Lancaster PA Commercial Real Estate » economic outlook

Increasing sales volume but prices continue to slide.

thiryj — Thu, 14 Jan 2010 16:05:40 +0000

A pair of recent reports presents mixed outlook for 2010

A recent report by CoStar indicates an uptick in sales volume:

“Grubb & Ellis in its annual outlook is predicting an increase in sales volume of 20% to 30% over 2009 levels. However, prices, already down 40% from their peak in October 2007, may decline another 10% to 20% in order to meet buyers’ expectations.” – CoStar – Full report.

Loopnet cites a National Council of Real Estate Investment Fiduciaries’ NCREIF Index that corroborates the outlook of lower values in 2010:

“Property values will continue to fall and investment returns will remain negative through 2010, according to CBRE Econometric Advisors.” LoopNet – Full Report

Local Bank Consolidation – Lending Climate

thiryj — Tue, 29 Dec 2009 15:34:43 +0000

The Patriot News reports parent company of Harrisburg-based Graystone Bank to acquire First Chester County Corporation. This action strengthens the widely held notion that Graystone Bank is currently one of the few local banks looking to do deals. In a recent conversation, a Graystone LO recently remarked to me that “we are here and healthy” and that they are looking for deals that make sense.

These statements highlight what I see as the current commercial lending climate in Lancaster County: You can get financing for your commercial deal if your project pencils (debt coverage ratio greater than 1.2), you have sufficient down (20% or greater) and a track record of previous success.

via Parent company of Harrisburg-based Graystone Bank to acquire First Chester County Corporation | Breaking Midstate News with The Patriot-News -.

Commercial Mortgage Delinquencies Climb

thiryj — Thu, 10 Dec 2009 17:43:51 +0000

Loopnet reports that:

The delinquency rate for commercial mortgages held by four of the five major investor groups surveyed by the Mortgage Bankers Association continued their climb in the third quarter. Only Freddie Mac didn’t see an increase in delinquency. The rate for loans more than 90-days late stayed flat at 0.11%. That compares with 0.09% at the end of the first quarter and 0.01% in the third quarter a year ago. CMBS loans ended the quarter with a 4.06% delinquency

Read Full Story

Commercial Leading Indicator – slight uptick, but still low

thiryj — Tue, 08 Dec 2009 15:47:20 +0000

The Commercial Leading Indicator for Brokerage Activity1 rose 0.9 percent to an index of 102.4 in the third quarter from 101.5 in the second quarter, but is 11.1 percent below a reading of 115.3 in the third quarter of 2008. The index in the second quarter was at the lowest level since the first quarter of 1994; NAR’s track of the commercial leading indicator dates back to 1990.

via Commercial Real Estate Forecast Uncertain.

U-shaped, or double dip – what will the recovery look like?

thiryj — Fri, 04 Dec 2009 15:24:52 +0000

South Central PA economists weigh in on how the economic recovery is likely to proceed. Today’s headline of much lower unemployment is on track for an employment bottom and subsequent recovery in early 2010. Below find and excerpt and link to the full article.

Dye, vice president and senior economist for The PNC Financial Services Group, said the recovery likely would be a gradual “U-shaped recovery,” rather than a sharper “V-shaped” one. Basu, however, noted about one-third of economists are predicting a “double dip,” a second downturn.

via Two economists predict recovery, question endurance – Central Penn Business Journal.