Visit Brevitas at ICSC RECon in Las Vegas, May 23-25, 2016

Brevitas is changing the way private transactions are conducted in the commercial space. With over fifteen billion dollars in asset listings, we are the leading online platform dedicated to private investment sales.

Stop by our booth at ICSC REcon and discover firsthand how the Brevitas private marketplace can drive value to your CRE business by increasing your listing’s exposure to qualified investors, giving you access to thousands of exclusive investment opportunities and growing your network within our vetted pool of members. Our team will be onsite showcasing live demos of the product, and  guiding new users through the sites’ many useful features.

Premium Membership is absolutely free for anyone who signs up before January 2017 and can be done onsite at the show, or by visiting https://brevitas.com/apply/

Find us Here:

Marketplace Mall is located in the North Hall of Las Vegas Convention Center, easily accessible where Paradise Rd meets Convention Center Drive.  You can easily locate the Brevitas Booth #N1166 by clicking here and selecting “Add to My Show” in the far right hand column of the page.

 

Off Market Deal Book | February 2016

The Brevitas Off Market Deal Book provides you with a curated, varied selection of recent off market commercial real estate transactions.

  • Ping An set to invest “billions” through new US real estate arm.
    “In building up this business, our focus is very much to do things off-market and quietly, based on relationships,” Singer noted. “To do it in a way where we’re very much like a U.S. investor, as opposed to a foreign investor.”
  • LA developer Hudson Pacific sells office to YouTube for $215M
    West L.A. real estate investment trust Hudson Pacific Properties is seeing strong returns up north. The firm sold the Bayhill Office Center at 999-1111 Bayhill Drive in San Bruno to YouTube for $215 million, or $388 per square foot, in an all-cash, off-market sale that closed today.
  • Vista Industrial Buildings Get New Owners.
    Brokers said the off-market transaction combined two existing office condominiums, and the buyer will be expanding from its current operations in the 1070 La Mirada Court building. The acquired property includes an open floor plan and a warehouse.
  • San Jose’s Eastridge Mall sold in retail megadeal backed by Goldman Sachs.
    The group backed by Goldman Sachs — Pacific Retail Partners and Silverpeak Real Estate Partners — acquired the majority of the 1.4 million square foot center on San Jose’s east side, they announced on Friday. The seller was General Growth Properties. An exact price was not disclosed, but the buyers said the acquisition was worth “more than $200 million” and was completed off-market.
  • “We are constantly looking for off-market opportunities,” deals that aren’t widely marketed, said Fred Hamm
    Investors who’ve spent more than $10 million to redo downtown Dallas’ Plaza of the Americas hope that the office tower and retail complex will now attract a buyer. The Plaza of the Americas and the nearby Ross Tower are the two biggest properties for sale this year in North Texas.
  • Siegel Group Nevada buys Rodeway Inn for $6.1M.
    The Siegel Group Nevada bought the Rodeway Inn Convention Center Hotel at 220 Convention Center Drive for $6.1 million. The purchase was an off-market deal that closed in 30 days, the company said.

4 Ways to Simplify the Real Estate Disposition Process

For a variety of reasons, owners and developers often find themselves in need of a quick and uncomplicated disposition for commercial property. This can be a tall order, but there are ways to make the process simpler and hasten its completion. Below we discuss some considerations that will be involved in getting the best price for a property while still meeting any existing time constraints.

Debt

If the property has existing debt, the seller should consider whether it can be assumed. If not, it may be possible to restructure the debt or to pay it off at a discount before the property is sold.

Best use of the property

When marketing this property, the seller should think about whether the current use being made of the property is its best (most profitable) possible use. If not, it might make sense to make some changes or even redevelop the property to raise its value before selling.

Marketing

An important factor in how well a property sells is how many people are reached with the news that it’s available. Technology makes it easy to make contact with thousands of potential buyers –through listing sites as well as through professional networks and social media.

Real estate brokers now provide extensive property information online, and customers are coming to expect it. Listing a property for disposition should involve as much in depth information as possible, to assist buyers in determining whether it’s for them. Sites include market information and trends to provide a clear picture of where the listing fits.  Platforms have recently developed that provide private listings for registered users, so even so-called “off-market” deals are now online.

Vetting buyers

Even if thousands of buyers have access to information on the property, its disposition is only helped if they are qualified. Verifying the ability of prospective buyers to complete the deal is critical, and can often consume a great deal of time which could lead to a dead end. Hiring a professional can help make this process more accurate, as they will use established industry connections to gather the necessary information on buyers quickly.

Working with a pool of buyers that has already been checked and verified can cut weeks off of the time required for disposition, and that’s possible on some investment platforms. In order to participate in deals on Brevitas, for example, buyers create a profile and provide proof of funds along with a government ID.

With that information covered at the outset, deals can move forward more quickly.

