DJC

Portland is known as one of the greenest cities in the country, and tenants and owners around the area are increasingly aware of the environmental benefits and savings that can come with green building. So how do they find commercial real estate brokers who are well versed and educated in all aspects of green leasing and sales?

Yesterday an article in the Daily Journal of Commerce examined the Certified Green Broker program, developed by the Commercial Brokers Association of Seattle and the Cascadia Green Building Council that was launched in 2008. Certified Green Brokers complete a 30-hour online course and must pass a comprehensive exam. Course topics include the business case for greening commercial buildings, energy use, green materials, and indoor environmental quality.

Two of NAI NBS' brokers, MaryKay West, an investment specialist, and Charlie Floberg, who specializes in office leasing and sales, recently achieved the Certified Green Broker designation.

While certifications like LEED can be useful for commercial real estate brokers, "it’s difficult to find continuing education offerings that are relevant to commercial practitioners," West said. The Certified Green Broker program is attractive because it is created specifically for brokers and the unique issues they face, like drawing up a green lease.

“Many office tenants, especially large office users, are interested in at least some types of green features,” Floberg said. “It’s important for brokers to know the benefits of green building and effectively communicate them to clients.”

DuCote Joins NAI NBS as Senior Property Manager

Christina DuCoté, an experienced property manager who has managed a diverse portfolio of Class A commercial office buildings in the San Diego area, has joined NAI Norris, Beggs & Simpson as a Senior Property Manager.

Christina has more than 12 years of experience as a property manager. She was previously a Senior Property Manager with The Muller Company in San Diego, where she managed more than a million square feet at one time. She won The Office Building of the Year Award (TOBY) in 2008. Issued by the Buildings Owners and Managers Association (BOMA) of San Diego, the award recognizes quality in office buildings and rewards excellence in office building management.

Christina holds a bachelor of arts in economics from San Diego State University. She is a Real Property Administrator (RPA) and Certified Property Manager (CPM), both prestigious property management designations.

CAR Food/Funds Drive for Oregon Food Bank

Last week, the Commercial Association of Realtors (CAR) of Oregon/SW Washington sponsored its second annual brokerage house food and fund drive competition benefiting the Oregon Food Bank. Together, the brokerage houses donated the equivalent of 14,543 pounds of food! CAR members also volunteered at the Oregon Food Bank on Friday, sorting and packing enough food for 376 meals.

And the winner of the competition was (drumroll please . . . ): NAI Norris, Beggs & Simpson! The money and food we donated equaled 124 boxes of food. We also had an internal competition to encourage donations, and our property managers especially stepped up and gave generously.

Though the competition was fun, the real goal of this project is to give as much as possible to the Oregon Food Bank, which is the hub of a network of 935 hunger-relief agencies throughout Oregon and Southwest Washington.

The Oregon Food Bank is a busy organization in good times, but the recession has been especially tough on Oregonians. From 2008-2009, distribution of emergency food boxes increased more than 14 percent from the previous year, to a historic high of 897,000.

The number of people per month who ate meals from an emergency food box jumped from an average of 200,000 per month in 2007-08 to 240,000 per month in 2008-09.

Please consider supporting the food bank in your area!

Is Commercial Real Estate the Next Storm?

Has the commercial real estate market reached bottom? Or do we have yet to see the worst? This is the question Denis O'Neill, an NAI NBS broker who specializes in the sale of retail properties and land, addresses in a column in today's Daily Journal of Commerce.

Here's an excerpt:

Just when it appears we finally have some good economic news, many investors wonder if another financial storm is brewing. The residential market, if not at the bottom, appears close to it. Though the number of residential foreclosures and loans 90 days past due are still rising in 2010, and unemployment is holding steady, few experts see significant additional drops in residential values on the horizon.

So is commercial real estate the next shoe to drop?

Of the $3.4 trillion in commercial debt outstanding, a congressional oversight panel in February estimated that $1.4 trillion will reach maturity between now and 2014; up to 50 percent is held by local banks. Residential defaults led the way, particularly development loans. With plummeting values and no income stream, these loans were the first to be turned back to lenders. Banks’ problem loans are near-term and dwarf the $380 billion of commercial mortgage-backed securities debt that matures from 2015 to 2017. Furthermore, the vast majority of bank exposure to these securities is held by large banks. The big banks have demonstrated the ability to both raise equity and generate profits.

