Boston Industrial Shows Signs of Recovery
Boston’s industrial real estate sector is showing signs of exiting its funk of high vacancies and stagnant rents. Spaulding & Slye reported 389,000 sf of positive absorption in the first half, and CBRE/New England estimated midyear industrial absorption was up by 807,000 sf. However, Lincoln Property Co. reported that negative absorption of 354,000 sf in the first quarter overshadowed the 102,000 sf in positive absorption in the second quarter. Weakness in the market started becoming obvious in the third quarter of 2004 when the total market vacancy increased to 13.8 percent and availability rates rose to 17.1 percent.

San Jose Apartment Market Heats Up
Apartment rents in the San Jose, CA area have increased more this spring than at any time since the peak of the tech boom, according to a study by RealFacts of Novato, CA. The average monthly rent in the area was $1,414. Palo Alto was the most expensive city with an average of $1,929/month. A revitalized local economy and rising home prices are among the factors driving the rental market.

Denver Real Estate Market Remains Hot
Investors continue to plow capital into the metropolitan Denver real estate market. In the first six months of this year, $2.3 billion worth of commercial properties sold, compared to $3.2 billion in sales for all of 2005, according to a Cushman & Wakefield report. Of the $2.3 billion in transactions, roughly $450 million of the sales were portfolio deals. Private and institutional investors from the United States and abroad snapped up local properties, with five office buildings selling for more than $100 million each.

Am I ready to move into commercial real estate?

Many real estate investors spend their entire careers at the single-family home level and do very well at it. But for those who hunger for bigger deals, the answer is usually larger properties. The plusses include positive cash flow (sometimes from the moment of purchase), professional management (which becomes more affordable when dealing with multiple units), and sometimes very large profits when you sell. It’s not hard to imagine why investors want to move up to larger properties. But, along with the plusses are some minuses. You will generally have more of your own money at risk; the lease structures can be complicated, even arcane; and if there’s a recession or a problem with the property, you can have massive vacancies. My suggestion is that you start out Simple, in single-family homes, Once you have a taste for it, you can spread out into other areas of real estate. Some investors, in fact, make the transition very quickly . . . and successfully.

Office properties can be bought by you with better financing than residential properties because there are fewer buyers for office buildings. Hence, sellers are more creative in the unique financing options they offer buyers - namely you.

Office properties usually give owners fewer problems than residential properties. Why? Because office properties normally have only dult tenants. There are no children or pets to cause a variety of nuisance complaints and woes.

Office properties can have leases written such that the first $1,000 (or any other agreed-on amount) in repairs are the responsiblity of the tenant. This reduces the number of small-repair calls you get, allowing you to have a quiet life with your office building real estate holding.