Commercial property disposition can be the solution to a range of difficulties, or just a step whose time has come. Either way, simplifying the process can save the seller considerable time, money, and aggravation. CRE is making use of technology to facilitate this type of activity, making the whole process more transparent and less time-consuming. Knowing about the tools that are out there can give buyers a tremendous advantage and smooth the road to a successful outcome.

4 Multi-Family Trends Likely to Continue in 2016

It’s been a good year for the multi-family market in the U.S., and some favorable trends we’ve seen in recent months will likely continue as we move further into 2016. Experts are saying that high demand will continue to keep vacancies low, and the steady climb in rents will also stay with us, although some markets will be stronger there than others. Here’s a look at the 4 big multi-family trends that have plenty of momentum to carry them through the coming year.

#1: Demand from the millennials

Perhaps the factor with the most impact on the multi-family market has been the rise of the millennial generation to take its place as the most numerous demographic in the U.S.  This group, born between 1980 and 2000, now outnumbers the baby boomers, and makes up more than one-third of the country’s total population. What does that have to do with multi-family properties? Plenty.

As a group, millennials are showing a marked preference for renting over home ownership. Part of this is related to the challenging economic climate, as well as the student loan debt that many in this age group are carrying. These factors, combined with stricter mortgage loan policies, lead millennials to postpone buying a home. In fact, the rate of home ownership for Americans 35 and younger is at a historically low point: just over 36%.

This demographic is also fond of the flexibility and convenience of renting. The need to relocate may arise, and many millennials would prefer to avoid the task of selling a home in order to move. They also appreciate the perks that come with apartment living, like clubhouses, pools, gyms, and other amenities. Millennials favor urban locations fueling the trend toward living and working in urban centers, as opposed to less densely populated suburbs.

#2: New Multi-Family development

As demand holds steady, the market responds with new units, and despite the fact that construction is brisk, the inventory is still not meeting demand in most markets. The cities where increased inventory could possibly slow rent growth in 2016 include Charlotte, Albuquerque, and Los Angeles.

The most active markets for new Multi-family development have been in Phoenix, Dallas, Miami, Atlanta, and Charlotte. This will likely shift in 2016, with those places nearing optimum inventory dropping off while others, like South Florida, Seattle, and suburban Atlanta, surge ahead.

#3: Rising rents

In 2014, rents grew at a rate of 5.9% nationwide, and this year there were increases of as much as 9% in some areas of the U.S. This was especially true in secondary markets like Denver, San Francisco, and Portland. The weakest growth is expected in Washington DC. Still, the overall demand for units continues high in most markets, so the outlook is for continued rent growth going forward.

#4: Growth follows tech jobs

If the experts are right, the demand for new and existing multi-family units will be highest in the places where strong job growth is attracting new residents. This seems logical, and the type of jobs matters. Growth in well-paid jobs pulls in new residents and potential multi-family tenants.

Moving into 2016, the employment sector with the highest growth will continue to be in the technology fields. San Francisco, Seattle, and places like Denver and Austin will continue to attract a substantial number of well-paid workers in the tech sector who are likely to choose multi-family housing. Raleigh, NC’s Research Triangle is another area of strong technology job growth as is Houston, which remains one of the country’s fastest-growing cities, and is becoming a hub for healthcare and related technology.

4 Traditional Real Estate Deal-Vetting Strategies That Still Win in a Digital World

CRE is a certainly brave new world, thanks to technology. Lets look at some early due diligence strategies used to vet deals. We can sign contracts and other critical documents without a pen, and then send them across the country instantly. We can look at a 3D model of a building we’ve never visited, and then see what the space might look like with specific changes in design.

While technology has radically changed many aspects of CRE, it isn’t likely to eliminate the need for due diligence. That time-honored practice that can’t be neglected, due diligence covers a laundry list of checks and verifications a buyer should complete before agreeing to the purchase of any property. It’s just as important as ever, and some of the strategies we used before technology became part of the business still work as well as ever. In fact, with our digital tools, due diligence can be more thorough and faster than it’s traditionally been.

Start early

Due diligence really begins long before negotiations start. There are many steps that can be taken using publicly available information to determine whether a given property meets one’s needs and standards. This preliminary due diligence may involve visits to the property and discussions with trusted professionals, as well as reading up on the area’s growth, demographics, and other pertinent information.

Due diligence can take months to complete, and is usually written into an agreement with the seller. Once that’s been made, due diligence kicks into high gear, but there is significant work to do even earlier in the process..

Explore your options

Real estate investment is becoming more accessible to more investors, thanks to revision of the JOBS Act just this past year. This has led to the growing use of crowdfunding sites in real estate, to bring buyers and sellers together online. Investment through crowdfunding platforms is substantially more efficient and this approach provides individual investors with a much larger selection of potential properties, all over the country.