Click here for the full article.

New Report Says CRE Industry is Leveling Off

A recent survey of senior real estate executives suggests that the commercial real estate market is leveling off, but uncertainty remains about how the recovery will play out.

The Real Estate Roundtable’s quarterly “Sentiment Survey” for Second Quarter 2010 was released this week, and provided some hope that commercial real estate has reached bottom. It also said more capital is available, but is limited by markets and property types.

Our friends at NAI Global posted this summary:

Of the 100+ senior real estate executives participating in the Q2 survey, 82% characterized market conditions today as better than a year ago (up from 73% in Q1), although only 17% said conditions are “much better.” The “Current Conditions” index hit a low point of 17 in Q4 2008 (during the near-collapse of U.S. financial markets); rose to 56 in the final months of 2009; and now stands at 74.

“Clearly, the sense of gloom that prevailed a year ago has eased, property values no longer seem to be in a freefall, and market participants are feeling more confident,” said Roundtable President and CEO Jeffrey DeBoer. “But, while sentiment is up, that’s not to say things are ‘good.’ Refinancing remains difficult for many and defaults are still rising, which means more pain ahead.”

In a sign that values may be leveling off, only 28% of those polled perceived asset prices today as lower than they were a year ago, compared with 57% in the previous quarter. Correspondingly, 46% said valuations today are better than a year ago, compared with only 22% in Q1. Looking ahead, 56% expect valuations to be “somewhat higher” a year from now and 35% expect them to remain “about the same,” compared to 42% and 35%, respectively, in the previous survey.

In another important metric, the Q2 survey shows “signs of life” in the debt and capital markets, although numerous respondents qualified their statements by saying improved availability is limited to certain parts of the market or types of properties (e.g., with positive cash flows). Of the 65% who said debt capital is more available today than one year ago, 27% characterized availability as “much better.” By contrast, only 19% of Q1 survey participants felt conditions were “much better” than a year earlier.

On the equity side, 76% said availability is better than one year ago (with 26% characterizing it as “much better”). However, the number of respondents predicting conditions will be better “one year from today” declined from 75% in Q1 to 66% in Q2, with a corresponding increase in the number who expect equity availability to remain “about the same.”

What do you think? Is your market seeing signs of life?

Overall Portland Multifamily Vacancy Down in First Quarter; NAI NBS Adds New Properties to Report

Multifamily vacancy decreased more than half a percentage point to 4.82%. Downtown, however, saw a significant increase in vacancy. This increase resulted in the addition of new product; we added ten properties totaling more than 2,100 units to the report this quarter.

Our report tracks buildings of 100 units and above in the metro area; we consider smaller buildings in some submarkets if they lack many 100+ unit properties. This quarter we added the majority of downtown units that have come to market in the past 24 months, excluding three properties that are under construction or have very recently delivered: the Broadstone Enso, the Matisse, and Indigo 12 West.

With the additions to the report, downtown vacancy rose 5 percentage points to 10.15% and vacancy in new units came in at over 15%. The new units have impacted existing and historic downtown apartments by pushing down effective rents on existing units and creating a more competitive environment. Concessions like free rent and parking are thus being offered on new and seasoned units, and marketing has become considerably more aggressive. If the economy continues to recover, the downtown market could begin to stabilize by the end of 2010.

Market Trends
Apartment managers and investors report seeing a significant uptick in tenant traffic in the latter part of the quarter. This is a good sign but doesn’t necessarily indicate a recovery, which is contingent on two to three quarters of increased tenant traffic, a reduction in vacancy and increasing rental rates. The suburban markets have seen good absorption of new product, since there has definitely not been an oversupply, and submarkets like the Sunset Corridor, East County and the close-in eastside are truly tightening up.

The multifamily market is heavily dependent on the state of the local and national economy, and especially on the fragile job market. Considerable improvement in the job market should be reflected in quarter-over-quarter improvement in occupancy and rental rates. The bright spots locally are that companies like FedEx, Boeing, and Genentech continue to invest in the area. And despite challenges, Portland continues to grow. U-Haul pegged Portland’s growth rate at 10.16% (No. 3 in the country) for 2009, meaning the number of families renting U-Hauls to move to Portland was 10.16% higher than the number of families renting trucks to leave.