West Palm Beach, FL (WiredPRNews.com) — New market realities and re-pricing of commercial real estate property are creating strong buy opportunities for investors and for companies that want to own the space they occupy, says Ed Kearney of Kearney Commercial Realty/Sperry Van Ness.
Over the past 12 to 18 months, some commercial realty prices have dropped by one-third, Kearney says. Potential buyers who watched and waited will now find that they can step in and obtain quality commercial real estate that is well priced.
“Many sellers realize that asking prices that are $10 or even $15 per square foot above the current market will not attract bids or receive approval for real estate loans,” says Kearney of Kearney Commercial Realty in Palm Beach County.
Commercial realty prices rose, though not as fast, with residential property prices for much of this decade. When home prices started plunging in late 2007 and some banks collapsed, Florida commercial real estate sales dropped off dramatically, according to an analysis by Kearney Commercial Realty.
“Sellers were stunned by the sudden halt in activity,” Kearney says. “The commercial real estate market was sharply out of alignment and buyers backed off due to the uncertainty and lack of financing.”
The prolonged weakness of the Palm Beach County economy has forced down prices on all types of real estate, Kearney says. A growing number of commercial real estate owners are recognizing that the commercial real estate market has entered a new phase.
“That may mean a reduction of 10%, 20%, 30% or more previous levels,” says Kearney of Kearney Commercial Realty. “While the thought of cutting prices is not pleasant, it is one that more sellers seem willing to accept if they want pass title on a commercial real estate property.”
Real estate investors now have increased opportunities to purchase Florida commercial real estate at a deep discount from the market peak, says Kearney of Sperry Van Ness. Serious sellers are more willing to accept the validity of recent sales in setting prices for current transactions.
“As a loan advisor, I can see that when closing prices match up to appraisals, lenders are in a position to fund a transaction,” Kearney said. “When the appraisal comes in much lower than the price on the preliminary agreement, the chances of the deal going through are nil. Buyers are well aware of this reality and are making bids with an eye toward sales that will be funded.”
“Speculators may want to wait for even greater bargains, but serious real estate investors and owner-occupiers that plan to hold onto the properties can – and should — move now,” said Kearney of Kearney Commercial Realty.
ABOUT KEARNEY COMMERCIAL REALTY/SPERRY VAN NESS
Kearney Commercial Realty serves all South Florida commercial real estate developments in West Palm Beach, Jupiter, Palm Beach Gardens, Boynton Beach, Boca Raton and surrounding areas.