Matthew Bacon Joins NAI Norwood Group

Bedford NH – NAI Norwood Group is pleased to welcome Matthew Bacon to the Bedford team. Matthew’s primary focus is investment property sales and commercial leasing in southern and central New Hampshire. Matt comes to NAI Norwood Group with a residential and multifamily investment real estate background. He is looking forward to making the switch to full time commercial real estate.

Matthew graduated Cum Laude with Honor’s Scholar distinction, elected to Psi Chi from Eastern Nazarene College in 2006.  He is enrolled in the MBA program at Southern New Hampshire University, and is a member of The National Society of Leadership and Success.  Matthew also serves on the NH Association of Realtors Public Policy Committee as well as the Communications Committee.

Outside of the business world, Matthew serves on the Board of Trustees for Fellowship Housing Opportunities, Inc in Concord, NH.  He is a past Big Brother, and 2010-11 member of the Easter Seals Veterans Count Club.  He is also active in several area networking groups, and is a former member of the Concord Young Professionals Network Social Committee.  Matthew also attends Manchester Young Professionals and Job Creators Network events regularly.

We are looking forward to working with Matthew as he continues his career by providing the services needed for his clients to succeed.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

Assets - by Greg Whalen and Bill Wagner

Market Trends

“The sum of the parts...may be greater than the whole”

Rising real-estate values provide a cyclical opportunity for repositioning assets and generating cash. According to the WSJ, March 25, 2015 edition, Sears Holdings Corp just announced that it would split off as many as 300 of their best locations into a separate company by June to raise money.  Hudson’s Bay Co., the Canadian parent company of Saks Fifth Avenue and Lord & Taylor, announced last month a joint venture with U.S. mall operator Simon Property Group to sell and lease back 42 of their department stores with plans to split off the venture into a real estate investment trust (REIT). And Darden Restaurants, the world’s largest full service restaurant company, with brands such as Olive Garden, Long Horn Restaurant and Capital Grille, is exploring options for monetizing its real estate portfolio.

Do those same metrics hold true for the small, individual operator/investor as well? Absolutely.  It’s all about cleaning up the balance sheet. Whether you are a single or multiple property owner, with one or several locations, owner occupied or landlord, keeping an eye on the bottom line is crucial.  Think in terms of a property “check-up”. How healthy are my real estate assets? How often should the portfolio be examined/monitored? The short answer is constantly. Absenteeism on the property front does not make the pocketbook grow fonder. On the other hand, too much tweaking, tinkering and meddling will get you into trouble every time, a clear sign one is chasing the market. An annual in-depth performance review should be mandatory, coupled with an analysis to determine options for unleashing value and cash.

Rather than disposing of a real asset in its entirety, think in terms of its parts. Consider the example of a property comprised of land and a single building with multiple tenants. Options abound: sell the building only and retain the land in the form of a ground lease, sell the ground lease and retain the building, or convert the property to a condominium (include the site as part of the value for each unit or once again, retain the land in the form of a ground lease to the condo association and sell the bricks and mortar only). Liquidating an asset in parts will not always be the best solution, but it deserves equal consideration before making a final decision.

Check with Bill and Greg to help you navigate through these unchartered waters.     

Services

Off-Market Opportunities

The Portsmouth commercial market is replete with property owned for many years by the same family or entity. Whether as an owner or an active investor, often times you may be approached to see if you would be interested in selling your property or purchasing a new one. 

What to do and how best to respond? As this month’s Market Trends article suggests, you need to analyze your situation to see if you would consider selling or buying property, but only if the transaction meets the goals you and your family have established. These circumstances often require off market representation, which means the Whalen Wagner Team will use its expertise and client base to help develop a strategy which will enable you to achieve your goals, within the parameters you establish, by matching buyers and sellers with similar needs.

As a seller, you will want to address the following:

¨ What is the up-side potential of my property?

¨ How does the market perceive my property?

¨ Are there investors looking for my type of property

¨ How do investors evaluate the worth of my property?

¨ What can I do to increase its value?

As an investor you will want to explore the following:

¨ What types of properties meet my objectives?

¨ Are there properties in Portsmouth which meet that criteria?

¨ What is the best way to contact a prospective seller?

