January 19, 2006
Socal Apartment Rents
According to RealFacts, Inc. Rental rates increased throughout most of the West last year and that is an obvious sign that landlords were slowly regaining some pricing leverage.
All but two of the 20 major markets in the Western U.S. survey by the real estate research firm ended 2005 with higher apartment rents than in the previous year.
The biggest increases were concentrated in Southern California, where the regional economies generally have been stronger than other parts of the West.
Apartment rents in Riverside and San Bernardino counties climbed 7.3% during the year to an average of $1,086 a month. That was the West's largest annual rent increase of any county. However, the Inland Empire may be showing some weakness as average occupancy rates in the two county region drop to 91.6% last year from 95.3% in 2004. The downturn in occupancy could force local landlords to back off the steady rate increases that had been ongoing for several years.
The Orange County / Los Angeles, markets reflected the highest average rent at $1,459 a month, a 6.6% increase over 2004.
Southern California Real Estate Valuation Trends
This site contains local real estate market trends and business issues that impact commercial and residential real estate in Orange County and the greater Southern California region. Current issues relating to the valuation profession and real estate industry will be posting topics. Scott Pettifer, MAI, SRA President - Chief Appraiser A Real Estate Valuation & Brokerage Firm www.OCommercial.net www.OCappraiser.net www.OCinvestment.net
Sunday, February 12, 2006
January 19, 2006
January 28, 2006
Commercial / Investment Real Estate Transactions
Tustin Irvine Medical Center purchased a 38,636 square-foot industrial business center at 1530-1534 East Edinger in Santa Ana for $4.2 million or $108.71 psf.
A nine-unit apartment complex at 744 Rose Ave in Long Beach was purchased for $1.3 million or $144,444.
A six-unit apartment complex at 1941-1947 Daisy Avenue in Long Beach for $1.14 million or $190,000 per unit.
OC Real Estate Transactions
Western State Technology Inc. purchased a 17,934 square foot commercial building at 8 Autry in Irvine for $2.4 million or $133.83 per square foot. Gray Haley of CB Richard Ellis represented both the buyer in and the seller, a private investor. Western States has also bought a 22,414 square foot industrial building at One Mason in Irvine for $3.9 million or $173.99 per square foot.
A three-unit apartment complex at 7222 Dinwiddie Street in Downey was purchased for $850,000 or $283,333 per Unit. Paula Montoya of A&S Property Investment represented the buyer, Doug Rodermund of Morgan Skenderian Investment Real Estate Group in Newport Beach represented the seller.
January 20, 2006
Significant Orange County Transaction
The Irvine Co. has announced the purchase of the Irvine Center Towers. The Irvine Co. did not disclose the price paid to take over the Irvine Center Towers from Philadelphia's CIGNA Corp. and Transwestern Investment Co. of Chicago.
The buildings on Von Karman Avenue and Michelson Drive, likely sold for about $325 million or roughly $360 per square foot according to the estimate by Scott Johnstone, a senior vice president with the brokerage firm Grub & Ellis. The two Towers contain approximately 900,000 square foot of commercial space. Johnstone said the Irvine Co. is already the largest holder of office space in the county and is expected to make other purchases in the commercial hub near John Wayne Airport in the future.
February 6, 2006
Riverside Church says Caltrans underpaid for its Land
A church that has served the deaf community for half a century in Riverside is fighting for survival more than two years after Caltrans evicted the congregation and demolished the improvments to make way for new ramps on Interstate 215.
Per the Los Angeles Times, church leaders say the $1.4 million they got from the state is less than a third of what they need to build or buy a facility equal to the one lost in September 2003. Pastor Tom Mather says he has looked at 35 to 40 sites, all of which were unsuitable or too expensive.
Church attorneys allege that Caltrans used outdated sales information to apppraise its property, ignored condemnation procedures and broke promises to help find the congregation and new site. According to the Times, the situation has been complicated by Southern California's superheated real estate market.
A Caltrans spokesperson says of the church, "they received every benefit that could have applied, we have been more than fair." John C. Murphy, an Irvine attorney who represents Calvary Deaf Church, said the church complex was worth at least $4.6 million when Caltrans acquired it. Murphy said he would seek, in addition to the $3.2 million difference between their value estimate and the amount received, damages because of escalating construction cost, rising real estate values and the loss of good will. A key issue is whether the church property should be reappraised to reflect replacement cost, because Caltrans might not have taken the proper legal steps when they condemned the property.
Murphy said Caltrans improperly appraised the church and set aside money for the purchase well before filing an eminent domain complaint and receiving necessary approval from Riverside County.
Using an August 2002 Appraisal, Caltrans determined the church was worth 1.4 million and deposited the amount with the state treasurer in April 2003, according to cut court documents, Murphy said Caltrans received an order to condemn the property from the Board of Supervisors on May 20, 2003, court records indicate the Caltrans filed the eminent domain action about two months later. Murphy says they got it all backward. "They did things you are not supposed to do".
