1. The Future of Commercial Real Estate Presented byLisa Carpenter

2. Introduction: Lisa Carpenter Leasing & Sales for MANSARD Commercial Properties Northland Investment Corporation &MassHousing Multi-Family / Office / Retail Buy, Sell, or Lease Tranzon Auction Divisionwww.MANSARDCRE.com 3. Executive Vice President, Shamrock Development Associates, Inc. Development / Consulting / Property and Asset Management Affordable housing and government funding www.shamrockdevelopment.net 4. Multi-Family Subgroup What we are trying to accomplish today What are your investment goals and how can you achieve them in this market Market is changing Challenges and Opportunities Using available resources Making informed decisions 5. Current economic conditions& the effect on commercial real estate Lending institutions requiring significant money down and are reluctant to lend: 70% Loan-to-Value Unemployment levels & home foreclosures high = strong apartment rental market Income challenges have restricted rent increases Jobs must increase, then markets will improve Building values are in decline due to fewer transactions / lower market values / delayed repairs Those who can hold, will hold. Buyers need to closely evaluate opportunities to avoid overspending. 6. Whats happening with Cap Rates & Values? Theyre going up, but why? Cap Rate trends and where are they headed Look at: assessed values on like buildings, NOI and income/expense detail, occupancy, and comparable sales Foreclosures and bank owned sales will continue to effect property values. Dont take someone elses figures at face value Do your homework (or hire someone to do your homework for you!) 7. Vacancy Trends: Which areas are doing better? High End/Luxury Dense Populations/Inner Cities Proximity to public transit Other states to consider Low vacancy = higher value 8. Strategies for Existing Owners: Long-term hold Refinance if possible Property is losing $ - create a disposition plan Capital projects can they be delayed / are they necessary? Look into government programs to rehab property 9. Strategies for Prospective Owners: How to know if a deal makessense When is your best time to buy Emerging opportunities: Auction Know your market area Stick to your buying rules 10. Financing your nextinvestment property Cash needs for buyers What banks are looking for: 70% Loan-to-Value Debt Service Coverage of 1.2+ Credit does matter 11. The Bank wont lend to you Other Options Assuming the sellers mortgage Seller Financing Private Investment Hard Money Lending $$$ CASH $$$ CASH $$$ CASH $$$ 12. Biggest opportunities forbuyers right NOW: Foreclosures & Bank-owned Properties Properties on the market that makesense Drive-bys: location is great, but onebuilding is empty Finding off-market deals 13. Buyers Beware! Watch out for Sellers who bought high and havent come back down to reality do the numbers make sense for YOU? Buying a property that youre not sure how to manage stick with what you know Fixer-uppers that will cost too much to repair Over extending your equity 14. The next 12 months More Commercial Loans come due or fall into default = increase in commercial foreclosures Tenants are in control occupancy will determine value Economy begins to recover slowly Employment rates begin to rebound slowly Housing markets begin to recover - slowly Banks regain assets and begin lending but dont expect no- money-down-low-interest-rate Those who truly want to transact will find a way. Others will wait for better/easier times. Which type of investor are you? 15. MANSARD can help with Buyers: find properties for sale, value analysis, negotiate sale Sellers: find buyers, value analysis, negotiate sale Owners: find tenants (office/retail/industrial), property/lease audits, market information Tenants (Office/Retail/Industrial): Renegotiate current terms, find alternatives in the market, provide comparative market information