¨ Who can I rely upon to represent me in the marketplace?

¨ Are there opportunities in both the private and public sector?

As local service providers with a long track record of success, the Whalen Wagner Team will guide you through the process of making more informed decisions that will minimize cost and maximize value. With the Whalen Wagner Team you get an ally and aide-de-camp for sound advice and real estate stewardship.

Call us today for a creative perspective on how to advance your business plan and real estate objectives.

Greg Whalen

o: 603.637.2019 | c: 603.674.7800

gwhalen@nainorwoodgroup.com

Bill Wagner

o: 603.637.2014 | c: 603.494.7967

bwagner@nainorwoodgroup.com

28 Deer Street Suite 301 | Portsmouth, NH 03801 | 603.431.3001
nainorwoodgroup.com | info@nainorwoodgroup.com

NAI NORWOOD GROUP SELLS 6,760 SF RETAIL AND OFFICE SPACE

Milford NH – NAI Norwood Group is pleased to announce the sale of 318 Nashua Street in Milford NH. The 6,760 sf commercial building sits on a half-acre not far from the Milford Town Center. The seller was represented by Perry Snow and Judy Niles-Simmons from NAI Norwood Group. The buyer was represented by Theresa Grella from the Bean Group.

Cardoza Flooring, LLC, the buyer, purchased this site to relocate his retail carpeting/flooring store from current Milford Oval location and increase size of the store.

According to the registry of deeds, the sale closed on August 12, 2014 in the amount of $315,000.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

NAI Norwood Group Leases Former Gary Blake Motorcars

Exeter NH – NAI Norwood Group is pleased to announce the lease of the former Gary Blake Motorcars location at 84 Portsmouth Avenue in Exeter NH. The 4,000+/- SF free standing building was leased to Northeast Credit Union. John Mueller of NAI Norwood Group represented the owner/lessor, Gary Blake, in the leasing of this exceptional retail property on Portsmouth Avenue in Exeter.

The tenant, Northeast Credit Union, is a long-term well respected financial services company that sought a long-term tenancy in a high profile location.  The tenant was the perfect tenant to fill the vacancy caused by the recent retraction of the auto sales business.

“In the last 18 months, this is the second property that NAI Norwood Group has represented in which Northeast Credit Union became the tenant. We are happy to help match property owners with excellent tenants.” Said Sarah Carson, Marketing Director at NAI Norwood Group.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 45+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 28 Deer Street Suite 301, Portsmouth, NH 03801 (603) 431-3001.

NAI Norwood Group Sells State Owned Property

Concord, NH – NAI Norwood Group is pleased to announce the sale of 247-249 Pleasant Street in Concord. Judy Niles-Simmons and Karl Norwood of NAI Norwood Group represented the seller, State of NH Dept. of Administrative Services. The property was sold to Dartmouth Hitchcock on July 29, 2013 for $900,000 according to the Registry of Deeds.

The site included two buildings totaling 5,356+/- SF on .99 acres, and it situated directly across from Concord Hospital. The office buildings were part of the former homestead of Mary Baker Eddy, and were most recently used as office space by the city of Concord.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their 40+ years of dedicated local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603)668-7000 or 100 Market Street Suite 200, Portsmouth, NH 03801 (603) 431-3001.

How to Determine the Cost of Office Space

Let us assume for a moment that you own and operate a “typical” New Hampshire business. You have 10 employees and are searching for new office space but over the next five years you think there will be another 10 employees. You have projected the salaries of those new employees into your model moving forward. You have accounted for salaries, benefits and even for training and potential changeover. But what is the true cost of those employees as it relates to the facilities and what is that going to be over time?

We normally do not link our physical office space to cost per employee however it is just a short step to do so. Let us assume for a moment that it costs you $20 per square foot to occupy office space in New Hampshire. That includes your utilities, taxes, base rent etc. I choose this number because it is fairly representative of an average rent that most people pay, and more importantly… it makes the math easy. So if you are paying $20 per square foot to occupy your space, how much space do you need for your 10 employees and the 10 additional people to grow? You may say that a cubicle is 8 feet by 8 feet or 64sf total, or you may say that that private office is 10 feet by 12 feet or 120sf total.  Therefore one employee sitting in the private office costs you 120sf times $20psf or $2400 per year.

