Archives February 2021

Given the social impact of COVID-19 and other recent worldwide events, it is no surprise that investors seek medical office buildings as a bankable, essential asset class. In addition to the relative stability these investments offer, the number of outpatient centers across the U.S. continues to increase as patients desire more convenient and more affordable access to healthcare. Here are considerations that make medical office buildings a promising investment.

1. Retention of Tenants is RegularDoctors stay at a location that suits them well because relocating usually results in a loss of 10 to 20 percent of their patient base. Furthermore, with heavy, expensive build out costs, many tenants would prefer not to move after their lease expires. When considering this property type, don’t be deterred by a shorter-term lease. Doctors prefer to renew than relocate provided their landlord is reasonable.
2. Medical Office Building Tenants Usually Maintain Strong CreditAlthough every tenant is unique in their own way, medical office building tenants tend to have strong credit. This is great for attracting other high-credit, long-term tenants as many healthcare providers prefer to be near complementary services. Medical synergy is often the reason medical professionals chose an office location.
3. Rental Rates Are Higher Than a General OfficeSmart buildings are taking over the commercial real estate industry and the healthcare sector is no exception. With changes in medical technology advancements, there could be a higher tenant improvement cost for the build out. Tenant improvements amortized into a lease rate increase the rental rate and the overall building value. In general, rental rates for medical office buildings are usually higher than a general office due to the cost of tenant improvements.
4. Low Risk Factor for the InvestorDepending on the practice size and how many doctors there are, the lease often includes more than one personal guarantee. A personal guarantee is an unsecured guarantee with no specific piece of property to be used as recourse. By having a personal guarantee in a commercial lease contract, the tenant is putting their own personal property at risk. With more guarantees occupying the lease, the risk factor is lower for the investor.
5. Commercial Banks Consider Medical Professionals BankableWhen underwriting a loan, commercial banks want to ensure that the property creates cash flow beyond the mortgage and the investor can cover all operating expenses. Commercial banks often consider medical professionals highly bankable which helps the investor secure a fair market loan.

Tips for Investing in Medical Buildings

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely updates on weekly housing trends. 

Generally, you can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage of our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like over the last week.

As we move closer to the heart of home buying season, we’re starting to see some relatively promising signs in trends among sellers. While there are still fewer newly listed homes compared to a year ago, the share of newly listed homes is rising meaning that buyers are seeing more fresh listings relative to longer-for-sale homes. Unfortunately, the total number of homes for sale continues to decline meaning fewer overall options for buyers, causing prices to rise, homes to sell quickly, and buyers to show some signs of frustration. While buyer demand growth remains high, it slowed in the last week as some buyers are likely reevaluating their options in light of these tough housing market conditions. 

Weekly Housing Trends Key Findings

Key Findings:

• Median listing prices grew at 12.9 percent over last year, notching the 27th consecutive week of double-digit price growth, easily double the rate we would see in a more normal housing environment. With home shoppers active and sellers still lacking, this upward pressure on prices is likely to remain. Still low mortgage rates in 2021 have helped offset the pain of higher prices, but mortgage rates are expected to rise later in the year, thus affordability is likely to become a top-of-mind consideration for buyers.  Tools like the mortgage calculator can help buyers understand what price and mortgage rate changes mean for their monthly payment.
• New listings–a measure of sellers putting homes up for sale–continue to fall behind the year ago pace, registering 23 percent lower this week. After the upswing in newly listed homes at the end of 2020, new listings have tread a different path in 2021, with large and consistent declines. Despite early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, and last year’s extraordinarily low new listings comparison point will mean year over year gains. One other potential bright spot for would-be homebuyers, new construction, which has risen at a year over year pace of 20% or more for the last few months, will provide additional for-sale inventory relief.
• Total active inventory continues to decline, dropping 48 percent. With buyers active in the market and seller participation lagging, homes are selling quickly and the total number actively available for sale at any point in time continues to drop lower. In January as a whole, the number of for sale homes dropped below 600,000.
• Time on market was 11 days faster than last year meaning that quick decisions are still the norm. On the plus side for today’s buyers, this means that the share of fresh listings on the market is slightly greater than it was at this time last year. On the downside, today’s for-sale homes won’t be for sale long, so buyers will need to act fast when they find a home that fits.

