2022 starting line_canstockphoto97633705 800x530

For the last 2 to 3 years, people have been asking, “When is the next downturn?” “How much longer can this Seller’s Market last?”

Traditionally, the real estate market experiences a downturn every 10 to 12 years, however, at this time, due to the increase in migrations from cities and states with high income and sales taxes, (NY, PA, CA, Washington, D.C) this cycle has been delayed.  Both companies and investors are relocating to South Florida.   No one can say when this will change, but this is the time to take advantage of the market. We usually don’t realize historic change is happening until it’s already has taken place, and by then it’s too late.

Fortunately, real estate shifts rarely happen overnight. We believe that there is still time to take advantage of the seller’s market.  I share with you my thoughts for 2022:

Six to twelve months from now, we will all look back and identify Q2 2021 and the Q3 of 2022 as the point where the market peaked and stabilized.

To be clear, I’m not saying values will crash. But I am certain they will have stabilized and will correct, in late 2022 or 2023 and beyond.

Now, I don’t really think this is a bold prediction, I think we all intuitively know it. We have seen this happen during the Jimmy Carter years with 18%+ interest rates and high inflation, the Days of the RTC and, of course, 2007/2008 when the market crashed, which we saw end in 2010, We are now 12 years since the last recovery.

I think it is important that we ask ourselves, out loud, “What actions are we taking in light of this new reality?”

In my world of real estate sales brokerage, I can think of three big answers to that question:

1) Review your portfolio to identify any properties you may want to sell in the next one to two years. Then call me to explore your options to sell now or refinance and hold. Both are proactive decisions if you make them. Everyone has different circumstances that must be considered. We may miss the peak of values, but we are still at or near the top of the market crest and avoid Meaningful decrease.

2) Review your portfolio and identify any properties that may need to be refinanced, as the rates are still at the lowest they have been and, with the current inflation rate, mortgage rates will only increase.  I can help you with this through Sperry Capital.

3) Consider rent adjustment in your leases. Start putting in annual CPI or floor & ceiling of 3 to 7% increases into your leases. Most landlords are adjusting their new leases and have moved away from fixed rent increases.

Today, my friend, the future is staring us right in the face, telegraphing what is coming next. What will you do with that information?

Let’s schedule an appointment and review your properties to help you determine the right course of actions for your situation.  SperryCGA has offices though out the US and can advise you in multiple markets.  I have been helping real estate investor and owner/users since 1978.

Let us help you maximize the value of your investment.

 

770 n state road 7 1000x600

Ron Osborne, Managing Director/Broker of Sperry CGA-RJ Realty, negotiated the sale of an auto repair facility located at 770 N State Road 7 in Plantation, Florida.

Osborne represented both sides of the transaction, including seller, DOXATO LLC, and Buyer, GCDC 2 LLC, in the transaction. Osborne sourced the buyer from Argentina, an entity he had previously worked with.

The property consists of a 17,000-square-foot site with a 4,408 square foot fully functional auto repair facility with 3 overhead doors with room for 7- 8 lifts. The property was formally used as a transmission shop.

The deal closed December 29, 2021.

The total transaction has a value of $1,509,000, or $342 per square foot, which includes the real estate and chattel mortgage on the equipment.

“The Seller approached a neighboring property owner and offered him the property, who is a current client,” explained Osborne. “Knowing that I am the Automotive Property specialist in the area, he referred the owner to me. Our biggest challenge in the sale was tenant’s right of first refusal on the lease, however it was written that the tenant had to match the offer exactly.  Since our Buyer presented an all-cash offer with proof of funds for the purchase price and a very large deposit, that stipulation became a non-issue.”

The deal represented Osborne’s sixth automotive transaction in Broward County in 2021, with all of the sales or leases transactions closing at the top of the market.

Sperry CGA-RJ Realty will be leasing and managing the property.

“The current tenant will be vacating sometime late January and we should be able to deliver the space first of March,” Osborne said.

Offering rent will be $28.00 NNN.

680 NE 42 St, Deerfield

Ron Osborne, Managing Director/Broker of SperryCGA/RJ Realty, negotiated the sale of an industrial property located at 680 NE 42 Street in Deerfield, Florida.

Osborne represented both sides of the transaction, including the Seller, DAMANI INVESTMENTS, LLC and Buyer, ACHIM INVESTMENT GROUP LLC.

The sale includes an 8,342-square-foot building situated on a 17,437-square-foot lot. The 1970-built building features nine 935-square-foot bays was 100% occupied at the time of the sale.

“We received multiple full-price offers from investors and owner/users and ultimately selected a pre-qualified owner/user and closed the deal in under 45 days from Contract,” commented Osborne. “There are multiple owner/users as well as investors looking for 5,000 to 75,000-square-foot facilities.”

Osborne helped obtain an SBA Loan with full approvals within one week of contract, marking the fourth SBA Loan closing in 2021 that he has assisted with. Osborne also helped the Seller complete his 1031 exchange in NC though the local SperryCGA Affiliate office.

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