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K W Commercial Lubbock

Serving West Texas

www.lubbockcommercialre.com

1st Quarter 2012

Industrial - Land - Multifamily - Office - Retail


What is a 1031 Exchange? Thanks to IRC 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes. IRC 1031 (a) (1) states: “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.” To understand the powerful protection a 1031 exchange offers, consider the following example: * An investor has a $200,000 capital gain and incurs a tax liability of approximately $70,000 in combined taxes (depreciation recapture, federal and state capital gain taxes) when the property is sold. Only $130,000 remains to reinvest in another property. * Assuming a 25% down payment and 75% loan-to-value ratio, the seller would only be able to purchase a $520,000 new property. * If the same investor chose to exchange, however, he or she would be able to reinvest the entire $200,000 of equity in the purchase of $800,000 in real estate, assuming the same down payment and loan-to-value ratios. As the above example demonstrates, exchanges protect investors from capital gain taxes as well as facilitating significant portfolio growth and increased return on investment. In order to access the full potential of these benefits, it is crucial to have a comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term like-kind– often mistakenly thought to mean the same exact type of property– can reveal possibilities that might have been dismissed or overlooked. Taking time to learn more about the 1031 exchange process can be very beneficial to your next real estate transaction.

Before you sell any real estate holdings call Julie Childs or David Bloodworth to discuss the benefits a 1031 exchange could provide to you. The above information was provided by Asset Preservation, Inc.

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REALTOR Mag: Commercial Real Estate Vacancy Rates Improve According to the National Association of REALTORS®’ quarterly commercial real estate forecast, all of the major commercial real estate sectors are seeing improved fundamentals, but multifamily housing is becoming a landlord’s market, commanding bigger rent increases. These trends also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey. Lawrence Yun, NAR chief economist, said vacancy rates are improving in all of the major commercial real estate sectors. “Sustained job creation is benefiting commercial real estate sectors by increasing demand for space,” he said. “Vacancy rates are steadily falling. Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest.” NAR forecasts commercial vacancy rates over the next year to decline 0.4 percentage point in the office sector, 0.8 point in industrial real estate, 0.9 point in the retail sector and 0.2 percentage point in the multifamily rental market. “Household formation appears to be rising from pent-up demand,” Yun said. “The tight apartment market should encourage more apartment construction. Otherwise, rent increases could further accelerate in the near-to-intermediate term.” The Society of Industrial and Office REALTORS® shows a notable gain in its SIOR Commercial Real Estate Index, an attitudinal survey of 297 local market experts. The SIOR index, measuring the impact of 10 variables, jumped 8.3 percentage points to 63.8 in the fourth quarter, following a gain of 0.6 percentage point in the third quarter. The index remains well below the level of 100 that represents a balanced marketplace, which was last seen in the third quarter of 2007. Most market indicators posted advances in the fourth quarter, but 71 percent of respondents said leasing activity is below historic levels in their market — an improvement from 83 percent in the third quarter. Only 29 percent report there is ample sublease space available. Office and industrial space remains a tenant’s market — 87 percent of participants feel that tenants are getting a range of benefits ranging from moderate concessions to deep rent discounts. Construction activity is still low, with 95 percent of experts reporting it is below normal, and 83 percent said it is a buyers’ market for development acquisitions; prices are below construction costs in 78 percent of markets. Participants are broadly expecting stronger conditions for the current quarter, with two out of three expecting market improvement. NAR’s latest Commercial Real Estate Outlook offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.

Office Markets Vacancy rates in the office sector are projected to fall from 16.4 percent in the current quarter to 16.0 percent in the first quarter of 2013. The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5 percent; New York City, at 10.0 percent; and New Orleans, 12.4 percent. After rising 1.6 percent in 2011, office rents should increase another 1.9 percent this year and 2.4 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year. Industrial Markets Industrial vacancy rates are likely to decline from 11.7 percent in the first quarter of this year to 10.9 percent in the first quarter of 2013. The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.8 percent; Los Angeles, 4.9 percent; and Miami at 7.6 percent. Annual industrial rent is expected to rise 1.8 percent in 2012 and 2.3 percent next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013. Retail Markets Retail vacancy rates are forecast to decline from 11.9 percent in the current quarter to 11.0 percent in the first quarter of 2013. Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 5.1 percent; and Long Island, N.Y., at 5.4 percent. Average retail rent should rise 0.7 percent this year and 1.2 percent in 2013. Net absorption of retail space is projected at 9.9 million square feet this year and 23.9 million in 2013. Multifamily Markets The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.7 percent in the first quarter to 4.5 percent in the first quarter of 2013; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents. Areas with the lowest multifamily vacancy rates currently are New York City, 1.8 percent; Minneapolis and Portland, Ore., each at 2.5 percent; and San Jose, Calif., at 2.7 percent. After rising 2.2 percent last year, average apartment rent is expected to increase 3.8 percent in 2012 and another 4.0 percent next year. Article provided by REALTORMag Online Daily Real Estate News/Friday, February 24, 2012

