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We just recorded a new Teleclass where we outline the Distressed Commercial Asset Life Cycle. You can get a free copy here for the next 2 weeks and then it will change to our latest teleclass and topics change twice a month.

Get yours now: http://www.investortours.com/free_teleclass.php 

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We are all waiting for spring … when all things are born anew!

AND before you can get green shoots like these in the commercial real estate markets … the first step is the market fundamentals have to stabilize. At some point rent and occupancy simply must stop falling and enter the category of “No Change” as the analysts in our industry survey the national markets. Only then can the turnaround … and those little shoots … begin to emerge.

Here’s a sign we may be seeing some stabilization sooner than most pundits had predicted.

Most of the national “experts” reported in the press over the last several months have gone on record predicting it will not be until the 3rd quarter (and most then say “at the earliest”) until we see the Commercial Real Estate Markets recover.

Here is a report showing 16 of 28 major markets in the US where multifamily rents are NO CHANGE in the fourth quarter of 2009. See the report at this link …

Could this be the first sign that some “green shoots” are on the way – might they be curled up under the surface yearning to emerge when the sun comes out all the way? Stay tuned …

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Now a Rubber Chicken is pretty useless … except as a practical Joke. Let’s take a look at the most useless number in Commercial Real Estate. 

The Gross Rent Multiplier – the Rubber Chicken of Commercial Property Value Indicators.

GRM is calculated by dividing the Property’s sales price or value by the Gross Potential Income. 

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Here is another sign of the times with regards to the concept of the “Strategic Default”. If you are underwater on your mortgage it would appear the lawyers are lining up to “help”.

I just ran into this website with it’s “Pay or Go” calculator. http://payorgo.com/

You plug in your numbers on what you owe and what you pay and it will tell you whether you should keep Paying or Go … walk away and trigger your “Strategic Default”

Is this the 2009 property specific version of “ambulance chasing”? I am certain this law firm could help you if you decide to “go” rather than keep paying. And this all begs the question is walking on your mortgage now socially acceptable. You be the judge and as one reader emailed me … “whether it is socially acceptable or not, the question of whether it is ethical remains.”

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In this economy, where many individuals and businesses bought at the peak and are now under water on their loans, is it now Socially Acceptable to walk away from those loans? Are we to the point where a “strategic default” – as this has come to be known – is simply idle water cooler banter amongst investors.

Today Bloomberg announced that Morgan Stanley is doing just that for the second time in 2009. And the Wall Street Journal has had a series of articles on single family home owners and the epidemic of strategic defaults in home loans

More on Morgan Stanley …

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Never Ever Ever … take a property under contract without a quality local Property Manager on your team.

Our latest “hype-free” Commercial Power Hour Teleclass shows you why your Property Manager is the workhorse of your Due Diligence Team in all phases of the process – Market | Financial | Tenant | Physical. You will dramatically increase the risk in your investment without them on board.

Download your copy for FREE here

http://tinyurl.com/yea7lve

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In Commercial Real Estate Price negotiations, a natural response is to try and “meet in the middle”, once an opening price has been established. If I say 10 and you say 20, both sides expect a middle position response, in this case 15, as a “reasonable compromise” to begin to lower the price.

Let me show you a technique I call ”Move the Middle” that will naturally cause your negotiating counterpart to split the difference in your favor and move them in your direction …  toward the number you need.

It begins with a traditional “meet half-way” or “meet in the middle” basis for bargaining. I add a little twist I call “Move the Middle”, that benefits you in any negotiation. This is a simple negotiation technique that provides consistent profitable results for you in any transaction. It has enormous value and it is a tactic you can use again and again when bargaining.

Here’s the technique:

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These dangerous contracts are often presented as if they are “standard”… Not True. You get what you negotiate. The last thing you want is to be locked into a contract with a poorly performing Property Manager… and no easy way out… OUCH.

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Contract Red Flags:

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Happy Thanksgiving to you and your family. Here is my favorite whole berry cranberry sauce recipe – I always get asked to make it … now you can too.

Ingredients: One bag of fresh cranberries, sugar, Port Wine and a couple oranges

• Zest the peel of the oranges with a grater or zesting tool and set aside, then juice the oranges to make half a cup. Add Port to the OJ to make it a full cup of liquid.
• Place the one 1 cup fresh squeezed Orange Juice/Port mix in a saucepan.
• Add 3/4 cup of sugar and bring to a simmer.
• Rinse the cranberries and pick out the brown or soft ones.
• Add the cranberries to the hot OJ & Port and simmer for about 10 minutes. They will gently pop as they cook.
• At the end of ten minutes, remove from the heat, smash lightly with a potato masher so all the berries are at least cracked. Stir in the orange zest and cool.

Serve cool with dinner and goes well on crackers and lots of other things. This recipe can be easily doubled.

Happy Thanksgiving … may we all live in peace and be free from danger.