Data Summary

	First 2 Weeks March 2020	Week ending Jan 30	Week ending Feb 6	Week ending Feb 13
Median Listing Prices	+4.5% YOY	+13.5% YOY	+12.9% YOY	+12.9% YOY
New Listings	+5% YOY	-21% YOY	-29% YOY	-23% YOY
Total Listings	-16% YOY	-45% YOY	-47% YOY	-48% YOY
Time on Market	4 days faster YOY	10 days faster YOY	10 days faster YOY	11 days faster YOY

You can download weekly housing market data from our data page.

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Weekly Housing Trends View — Data Week February 13, 2021

Las Vegas Retail Market Report

Fourth Quarter 2020 

Inventory
Total retail inventory in the Las Vegas market area amounted to 116,879,711 square feet, up 691,407 square feet from one year ago. There is currently 892,224 square feet under construction.

Sale Activity

In the fourth quarter, 99 retail transactions closed with a total volume of $281,177,118. The 99 buildings totaled 1,009,637 square feet and the average price per square foot equated to $306.55 per square foot. That brings the total for the 2019 calendar year to 302 transactions totaling $656,465,854. The total square footage sold was 2,851,038 square feet for an average price per square foot of $262.10. The average Cap Rate was 5.9%

Tallying all retail building sales.

Mark of a Market.

One of the largest transactions (excluding the resort corridor and specialty properties) that has occurred within the Las Vegas market is the sale of Crossroads Commons at 8825-8975 W. Charleston Blvd, as part of a 2 property portfolio sale. This 157,152 square foot retail building sold for $46,601,546 or $296.54 per square foot. The property sold on 12/23/2020. The Buyer was SF Crossroads, LLC. The Seller was Panther Crossroads Commons LLC.

Fourth Quarter 2020 Las Vegas Retail Market Report

Have you ever started a search on a listing site only to find out that the results are only visible to registered or paying members? Some commercial real estate listing websites require you to register or pay for membership in order to receive an agent’s email address or even simply to get in touch with them. At QuantumListing, we understand how it feels to search for commercial real estate space and, quite literally, reach roadblocks. We understand these pain points; that’s why QuantumListing’s website visitors can search our site completely for free with no paywall or registration required. 

User experience is a high priority at QuantumListing. Our goal is to make it easy for you to get in touch with commercial real estate professionals within the QuantumListing network. To get started, simply go to the QuantumListing home page and fill in the first box that says “Enter Location”  below “Search all our Users’ Listings for Free.”

Tips for Search Success

After you enter the location and click the red search button, there are a variety of ways to proceed. We wanted to share some tips and best practices with you as a guide to your commercial real estate searching success: 

Tip 1: Once you’ve entered your search location and see the initial results, we recommend that you narrow or expand the search by clicking the green SEARCH FILTER button. Expand the location’s radius in order to view a larger selection of listings. This is especially helpful when you search a small town and want to explore the surrounding area. 

For example, when you search Ridgefield, Connecticut (which happens to be the location of QuantumListing’s new headquarters), there are 13 listings. When you expand the radius to 20 miles, there are now almost ten times the amount of listings (126) all within a reasonable driving distance. 

Tip 2: While you can certainly start your search with a particular city in mind, you can also cast a wider net. For example, QuantumListing visitors and members often search one of our 50 U.S. states by simply typing the state name into the search bar and clicking on the first search criteria that populates.

Once you do this, you can narrow down your search by selecting an asset type like Office or Retail. You can also select whether you are looking to rent space or buy. This is also a good place to specify any requirements such as price or square feet.  

When searching at the state level is too wide of a range, you can type a county name and proceed with the same steps as described above! To use our example of Ridgefield again, typing in Fairfield County will bring all the listings within that area. 

Tip 3. Another helpful resource is our state search page, which you can check out by clicking here. From here, you can see all 50 states, which is a great launching point for a search. If you are wondering why many listings and brands are highlighted in green boxes at the top of the search pages, you can find out more by reading about our On Demand Marketing Center. 

Tip 4: A fourth resource for you to start your QuantumListing search is to look at the second box on the homepage underneath where it says “Create a search request and/or get help from a professional.” From here, all you need to do is select the Asset and Trade Type (for example, Office for Lease) from the drop down menus and then you can fill out the form to stay up to date on your search requests!

Once You Click on a Listing, What Do You Do Next?