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


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Congratulations!!! We want to congratulate Synergy Home Care (7202 Joliet), A to Z Coins (3304B 82nd St.), Tully’s Corner Store( 1025 University) & Powerhouse Nutrition (1017 University) on their recent openings and Becky Castro on the sale of her building. KW Commercial was instrumental in completing all five real estate transactions.

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


Featured Retail Properties For Lease Spectra Centers 6319 82nd St and 1803 7th Spectra Southwest is a Super Wal-Mart shadow anchored center just east of 82nd and Milwaukee. There are approximately 30,000 square feet in the center with approximately 9,800 available in 4 suites. Current tenants include Baskin Robbins Ice Cream, Sally’s Beauty Supply, Dollar Tree, LA Nails, The Cakery, Cash Store, Fantastic Sams and GameStop. Available Suites Suite 201 - 1,600 SF Suite 301 - 1,600 SF Suite 601 - 5,000 SF Suite 901 - 1,600 SF

Spectra Southwest Spectra Tech is a Super Wal-Mart shadow anchored center at 7th and Avenue R. There are approximately 30,000 square feet in the center with one 945 SF suite available. Current tenants include Cheezies Pizza, GameStop, Sally’s Beauty Supply, Top Nails, WingStop, Lucky Chen’s Asian Food, Check’n Go, Edward Jones, CATO and Payless Shore. Available Suite Suite 301 - 945 SF

Spectra Tech Industrial

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Featured Properties For Sale Putman Concrete: Business, Property and Equipment 603 San Antonio St. Marfa, Texas 7342 W 19th Street—Concrete Business with permits in place. Includes: Business, Land, Buildings & Equipment excluding property listed below. $2.5 million 7401 W 34th Street— 8.91 acres of land & 20,463 SF building with fenced yard and rail access. $500,000 7401 W 19th Street—163,786 SF of land with no improvements. $90,000

603 San Antonio St. Marfa, Texas This property is an approximately 7,392 SF stand alone building which was a former retail space. There is an overhead door and one restroom. It has some off street parking and frontage along San Antonio Street which is US Highway 90. The building could be divided almost in half with separate entrances. The building would work well for any type of retail use as well as for an art studio with gallery space. It is located next door to the recently remodeled Thunderbird Motel and is within blocks of the downtown art galleries and restaurants. $248,000 ($33.54 Per Square Foot)

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RETAIL BUILDING

RETAIL SPACE

ED S LEA

RETAIL BUILDING 603 San Antonio Marfa, TX 7,300 SF For Sale $240,000

ULOFTS RETAIL 1001 University Ave 1,050 SF For Lease $14.50 PSF NNN

RETAIL CENTER

RETAIL SPACE

D L SO LUBBOCK COMMONS 6319 82nd Street 12,102 SF Sold

Industrial

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Land

SPECTRA TECH 7TH AND Avenue R 945 SF For Lease $22.00 PSF NNN -

Multifamily

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RETAIL SPACE

OFFICE/WAREHOUSE

OFFICE/WAREHOUSE 7401 34th ST 1,023 SF Off-19,440 SF Wrhse-9 acres For Sale $500,000

SPECTRA SOUTHWEST 6319 82ND St 1,600 SF For Lease $18.00 PSF NNN

OFFICE BUILDING

DEVELOPMENT LAND LUBBOCK

Lubbock CC Hillcrest CC

SUBJECT

OFFICE BUILDING 2124 15th Street 1860 SF For Lease $ 8.00 PSF

CORNERSTONE ACREAGE N University and FM 2641 6 - 10.01 acre tracts For Sale Call for Details