This however would not be realistic to the market. Each office needs hallways for access; conference rooms for meetings; kitchens for eating; receptions for clients; bathrooms for…. you get the idea.  If you are planning for additional growth you cannot simply use 64 or 120 square feet to budget.  So what number do we use? Let’s ask the federal government.  Seriously. According to a 2012 article the General Services Administration in conjunction with OGP Office of Real Property Management concluded that the average federal employee needs 218sf.

Say what you will about the feds, but this figure proves to be fairly close. A 2010 article by Roger Vincent of the Los Angeles Times discussed a number slightly north of 200sf per person, which has been declining over the years. In the 1970s, Vincent reports, employers had budgeted 500sf per person. Technology and work place styles have caused that number to be cut in half. The trend continues; think about your doctor’s or lawyer’s office, or where you work currently. Think about how trends have changed over the years and space as compressed.  If you are this hypothetical CEO looking for 20 employees, think about how many employees will have permit desks versus hoteling on a short term basis? What other efficiencies can you gain over time?

So according to the Times forty years ago office space cost 500sf times $20psf or $10,000 per employee and today that same space is 200sf times $20 or $4,000 per employee per year.  Should you consider that $4,000 or lower number when projecting out? Will the trend continue? Some experts have predicted the number to go as low as 50sf per employee by the end of this decade.  If you are signing a ten year lease can we project out that you are going to need the same foot print but double or triple the employee density?

In the end however the truth is somewhere in the middle. Yes technology and work style has compressed our need for office space, but let’s take into consideration a local investment bank in Boston reportedly shrinking its 1,000,000+ sf of office space into just over half that amount and not losing an employee.  In the end the macro trends and the size of this employer allow them to increase the density. In a company that large you can make assumptions about travel or time off.  They can host servers off site. They can cut back on the number of conference spaces or other gathering areas. However in the end if you are a small 10-20 person shop there are still things you must have. Perhaps you must have a conference or kitchen area or sever. Certainly you would not want to cut back on the hypothetical CEOs office. All of these things are not as scalable.

In the end, unless your business model calls for something else, plan on the following the government’s lead and hedge on the side of caution, 250+ per person is a good range. While 50sf may sound great from a budgeting perspective it may not be the best for recruiting as some jail cells are larger than that.

Commercial Foreclosures 2012 Update

Written by Chris Norwood, NAI Norwood Group

In November of 2011, there was a four year dip in the total number of foreclosures in the US. In January of this year, real estate research firm Realty Trac forecasted that 2012 would be a big year for foreclosures across the nation. They cited fourth quarter 2011 process delays as well as the “robo signing” scandal of possible reasons why properties that should have been foreclosed on in 2011, would be closed in this year. Here we are wrapping up 2012 and we must ask: what is taking place with foreclosures and what is going on in commercial foreclosures?

Let us begin with the New Hampshire macro foreclosure market. Do you remember those days, when no one worried about that word. In 2004, the foreclosure rate (Total number of foreclosure deed transfers divided by total transfers), was at a 17 year low. Less than one percent of all deed transfers in the state were through a foreclosure. Foreclosures continued to rise breaking the 10% barrier in 2008 and peaking in 2010 at over 16%. That is one out of every six real estate transfers. A large number.

Since that time foreclosure rates have been flat. 2011 clocked in just under 16% and 2012 looks to be about the same forecasted from the first 10 months of the year. In New Hampshire we have seen home sales begin to climb. In September of this year the New Hampshire Association of Realtors announced that they had seen eight double digit straight months of home sale increase month over month. In addition median home prices were leveling. So while foreclosures continue to remain in the forefront of real estate discussions, they are not increasing here in the Granite State.

On the commercial front, experts from across the nation are viewing things differently. While there are currently billions of dollars of outstanding debt across the nation that may be considered “troubled” we need to place that in context. In a residential foreclosure process, when a homeowner falls behind on payments, the long process has begun a foreclosure. Along the way there are many options to avoid that pitfall such as short sales. In the end when a short sale or foreclosure happens the result is the current occupant probably vacates. In the commercial process much of the troubled debt in the market is underwritten on projects that are leased as investment properties to other tenants. This is important because the underlying asset still may have cash flow and may have value. As a result commercial property tends to be less likely to foreclose as it is to have the note sold or to have another investor come and pick it up.