There are over 80 crowdfunding sites in the U.S. that are dedicated specifically to commercial real estate, and the best provide significant assistance with the due diligence process. This can represent considerable cost savings for the investor, in terms of fees, and make due diligence a bit less onerous as well.

Review critical documents

A big part of due diligence has always been collecting documents that give an accurate picture of the property’s history and status. This is still the case, but again, technology makes the process a bit less painful in many cases.

Finding out about the current use of the property is a good start. Better crowdfunding sites offer this information with their offerings, to help investors select deals.

Whether they’re available from an investment platform or have to be ferreted out in various offices and agencies, the documents below should be secured before a deal is finalized:

  1. Information on current tenants and lease terms
  2. Service contracts
  3. The deed to the property
  4. Zoning documents
  5. Land and improvement surveys
  6. Copies of any property bills
  7. Notice of any pending legal action
  8. Any inspections or environmental assessments
  9. Special assessments or taxes
  10. Construction plans

Check the seller

In any business deal, it’s important to know whom you’re dealing with. Due diligence must include some background information on the seller or developer: What has their performance been like? What sort of properties have they handled in the past? If this is not a person you’ll like doing business with, move on. There are too many great sellers out there who will be a pleasure to work with.

All of these factors are the same ones we’ve been concerned with since well before the Internet came along, and they are still relevant today. The strategies we’ve used to vet a potential deal haven’t changed; only the approach we take to employing them.

3 Ways to Find the Best Off-Market Commercial Real Estate Deals

Finding off-market commercial real estate deals has always been complicated. These are deals that are not advertised, for reasons including:

  • the desire to appeal to buyers who don’t want to compete with the open market.
  • buyers and sellers prefer to keep the transaction private to prevent speculation as to why they are buying or disposing of an asset.
  • sellers have a particular price in mind for which they are willing to wait, and properties that spend an extensive amount of time on the market can lose value.

These deals are generally high-dollar properties that are not listed on any publicly accessible source. It has traditionally been very difficult for any but the very well–connected to even get access to the listings, let alone contact the seller.

Once a property has been identified, there is still a rather lengthy verification process, which can involve signing a confidentiality agreement, followed by the requisite due diligence on the property. Buyers are required to prove their identity and ability to pay. Many of these documents pass through attorneys and other services, adding more time to the process.

Advertising your interest via networking

The first method to try whenever you need information is to consult your professional network. Depending on that group’s makeup, they may be able to point you to some great off-market properties.

Contact people who might have access to that kind of information, and put the word out that you’re interested, using social media. You can even put a line below your email signature stating your interest. It just needs to be seen by the right person at the right time to get results, and it certainly won’t cost you a thing.

Online research

You won’t find off-market properties with a Google search, but the Internet is nevertheless a valuable tool for this job. In just the last couple of years, technology has been developing specifically serving the CRE industry.

Real estate crowdfunding is a rapidly growing area in online transactions, with sites like FundRise and RealtyMogul managing thousands of listings, and connecting buyers and sellers from around the country. This approach is changing CRE investment by allowing more buyers access to more deals than was possible before.

Still, the deals those sites provide do not include the elusive off-market properties. This required the creation of a different kind of site, one that can provide sellers with privacy as well as help buyers to qualify. This is, in effect, a private marketplace for real estate. Brevitas, for example, verifies both buyers and sellers who register with the site, so that process is already done before a deal is even considered.

This helps sellers feel confident about the privacy and security of doing an off-market deal online. The site offers private listings from the U.S. and international markets, and then provides a document lockbox to facilitate sharing and provide access –to those who are authorized.  The site lists billions of dollars in assets.

Hire an informed broker

Another way to get access to off-market commercial properties is to work with a broker that specializes in them.   A professional will have a wide industry network, and will be privy to information on private sales. Particularly for buyers just entering the market, a broker can be invaluable for identifying appropriate off-market properties and navigating the negotiation process. All of the major brokerages in the US have access to off-market listings and can help uncover opportunities for you.

While finding off-market commercial deals is still more complex than basing your search on public listings, it can often yield excellent properties and sellers willing to negotiate. Without a doubt, they’re getting easier to find, thanks to platforms that protect privacy while also making the whole process more efficient.

3 Considerations to Make Before Investing in International CRE

Opportunities abound in international real estate. Twenty percent of the deals made on CRE in the U.S. currently involve foreign capital, and American investors are also taking a closer look at investing overseas.

Investing in properties internationally necessarily involves considerations that domestic investment does not. In addition to customary concerns, like property history, financing, and market trends, international investors must consider conditions and laws in the country where the deal is located.

Consideration #1: Economic Stability

Before considering specific properties in a given location, international investors should consider the overall state of the local economy. Any international CRE investment comes with risks as well as rewards, but investing in an area with unstable economic conditions raises risk considerably. It’s essential to get an accurate picture of local conditions before getting into an overseas market, and to understand how the business is conducted there.

