PRIVATE CLIENT INVESTMENT REPORT

Transcription

1 PRIVATE CLIENT INVESTMENT REPORT PRIVATE CLIENT INVESTMENT REPORT SAN DIEGO COUNTY 1Q 2014 Colliers of San Diego s Quarterly Investment Report is produced for Owner User and Private Client Investors with a focus on Office and Industrial products. The quarterly report provides market data and identifies trends in transactions up to $10 Million in total sales consideration.

2 FIRST QUARTER 2014 Market Commentary CAP RATETRENDS OVERVIEW Cap Rate (%) 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% Office Industrial The San Diego office market continues to strengthen as evidenced by robust new construction and steady office absorption. The nearly 599,436 SF of positive net absorption during 1 st Qtr placed regional vacancy below 14% for second consecutive quarter. The overall industrial/r&d vacancy rate decreased by 35 basis points in the 1 st Qtr. 2014, settling in at 8.1%. This is the sixth consecutive quarter where vacancy has been below 10% over the course of the last four years. Current cap rates for office are just under 7% and industrial are nearing 8%. INTEREST RATES Interest Rate (%) Interest Rate * 2013 Average 10-Yr. Historical Avg. ('04-'13) 20-Yr. Historical Avg. ('94-'13) 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97 6/98 6/99 6/00 6/01 6/02 6/03 6/04 6/05 6/06 6/07 6/08 6/09 6/10 6/11 6/12 6/13 5/14 TRENDS Looking forward, countywide office demand is expected to continue to be steady and vacancy is projected to drop nearly 13% by the end of The countywide Industrial/R&D vacancy rate is poised to reach the low-7% range, or even lower, assuming demand remains near its recent levels. This would put vacancy down to a level that was last seen over seven years ago. Over the past year, 27,800 new jobs were added. Additionally, interest rates continue to remain low and are currently lower than the 10-year average. Source: U.S. Dept. of the Treasury * 10-Year Treasury Rate Basis Points

3 PRIVATE CLIENT INVESTMENT REPORT Owner-User Sales OFFICE OWNER-USER TRANSACTIONS AND AND PRICING PRICING AVERAGE PRICE PSF / OFFICE Price Per Square Foot ($) $300 $250 $200 $150 $263 $257 $245 $244 $217 $210 $197 $196 $188 $189 $170 $174 $136 $130 $ # of Transactions The average price per square foot for Owner- User office products throughout San Diego County is $217 per square foot for the 1 st Qtr. of 2014 compared to $180 per square foot for 1 st Qtr. 2013; a 21% increase. Prices continue to rise as demand increases and availability decreases. There were 14 total transactions in the 1 st Qtr compared to 8 in the 1 st Qtr $50 15 $0 0 Number of Transactions Average Price Per SF Source: CoStar Group, Inc. Includes properties sold between $1M to $10M. INDUSTRIAL OWNER-USER TRANSACTIONS TRANSACTIONS AND PRICING AND PRICING AVERAGE PRICE PSF / INDUSTRIAL Price Per Square Foot ($) $180 $160 $140 $120 $80 $60 $71 $71 $83 $92 $162 $152 $153 $131 $119 $110 $105 $106 $106 $ # of Transactions The average price per square foot for Owner- User industrial products throughout San Diego County is $109 per square foot for the 1 st Qtr There were 19 total transactions in the 1 st Qtr compared to 11 in the 1 st Qtr On average, prices have remained the same since However, we are starting to see prices trend upward. $40 40 $20 20 $0 Number of Transactions Average Price Per SF 0 Source: CoStar Group, Inc. Includes properties sold between $1M to $10M.

4 FIRST QUARTER 2014 Investment Sales OFFICE INVESTMENT TRANSACTIONS AND AND PRICING PRICING INVESTMENT SALES / OFFICE Price Per Square Foot ($) $250 $200 $150 $121 $109 $140 $136 $214 $216 $208 $171 $180 $184 $180 $154 $146 $127 $ # of Transactions 2014 prices for investment sales transactions are on the rise. Average investment sale prices are at $208 per square foot for the 1st Quarter 2014 compared to $197 per square foot for 1 st Qtr. 2013; a 5% increase. There were 12 total transactions in the 1 st Qtr compared to 8 in the 1 st Qtr $ $0 Number of Transactions Average Price Per SF 0 Source: CoStar Group, Inc. Includes properties sold between $1M to $10M. INDUSTRIAL INVESTMENT TRANSACTIONS AND PRICING AND PRICING INVESTMENT SALES / INDUSTRIAL Price Per Square Foot ($) $180 $160 $140 $120 $80 $60 $73 $80 $84 $90 $147 $152 $132 $131 $122 $105 $108 $87 $99 $99 $ # of Transactions Average investment sale prices have remained relatively unchanged, with an average $111 per square foot for the 1 st Quarter 2014 compared to $113 per square foot for 1 st Qtr. 2013; a slight decrease of 2%. There were 9 total transactions in the 1 st Qtr compared to 9 in the 1 st Qtr $40 40 $20 20 $0 Number of Transactions Average Price Per SF 0 Source: CoStar Group, Inc. Includes properties sold between $1M to $10M.