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


RETAIL SPACE

LAKE STORE

SPECTRA SOUTHWEST 6319 82ND St 1,600 SF For Lease $18.00 PSF NNN

LAKE ALAN HENRY STORE Justiceburg, TX 4,000 SF For Sale $300,000.00 OFFICE LAND

RETAIL SPACE

ED S A E L

D L SO

ULOFTS 1001 University Ave 1,420 SF For Lease $12.50 PSF NNN

1602 Texas Avenue 9,425 SF Office Building For Sale $150,000 Industrial

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WAREHOUSE

LEASED WAREHOUSE UNITS 8602 Ashe 28 units For Sale $1,200,000 RETAIL SPACE

ULOFTS 1001 University Ave 3,000 SF For Lease $12.50 PSF NNN

RETAIL SPACE

RETAIL SPACE 3444 W Loop 289 6,400 SF For Lease $11.00 PSF RETAIL BUILDING

FORMER OIL CHANGE 3804 50th ST 2,046 SF For Lease $15.00 PSF Modified

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


OFFICE BUILDING

RETAIL SPACE

D E S A LE

ENCLAVE OFFICE BUILDING 5012 50th Street For Sale Call Agent for Price

RETAIL SPACE 57th and Slide 2,788 SF Leased

LAND

RETAIL SPACE

D L O S

Subject Property

DEVELOPMENT LAND 82nd and Alcove 164,657 SF For Sale $975,484 $5.92 psf Industrial

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Land

ULOFTS RETAIL 1001 University 1,548 SF For Lease $15.50 PSF -

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RETAIL/OFFICE BUILDING

MULTI FAMILY

TOLEDO COURTS APARTMENTS 306 Toledo Avenue 70 Units For Sale $2,000,000

RETAIL/OFFICE BUILDING 707 Houston - Levelland, TX For Sale $59,000 LAND

RETAIL SPACE

SUBJECT

4th Street

DEVELOPMENT LAND 5902 4th Street 152,600 SF For Sale $763,000 5.00 PSF

SPECTRA SOUTHWEST 6319 82ND St 5,000 SF For Lease $18.00 PSF NNN

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


FREESTANDING RETAIL BUILDING

RANCH LAND

LD O S

MULESHOE HUNTING RANCH South of Muleshoe-West of HWY 84 2600 acres For Sale $ 1,947,675 $750 per acre

Former A&B Barber 5144 69th St 1,000 SF For Sale $90,000

RETAIL BUILDING

LAND

D L SO

COMMERCIAL LAND 7401 19th St 3.76 Acres For Sale $90,000 Industrial

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Land

FREE STANDING RETAIL BUILDING 2513 82nd St 6,656 SF For Lease $15.00 PSF NNN -

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RETAIL SPACE

OFFICE BUILDING

t c a r t n o C r e d Un SPECTRA SOUTHWEST 6319 82ND St 1,600 SF For Lease $18.00 PSF NNN

OFFICE BUILDING 4913 S Loop 289 17,928 SF For Sale $1,695,000 LAND

DOWNTOWN REDEVELOPMENT

D E S A LE ENCLAVE OFFICE BUILDING 5012 50th Street 3,400 SF For Lease $14.00 PSF Full Service

Green/Cobb Building 1215 Avenue J 70,430 SF For Sale $500,000

4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


OFFICE BUILDING

RETAIL SPACE

ED S A E L 2218 BROADWAY 2,858 SF Office Building For Sale $241,000

RETAIL SPACE 3442 W Loop 289 2,300 SF For Lease $11.00 PSF PUTMAN CONCRETE

PUTMAN CONCRETE 2 BATCH PLANTS, LAND, BUILDINGS ROLLING STOCK, EQUIPMENT $2,500,000 Industrial

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Land

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Multifamily

MULTI FAMILY

LYNNWOOD TOWNHOMES 306 Toledo Avenue 314 Units For Sale $63,000,000 -

Office

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Retail


RETAIL BUILDING

D E S A LE

Leasing Brokerage Investments Land Development Tenant Representation Lease vs. Buy Analysis

2156 50th Street 4,850 SF Retail Building Leased RETAIL CENTER

ED S A E L LUBBOCK COMMONS 6319 82nd Street 2256 SF Retail Space Leased 4747 S. Loop 289 Suite 110, Lubbock, TX 79424 - office 806.771.7701 www.lubbockcommercialre.com


COMMERCIAL REAL ESTATE QUESTIONS ?

Retail Office Land Industrial Multi-Family Hospitality Shopping Centers Net Investment Properties Special Purpose

David Bloodworth, CCIM Managing Director/Commercial Brokerage and Leasing - Retail and Office 806.771.7701 office 806.632.3244 cell 806.771.7700 fax dbloodworth@kw.com

Julie Childs Commercial Brokerage and Leasing - Retail and Office 806.771.7701 office 806.441.1481 cell 806.771.7700 fax jdchilds@kw.com

KW Commercial = Answers Industrial

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1st Quarter 2012 Newsletter