What was unusual about the appraisal, Murphy said "was that Caltrans developed 30 scenarios with values between $700,000 to $2.3 million. Court records state that some of the sales data used for the valuations were from 2000 and 2001, and sworn statements by the appraiser indicate that "he did not know what the property was worth." Caltrans denies doing anything improper, nothing, they say was filed out of sequence. "The $1.4 million paid to the church was based on the best information available at the time," Caltrans has since demolished the structures.
February 3, 2006
Mortgage default notices rise 34% in quarter. 50 lose homes.
Analysts saythe uptake in Orange County is merely a result of reduced home price gains. Orange County received 918 notices in the final three months of 2005, compared to 684 in the fourth quarter of 2004, according to Dataquick Information Systems. Only fifty homeowners actually lost their homes to foreclosure in fourth quarter of 2005, compared to 22 a year earlier According to Dataquick. Only 5% of these cases actually go into foreclosure according to the real estate research firm.
January 26, 2006
Home builders in California, had their best year in nearly 2 decades in 2005 selling 136,000 new houses and condominiums, data released this week. That was a 4.4% increase from the year before, according to real estate research firm to Dataquick information systems. It also was the highest number of new home sales since the La Jolla firm began keeping track in 1988.
In Southern California, new home sales last year rose 14.7% to 68,523. Sales have increased every year since 1995, when the region was emerging from a real estate downturn. Last month, sales of new homes in the region rose 22.6% year over year, while sales of existing homes declined nearly 10%.
Despite the strong month, there are growing indications that demand for new homes may be cooling. The number of permits issued for new home production in California declined in 2005 for the first time in a decade, and builders are not raising prices at the same pace as a year ago.
However, new home prices have shown little sign of softening, the median sale price of new homes rose 14% to $439,000 in California. The big reason prices still show as increasing is that builders don't reduce prices anymore. They simply offer incentives, such as discounting closing costs or interior design upgrades, to help close deals when demand cools.
Riverside County led the state in new home sales last year, accounting for about one in five new home sales. 2005 was the first year in the past few years, that supply approached the demand for new homes, according to Mark Boud an Orange County based economist and industry consultant.
Monday, January 02, 2006
OC Real Estate Transactions
DiGiorgio Development purchased a 67,000 square foot industrial building at 10741 Walker Street in Cypress for $3.6 million or $53.73 psf.
Tawa Supermarkets leased a 20,000 square foot industrial building at 6401 Regio Avenue in Buena Park. The term was 10 years and was valued at $1.42 million, per the leasing broker.
Core Realty Holdings of Newport Beach purchased a 65,300 square foot office building at 26550 The Old road in Valencia for $20.8 million.
Scott Pettifer, MAI, SRA
RIM BlackBerry in patent struggle- Don't Shut Me Down
I purchased the new Blackberry 8700 cell phone and organizer. I've been one of the few real estate appraisers that love and use a BlackBerry and have had one for several years. Love the superior push e-mail capability. The 8700 with Cingular will allow me to use the same device for cell calls and e-mail. I also purchased a wireless bluetooth headset Plantation Discovery 640. It should be a fun couple of weeks trying to get all these devices to work together. I hope BlackBerry maker RIM - A Canadian company doesn't get shut down and a lot of us lose the best e-mail device on the market. RIM is currently in a "take no prisoners" patent lawsuit with NTP. The lawsuit threatens to shutdown the entire Blackberry service after a settlement fell through in 2005. Its doubtful the Blackberry service will be shut down considering their largest single user is the United States Government. Anyway, RIM don't GO. Settle the lawsuit and lets get back to work. So far love the 8700.
Scott Pettifer, MAI, SRA
Saturday, December 17, 2005
SoCal Notes on the Computer Screen
- According to the CA EDD, the jobless rate in Orange county dipped to 3.7% in November 2005. One month earlier it was 3.8% and one year prior the unemployment rate was 3.9%. A large portion of the almost 6,100 new jobs in November is due to holiday hiring. More telling of OC economic conditions is the county has produced almost 10,000 high paying professional and business service jobs over the last 12 months. OC continues to have the lowest jobless rate and creates more high paying jobs than other SoCal regions.
Local Real Estate Deals on the Computer Screen
- A 11-unit apartment complex at 1561 W. Pacific Coast Highway in Long Beach sold for $1.4 million or $127,272 per unit.
Business Notes on the Computer Screen
- Google in talks to purchase a $1 billion stake in AOL after negotiations with Microsoft were terminated. Its a 3 horse race for world WEB domination and the Big Three are taking no prisoners. Google. Yahoo. Microsoft. Which one will win the race? Maybe there is a long shot out there? A company
that is off radar?