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Newsletter_Second Quarter 2010

Newsletter_Second Quarter 2010

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Published by David Bodamer
Lee & Associates’ Investment Services Group's second quarter national survey of private real estate investors.
Lee & Associates’ Investment Services Group's second quarter national survey of private real estate investors.

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Published by: David Bodamer on Jul 20, 2010
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07/22/2010

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Te Lee & Associates Investment Services Group invited thousands o itsclients to complete a short online survey consisting o eight key questionsacing private real estate investors. Te respondents included high-net- worth individuals, partnerships and other groups specializing in commer-cial real estate deals valued in the range o $2 million to $20 million. Hereare the results.
1. Buying Commercial Property:
As the economic environment contin-ues to plod along, the number o investors that have not purchased acommercial property in over one year increased to 76%, which is a 4%increase over the number last quarter. However, investors that closedon transactions within the last our months INCREASED by over14%. ruly a good sign. Te remaining responses were pretty even as you can see in the graph. 
 2. Show Me the Money:
Almost one-hal o all transactions that closed were $5 Million Dollars and below. 72% o the deals were under $10Million Dollars. Tis represents the demand by Private Investors totake advantage o the marketplace and lack o activity by institutionalinvestors in their “lower range” in acquisitions o well located assets.Tere was a huge decrease, 57%, in properties valued above $10 MillionDollars that sold this last quarter.
3. Financing:
Tere was a 20% drop in Lender nanced property romthe last quarter, although a little over one-hal o all transactions, 52%, were lender nanced. All cash sales increased by 45%, with 37.9% o the reported transactions being all cash. Tere were some assumableloans that accounted or closing 5.7% o all the sales last quarter.
4. Safe Harbor:
Te condence in the stock market has rebounded some- what but the overwhelming place or private investors to place undsis still in commercial real estate (38.9%) and short term cash (28.9%).Tis is a drop o approximately 7% rom last quarter, but still shows thecondence that investors have in commercial real estate, which stayedat the same 39% rate. Tis nding is still signicant because privateinvestors typically rely on leverage to a greater degree than institutionalinvestors and are not as adverse to risk.
5. How Long Will Tis Last:
Finally! Some optimism in the commer-cial real estate market. Last quarter, 82% o the respondents did notthink the market had started to strengthen yet. Tis past quarter, thatnumber went down to 63%, a reduction o 30%! For the rst time intwo years, over one-hal o the respondents believe the market will bestrengthening in less than 18 months. About one ourth were still pes-simistic that we still have over 24 months beore the market shows signso getting stronger.
Tis document has been prepared or general inormational purposes only and is not intended as specic advice or recommendations. Te inormation presented is a summary o the personal opinions o a select groupo participants and these can be no assurance that these participants reect a representative sample o the overall market. Any reliance upon the inormation provided herein is solely and exclusively at your own risk.
J. Mark Larson
Vice Chairman
Phone: 213.623.2022
Mark.Larson@lee-associates.com
Investment Services Group
515 S. Figueroa Street, Suite 1600Los Angeles, California 90071
www.lee-associates.com
For additional information please contact:
StocksBondsCommercial Real EstateMutual FundsShort term cashOther
4. What type o investments would you mostavor today?
SECOND QUARTER 2010
1-4 Months 1-4 Months4-6 Months 4-6 Months7-9 Months 7-9 Months8-12Months 8-12MonthsOver 1 Year Over 1 Year
1. How long has it been since you last
 purchased
 a commercial property?
Below $5 Million$5 Million - $10 Million$10 Million - $20 MillionOver $25 Million
2. What was the value o the transaction?
 All Cash Assumable FinancingLender FinancingSeller Financing
3. Te property was purchased on which basis?

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