This is not to say that commercial foreclosures cannot happen.  Historically, commercial real estate trends 12-24 months behind residential. In 2008 all foreclosures in the state were around 14% but commercial properties were being foreclosed less than 9%. The following year, commercial was back on par with the rest of properties at 14%, a 12 month lag.  However, in New Hampshire we have then bucked that tend. Since 2010 the commercial foreclosure rate has been falling and this year it is projected to end somewhere back around that 9%, despite the statewide rate being around 16%.

Forecasting from here is not easy; however the decrease in foreclosures in commercial property is probably more attributed to the improved job numbers and the fact that the health of New Hampshire is strong. Large properties with syndicated debt still may be in trouble, but local lenders are doing what they can to work with property owners who are in trouble.  While there are outside factors such as the “Fiscal Cliff” that loops for our federal delegation, the local prospect seems positive.  We see a marginal lowering of the foreclosure rate for all property in New Hampshire for next year. 

Press Release 21 Congress St. Portsmouth

Portsmouth, NH – Andy Fleisher of NAI Norwood Group Portsmouth announces that Thirsty Moose Taproom & Pizzeria, LLC has leased the property at 21 Congress Street, Portsmouth, NH. Andy Fleisher of NAI Norwood Group represented the landlord, Wenberry Associates, LLC and Chris McInnis, Paul McInnis, Inc. represented the tenant.

The Thirsty Moose moved in May 1, 2012 and will be opening soon. Owners Joe Kelley and Carrie Stepien have given the place a face lift complete with a new bar and a replica of the Memorial Bridge inside. They will have an amazing 100 beers on draft to accompany an American Bar & Grille Menu featuring meats made in house from scratch and gourmet pizza. Joe Kelly and Carrie Stepien also own and operate Joe’s New York Pizza and Fat Belly’s in Portsmouth.

Property consists of 7,000± square feet of restaurant and kitchen space and a 2,000± square foot lower level space that is built-out for a bar, with area for music and/or dancing.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms. Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their strong local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit http://www.nainorwoodgroup.com/. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603)668-7000 or 100 Market Street Suite 200, Portsmouth, NH 03801 (603) 431-3001.

How to Tenant Your Building in Today’s Dynamic

by Chris Norwood, cnorwood@nainorwoodgroup.com

Spring is here. The clocks have been set forward and the flowers are blooming. The Red Sox are dusting off from last season and the B’s and C’s are planning for the post season. As we look forward to some late season action, we got to thinking: How is tenanting your building much like a late season or post season sporting game?

At the end of the 2004 season, Terrell Owens at the prime of his career with the then NFC Champion Philadelphia Eagles was set to play the New England Patriots in the Superbowl. We all know that the Pats went on to win that game, but on the losing side of the ball, Owens played one of the more dramatic roles in a Superbowl loss. Owns snagged nine receptions for one hundred and twenty two yards in a loss, on a broken fibula. Win or lose it was the last game of the seasons so he went out there with a broken leg and played.

Game six of the American League Championship Series against the New York Yankees in 2004. In a must win scenario, Curt Shilling takes the mound for the Red Sox with his injured ankle. It was “do or die” and in those situations anyone is available. Any player, injury or not, rest or not is available to pitch or be in the field, because “there is no tomorrow”.

As bleak as “there is no tomorrow” may sound, it has its applications in real estate as well. When positioning your property to the market and to prospective tenants what are your realistic terms to get the property leased. Would you take a short term lease? What about the credit of the tenant you are seeking? Would you consider a gross lease? What about pricing? What role does your lender play? Often times properties are marketed like it is an early season baseball game. We will field our team and see what happens, if our pitcher gives up a few hits, we will leave him in and see if he can work out of it.

We feel that today’s market is much closer to a post season game. You want to leave some players warm in the dugout or in the bullpen, but make sure you put your best team on the field. Consider lowering the price, or furnishing the space. Not all lease negotiations are about the rental rate.If you would consider improving the space, why wait, do it now to attract the tenant or have a conceptual or a rendering done. It makes sense to have these discussions before the property is put to market and before the marketing has been created.