Part of the reason that foreign investment in U.S. CRE has been booming in recent years is the stability of the economy and its steady recovery from the financial crisis of 2008. This is attracting investors in droves –particularly from Canada, China, and Australia- to U.S. properties, with the most activity seen in “gateway” cities like New York, Washington DC, Los Angeles. As those markets become increasingly competitive, we’re seeing more investors taking a look at the secondary markets as well.

Growth has been less robust in other markets, but some areas that seem to be gaining speed and attracting investors from the U.S. include Asian markets such as China and Japan. It’s important to understand differences in the way CRE business is conducted there before entering the market. For example, in Japan, large brokerage firms that are related to the large real estate companies or trust banks often manage midscale and larger investment proposals. There, brokers can represent both sellers and buyers and may bill both parties for agency processing fees. Investors must find a balance between what is required to comply with global investment standards and what’s required to meet customary Japanese market practices. This idea applies wherever the potential investment is located.

Consideration #2: Tax Requirements

Even the sweetest CRE deal can be unprofitable if the local tax law is not favorable. Recent changes to FIRPTA have helped ease the tax burden on foreign investors in the U.S., and there are many tax advantages for U.S. investors participating in the international market.

While property taxes can be the single biggest carrying cost for U.S. real estate, many countries impose very low property taxes (France, Ecuador, Uruguay, and Colombia, for example) or no property taxes at all (Croatia and New Zealand). Some of these same countries impose no capital gains tax on real estate earnings, including Croatia and New Zealand. Other nations with this policy include Nicaragua, Belize, and Argentina. On the other hand, CRE profit distributions in Japan are subject to a 20.42% withholding income tax, although this may be reduced under certain income tax treaties with Japan.

Consideration #3: Management

As with any investment, international real estate should be approached with a solid plan, including an exit strategy. A full understanding of the investor’s role and obligations regarding management of the property is essential before moving forward. Details about the property developer, like do they have full title to the property in question, and is that guaranteed in the contract? How do they handle closings and financing details? What is their background and reputation?

Checking out details like this can be time-consuming, even for domestic properties, but it’s a critical step. Relying on professionals who make it their business to fully vet CRE deals can save time and money. At Brevitas, we offer our clients exclusive access to solid international deals as well as the expertise to navigate overseas transactions smoothly.

4 Ways Technology Makes International Property Investment Easier

In the past, no one in their right mind would have considered making a major international property investment without personally inspecting the site and meeting personally with the seller. This made investing in foreign properties difficult. International real estate investment was once reserved for highly connected entities with deep pockets. Smaller investors and those just entering the international arena didn’t have access to the most attractive deals, and the complexities of investing solo kept many out of the game.

However, over the last decade CRE has increasingly taken advantage of digital tools and platforms that remove those barriers. Technology is making it easier to make connections and identify opportunities in international real estate investment, in several ways.

#1: Access

Digital tools allow us to explore properties virtually, interact with professionals, and verify critical information more quickly. We have access to a tremendous amount of information, and various platforms specialize in aggregating and presenting information on market conditions, development, and demographics that contribute to sound decision making when it comes to investing locally or around the world.

#2: Partnerships and Services

Working through traditional channels required the ability to make contacts in the target market through referrals or associates, and for the most part these were unavailable for foreign properties. Through investment platforms, the players in real estate deals can connect, and investors can verify the credentials, history, and reputation of brokers, developers, and other key partners in the investment process, no matter what the geographic separation.

At Brevitas our sellers are all verified, our opportunities vetted to ensure that our users don’t waste time on low-quality deals. We have the international connections you need to be confident in participating in deals around the globe.

#3: Regional Differences

Foreign investment comes with its own set of unique challenges. Understanding the economic situation in an investment’s location is part of the vetting process. Tax considerations, social issues, and local customs for investment play a large part in the potential profitability of a deal, and having access to this information digitally is just the start.

Using “big data” to construct a complete picture of conditions and markets is becoming a common practice in real estate, and investors benefit tremendously from access to this information. This facilitates transactions and makes the entire process much more efficient and transparent.

#4: Investment Options

The use of technology has expanded the options available to real estate investors. Crowdfunding platforms for CRE are big news, providing smaller companies and individual investors with the same opportunities available to REITs, in many cases. Certainly we have access to more and better opportunities than ever before, thanks to these digital tools.

Our goal at Brevitas is to distill that sea of deals down to the most select, solid, and sound investment opportunities available on the world market. We provide our clients with all of the essential information on these high-quality listings, and we match investments to their specified criteria.

Digital tools are only as good as their content. CRE is still all about connections, trust, and experience. The best technology helps to create those connections and eliminate irrelevant information for confident decision-making.