5 PRIVATE CLIENT INVESTMENT REPORT Broker Profiles MARC Marc Posthumus is a Commercial Real Estate Broker with over fourteen years experience in the industry. During his career he has completed over 400 transactions and has leased or sold over $300 million worth of commercial property. Mr. Posthumus is committed to the highest level of client service and his primary areas of focus are office, industrial and R&D properties. Mr. Posthumus is an expert in the area of owner occupied real estate and private capital investment sales. He takes a consultative approach to advising his clients on their long term real estate strategy. Mr. Posthumus has extensive experience in both acquisitions and dispositions and works closely with his clients to navigate through the process of both conventional and SBA financing. Giving back is an important part of Mr. Posthumus strategic approach and he donates 10% of his commission on sales transactions to the charity of the clients choosing. MARC POSTHUMUS marc.posthumus@colliers.com Lic# AMY Amy McNamara is a Vice President with Colliers International, specializing in leasing and sales of high-rise, mid-rise and garden office / investment properties. She has joined Colliers International from Cushman & Wakefield with 25 years experience in real estate. Amy has participated in leasing and sales transactions totaling over five million square feet. She works closely with business owners, investors, developers and financial institutions to help formulate and execute a comprehensive real estate strategy to achieve her client s goals and objectives. Amy has represented such clients as Wachovia, Wells Fargo, New York Life Insurance Company, NuVision Credit Union, RYAN Companies, Suburban Water Systems, Kaiser Permanente Fed Credit Union, Principal Financial Group, AMC, and Rockefeller Group Development Corporation. Since 1993 she has completed sales transactions totaling over $213 million. AMY MCNAMARA amy.mcnamara@colliers.com Lic# Amy has received numerous honors and awards including Top Office Producer for 16 years and Top Producer Overall. She attended Mount San Antonio College and received her Associate of Arts degree. She also attended University of California Los Angeles for Real Estate Finance courses. She is involved with NAIOP, Commercial Real Estate Woman: Membership & Sponsorship Committees (CREW) and is a Commercial Investment Consultant (CIC).

6 FIRST QUARTER 2014 Team Sales Transactions PROJECT ADDRESS BUYER SELLER BUILDING SF COE SALE PRICE PRICE/SF YEAR BUILT NOTES 6142 Innovation Way Michael Brainard Palomar Airport Road, LLC 2,199 1/6/14 $369,432 $ Owner-User Shell Condition 523 Encinitas Blvd. Unit Encinitas, CA Curtis & Susan Shafer North Coast Business Park 1,508 12/26/2013 $414,667 $ Owner-User 6128 Innovation Way Unit K1 Labrum Capital Advisors, LLC Palomar Airport Rd LLC 2,199 10/4/2013 $336,447 $ Owner-User Shell Condition W. Bernardo Ct. San Diego, CA Dream Design Builders LLC Civitate Family Trust 5,326 9/13/2013 $1,017,000 $ Owner-User 6156 Innovation Way Unit Q-1 ACCY Inc Palomar Airport Rd LLC 2,590 7/8/2013 $396,270 $ Investment Sale Thornmint Rd. Building B San Diego, CA Kid Ventures LLC Thornmint Office Partners LP 21,410 6/26/2013 $3,340,000 $ Owner-User 523 Encinitas Blvd. Unit 110/113 Encinitas, CA Curtis & Susan Shafer North Coast Business Park 3,621 6/24/2013 $1,087,000 $ Owner-User

7 Team Sales Transactions PRIVATE CLIENT INVESTMENT REPORT PROJECT ADDRESS BUYER SELLER BUILDING SF COE SALE PRICE PRICE/SF YEAR BUILT NOTES 6164 & 6166 Innovation Way Units Q5 & Q6 EggHead Ventures LLC Palomar Airport Road LLC 6,804 6/19/2013 $748,440 $ Condominiums in Shell Condition & Innovation Way Bressi Towers Investments LLC Palomar Airport Road LLC 18,051 5/31/2013 $1,859,500 $ Condominiums in Shell Condition 6150 Innovation Way Unit M4 Paul M Hunter Trust Palomar Airport Rd LLC 2,743 3/22/2013 $312,018 $ Owner-User 6194 Innovation Way Unit P-5 Patton Road LLC Palomar Airport Rd LLC 3,772 2/20/2013 $433,780 $ Owner-User

8 FIRST QUARTER OFFICES IN 63 COUNTRIES UPDATED MARCH 2014 AT A GLANCE Colliers International Colliers International is a leader in global real estate services, defined by our spirit of enterprise. Through a culture of service excellence and a shared sense of initiative, we integrate the resources of real estate specialists worldwide to accelerate the success of our partners our clients, professionals and communities. We offer a complete range of services to owners, investors and occupiers on a local, regional, national and international basis. The foundation of our service is the strength and depth of our local specialists. Our clients depend on our ability to draw on years of direct local market experience. In addition to these sectors, we provide our clients with a deep level of knowledge in specialized industries and product types, such as law, technical facilities, and health care. COLLIERS SERVICE LINES Founding member of the World Green Building Council Member of World Economic Forum Named Top 100 service provider more times than any other real estate firm The second-mostrecognized commercial real-estate brand (2014 LIPSEY SURVEY) 485 offices in 63 countries US $2.1 billion in annual revenue 15,800 professionals and staff 1.46 billion* square feet under management $75 billion USD in total transaction value * Square footage includes office, industrial and retail property under management. Residential property is excluded from this total. All statistics are for 2013.