Most real estate plays out that a landlord will put property out there for lease and a tenant comes along and puts in an offer. The landlord, feeling he has some negotiating room puts in a counter offer, figuring that there is one more bite at the apple. But the apple never comes back, the tenant relocated to another building. Negotiations in today’s economy are one or two innings, not nine like they used to be.

Most importantly in today’s market, once a tenant is found and has some interest in the space, give Shilling the ball. Put your best foot forward, bloody sock and all, and give your best offer to the tenant. The Sox had a game seven that year and went on to win the World Series for the first time in generations. A landlord may not have the luxury of a game seven.

Just What Am I Surrendering In a Surrender Clause?

by Chris Norwood, cnorwood@nainorwoodgroup.com

If you have a lease, either as a tenant or as a landlord, there is no telling how many pages it could be. Some of you may have three page leases, others thirty or more pages. It is safe to assume that if you have a three page lease, the likelihood of a surrender clause being inside is slim. But no matter how many pages, review your lease to find out if you have this clause, it could make all of the difference when the lease is done.

Surrender does not mean that you are laying down your arms and raising the white flag. In this case we are discussing what the condition of the leased premise will be when the tenant vacates the space. The clause will dictate what should stay or should leave with the tenant and what the consequences are if the tenant does not perform based on that outline.

There are no standards when it comes to what to expect when a lease is up. It is fair to say that reasonable wear and tear (carpet stains, wall marks) is acceptable to landlords, however this is not always the case. The largest thing to investigate from both a landlord and a tenant’s perspective is what if there has been construction. What happens then?

CASE STUDY:

Sally’s Seashells sells seashells in the seacoast. In her original 5 year lease Sally leased 1000sf in a small strip plaza. In her third year space was going so well that she leased an additional 1000sf. She knocked out a firewall that joined the two units and build out some new offices. In addition she installed, at her cost, a new loading dock so she could get larger seashells delivered. Now five years is up and she is leaving… What now?

In a simple context, most items that are affixed to ground will stay with the landlord. This would include new offices and a loading dock. But what if the loading dock at an electronic leveler, that was movable? What about the demising firewall, should Sally install a new one to put it back how it was? What if 2000sf units are now more leasable than 1000sf units?

A seemingly black and white lease clause becomes somewhat variable based upon market conditions and the desires of both parties. The recommendations, though simple, are very effective. 1) Before entering a lease, take pictures and itemize what is there. 2) if either side performs construction or amends the lease, itemize everything and discuss your intentions. 3) when tenants are known to be leaving start the conversation early, you may find that both sides share more common ground.

There are no guarantees and leasing is no exception. As such there are no “standards” when it comes to lease language, you must consult your own lease and your own counsel if necessary.  However, our team is always available should you have any questions on this clause or any other’s in your lease, we will be happy to point in the right direction.

Panera Bread Company Leases Space at Pinkerton Place in Derry

DERRY, NH - NAI Norwood Group is pleased to announce that Panera Bread Company has entered into a lease agreement for a 4,100 +/- SF free standing building with drive thru at the retail development project "Pinkerton Place" in Derry, New Hampshire. Pinkerton Place, located at 19 Manchester Road, has received full approvals for 49,000 +/- SF of retail space on approximately 8.5 acres and is currently under construction. According to construction manager, Randall LaClaire, Panera Bread should be open for business this summer. Pinkerton Place is a well located retail project at the corner of Route 28 (Manchester Road) and Ashleigh Drive in front of a new Wal-Mart Supercenter, scheduled for completion in 2012.

Brian O'Brien and Chris McMahon of NAI Norwood Group's Portsmouth, New Hampshire office represented the Landlord, Boomer Wolf, LLC in this transaction. Harmon Lewis of National Commercial Brokers represented PR Restaurants, LLC a Franchisee of Panera Bread Company. NAI Norwood Group is the exclusive broker for the remaining available retail space available at Pinkerton Place.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their strong local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 100 Market Street Suite 200, Portsmouth, NH 03801 (603) 431-3001.

Nothing is Certain Except CAM and Taxes

written by Chris Norwood, NAI Norwood Group

The New Year’s parties are over. The champagne flutes and funky glasses are packed away for another 12 months. It is that time of year for resolutions and CAM review.