Once you click on a listing card and go to its detail page, there are several ways to get in touch with the agent. When you first arrive on the listing detail page, a pop-up will appear after 10-15 seconds asking if you would like additional information from the broker. Simply type in your contact information so that the QuantumListing member can contact you directly. They will receive notice that you are interested in their property and our team will also be in touch with them to follow up.

You can also click the blue “Contact the Agent,” button which produces the same pop-up window as described above. From this lead form, you can also subscribe to our email list in order to stay up to date on our weekly email blasts, which include our listings. 

Call or Email the Listing Agent with a Click

Please note that you can call or email the agent directly. In fact, when you click on their email address, a pre-populated email template and message will appear from your computer or phone’s primary email platform.

Lastly, we are firm believers in the power of the network effect which is why we have enabled QuantumListing to sync with social media. When you click the red share button below a listing, you can easily share the listing to Facebook, Twitter, and LinkedIn. Did you know LinkedIn is the Largest Commercial Real Estate Network In The United States?

All of the tips described above show how easy it is for you to get in touch with our network of commercial real estate professionals without even registering for a QuantumListing account.

We look forward to sharing more tools with you in the next post, where we will focus on how to take your commercial real estate search to the next level. Please keep in mind that when you are already logged in to QuantumListing, you can search for listings anytime from the search bar at the top of every page. 

Sneak Preview

You can view all of our members’ active listings without registering for an account. However, the next set of tips will focus on the advantages and features our Basic Members (free registration) and Premium Members get in order to take their commercial real estate search to the next level. To see a preview of this information, hover over the tool list on the right hand side of the listing page to see some of the different mechanisms to help you along the way to finding your next space. 

https://quantumlisting.com/blog/how-to-search-commercial-real-estate-on-quantumlisting

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. 

Generally, you can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage of our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like over the last few weeks.

Home sales and prices continue to surge ahead in the new year. Buyers entering the housing market in 2021 will need to be prepared and decisive in order to be successful in an environment where homes are selling fast and prices are rising.  Fortunately, still low mortgage rates continue to help offset the sting of higher home prices, for now, making finding the right property amid scarce options and making an offer quickly, the top challenges.

Weekly Housing Trends Key Findings

Key Findings:

• Median listing prices grew at 14.4 percent over last year, notching 24 consecutive weeks of double-digit price growth. With demand still high and supply still limited, this trajectory seems unlikely to change in the near term. In 2020, lower mortgage rates have blunted the otherwise dampening effect that higher prices could have on buyer demand. But as mortgage rates transition from falling to gradually rising, the math changes. If mortgage rates trend upward, as we expect, affordability is likely to become a bigger challenge in 2021.
• New listings continue to fall behind the year ago pace–registering 21 percent lower this week. After the upswing in new listings at the end of 2020, momentum continues to be lacking in 2021. While the new listings trend is noisier than active inventory, the persistent declines observed in the new year signal that selling may not have been high on many home owners’ new year’s resolution lists. An uncertain environment doesn’t generally inspire consumers to make big decisions, and on top of the unknowns surrounding COVID-19 and its trajectory, government policies to support the economy and battle the health crisis continue to unfold as the new Congress and administration set to work.  Looking forward, the surge in new cases is abating, and we’ve seen declines in new listings shrink over the last 4 weeks.  We expect new housing supply to continue to improve, if unevenly, as we move through the year, and while new listings are struggling to grow, new construction will provide some relief.
• Total active inventory continues to decline, dropping 43 percent. A greater decline in overall inventory than in new listings is consistent with rising home sales and fast-selling homes that do not remain for sale for long.  
• Time on market was 9 days faster than last year meaning that buyers have to make quick decisions to succeed. Although buyers have more information than ever available in their home search journey, they’ll need to marshall that information into actionable insights so that they can act with haste when the home that’s right for them comes up for sale. 

Data Summary

	First 2 Weeks March 2020	Week ending Jan 9	Week ending Jan 16	Week ending Jan 23
Median Listing Prices	+4.5% YOY	+15.4% YOY	+15.0% YOY	+14.4% YOY
New Listings	+5% YOY	-26% YOY	-22% YOY	-21% YOY
Total Listings	-16% YOY	-41% YOY	-43% YOY	-43% YOY
Time on Market	4 days faster YOY	10 days faster YOY	9 days faster YOY	9 days faster YOY

You can download weekly housing market data from our data page.

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Weekly Housing Trends View — Data Week January 23, 2021