It is time to break out the lease and find out who is responsible for increases in expenses. Common Area Maintenance (CAM) and Taxes are expenses that are paid for by a tenant in a triple net lease. When the Real Estate Taxes or the CAM go up (or down in some cases) the tenant is responsible. Even in some gross or modified gross leases the tenant still has to pay for the overage charges if the expenses go up.

Typically as a tenant pays their rent on a triple net basis, the monies that get paid in rarely equal the actual expenses. Snow falls differently than budgeted, there is more landscaping that takes place, or the taxes went up. At the beginning of the new year the tenant should received a statement of what they paid in and what the new budget for the following year is. For triple net and some gross leases the tenant will be responsible for this increase marching forward. On most triple net leases the tenants will also have to look back over the previous year and come out of pocket for any difference in the expenses in one stroke.

If you are a landlord or a tenant, take the new year to review these clauses of your lease. In addition be on the lookout for expense “stops”. A stop is when one of the parties has a cap on their exposure to increases. For example there may be a tenant “stop” of a 3% increase annually on real estate taxes. Therefore a tenant shall pay for the first 3% increase but then the landlord picks up the balance. You should look into these details on your lease to see what your exposure is.

There are no guarantees and leasing is no exception. As such there are no “standards” when it comes to lease language, you must consult your own lease and your own counsel if necessary.  However, our team is always available should you have any questions on this clause or any other’s in your lease, we will be happy to point in the right direction.

Where Are All of the Commercial Foreclosures?

In a sea of bad news, locally and nationally, we would intuitively think that there is a multitude of bad commercial properties coming on line in the foreclosure arena. Passive investors and users alike should be well suited to sit and wait until that building or dirt comes on the block and they can grab it up. However the data illustrates a different picture for The Granite State.

From the beginning of the first quarter of 2010 through the end of the third quarter of 2011, there were 2255 property transfers each month* in the state. In any given month only 100 of these were labeled commercial (about 4.5%), while the balances were residential or unclassified. Commercial property transfers in the state, as the numbers show, are a small portion of the total number of deed transfers. It should be noted however that there are a large number of unclassified deed transfers, about 8%, which can skew the data.

 Back to the alleged tidal wave of commercial foreclosures that are coming on line. On average there are about 100 commercial property transfers each month, of these about 12% are foreclosure transfers. Keep in mind this is statewide and for all property types such as free standing, condominium and land. As a point of reference residential home, condo and land foreclosures, over that same period was 15%. While these numbers may sound high, keep in mind that in the last real estate recession in the nineties, our rate was up close to 20%.

Commercial foreclosure transfers in the state are far lower than the perception of what they should be and slightly less than the residential homes that are being foreclosed upon. What types of properties are getting foreclosed upon?

 Of 10 Commercial Property Foreclosures…

…1 is a piece of raw land

…1 is a commercial condo

…2 are multifamily property five units or above

…6 are commercial land and building

Beyond the numbers we are not seeing these foreclosure sales affecting the overall market in terms of huge discounts to value. Are prices depressed off their highs a few years ago? Yes. Are they taking the steep discounts that residential homes have taken? Surely not. The reason is that there is still demand and even when these commercial properties are purchased at foreclosure they are being resold, released or utilized. The next time the national press discusses the decline in value of commercial property, remember that The Granite State is fairing well.  

*Deed transfers, warranty, quitclaim and foreclosure deed transfers.

NAI Norwood Group Leases Space to AirZone – A Play Zone For Kids

Exeter, NH - NAI Norwood Group has leased 5,700 SF of retail space to AirZone at Exeter Commons Shopping Center at 75 Portsmouth Avenue in Exeter, NH. AirZone, the newest addition to Exeter Commons, is a "fun-filled" inflatable playground with slides, obstacle courses and bouncy structures galore. AirZone is designed to provide kids and families with a safe, clean, and exhilarating environment to have fun and exercise. AirZone will offer planned parties, individual admission, and more. The grand opening of AirZone at Exeter Commons is scheduled for November 25, 2011. For more information about AirZone or to book a party please visit www.airzonekids.com. AirZone has chosen Exeter Commons as their first location and plan to open more locations in the future. Chris McMahon from NAI Norwood Group is the leasing agent for the Landlord, REL Commons, LLC at all of their New Hampshire shopping centers. When Furniture Options decided to close their large store at Exeter Commons, Chris saw the perfect opportunity for a business like AirZone to take a portion of the vacant space.

NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms.  Through this network of 355 offices in 55 countries, NAI Norwood Group is able to leverage their strong local experience around the world. With our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603) 668-7000 or 100 Market Street Suite 200, Portsmouth, NH 03801 (603) 431-3001.

C-III Capital Partners to Acquire NAI Global

NEW YORK, NY, June 22, 2011 — C-III Capital Partners LLC (C-III) announced today that it has entered into a definitive agreement to acquire NAI Global, the largest and premier network of independent commercial real estate firms worldwide. C-III is led by Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. (NYSE:IFS). NAI Global will continue to operate as a separate company under its current management following the acquisition.

NAI manages a network of commercial real estate firms comprising 5,000 professionals and 350 offices in the US and 55 countries throughout the world. NAI’s network members provide a full spectrum of corporate, financial, technology and project management services.

“C-III plans to use its asset base, along with strategic acquisitions such as NAI, to create a fully diversified commercial real estate services company,” said Mr. Farkas. “This is the strategy that was successful for Insignia. C-III is led by the same team that built Insignia, and with C-III’s significantly larger asset base, I believe C-III can substantially exceed Insignia’s success,” concluded Mr. Farkas. At its height, Insignia managed $12.5 billion in assets, while today C-III’s portfolio approximates $150 billion in assets. Insignia was one of the largest commercial real estate services companies in the world when it merged with CB Richard Ellis in 2003.

C-III commenced operations with the purchase of Centerline Capital Group’s institutional real estate debt fund management and commercial mortgage loan servicing businesses in March 2010. Since that time, C-III has successfully launched mortgage origination, investment sales and title insurance businesses from scratch, and expanded its principal investment, loan origination fund management and primary and special loan servicing businesses.

“Today’s agreement represents a tremendous opportunity for NAI and our members,” said Gerald C. Finn, Chairman of NAI Global. “By teaming up with Andrew Farkas, one of the world’s leading real estate businessmen, we expect NAI will be able to significantly grow its service offerings and present new opportunities to our members.”

“We have built the world's leading commercial real estate network, but we now believe it is time to take the enterprise to a new level and add even greater value to our members and our collective corporate and investment clients. The combination with C-III will provide a depth of resources, talent and tools from which we can draw upon to accelerate our growth,” noted Jeffrey M. Finn, President and CEO of NAI Global. “Rarely do you find partners so perfectly strategically aligned as NAI Global and C-III. This is a natural fit and extremely exciting news for the industry.”
The transaction is expected to close in the third quarter of 2011. Financial terms of the transaction were not disclosed.

About C-III Capital Partners
C-III Capital Partners LLC is a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management and principal investment. The company’s principal place of business is located in Irving, TX, and it has additional offices in New York, NY, Greenville, SC and Nashville, TN.

C-III Asset Management LLC, a wholly-owned subsidiary of C-III Capital Partners, is a highly rated servicer (primary and special) of commercial real estate loans. Its clients include issuers of commercial mortgage-backed securities (CMBS) and collateralized debt obligations (CDOs), institutional lenders and other investors. C-III Asset Management is the primary servicer for approximately $20 billion and the named special servicer for approximately $127 billion of commercial real estate loans. C-III Asset Management is rated CPS 2- by Fitch and Above Average by Standard and Poor's as a primary servicer, and is one of the highest rated special servicers in the industry with ratings of CSS 1- by Fitch and Strong by Standard and Poor's.

About NAI Norwood Group
NAI Norwood Group is an affiliate of NAI Global, the world’s leading managed network of independently owned commercial real estate brokerage firms. Through this network of 355 offices in 55 countries, our extensive background and strong local contacts, we are able to assist individual corporations in negotiating leases, sales, business brokerage, investments, relocation, site selection and development. For more information please visit www.nainorwoodgroup.com. Or contact one of our offices: 116 South River Road, Bedford, NH 03110, (603)668-7000 or 100 Market Street Suite 200, Portsmouth, NH 03801 (603) 431-3001.