Terry Coyne, Bob Nosal & David Hollister, Grubb &
Ellis Company, represented the landlord, JDI Oak Tree Holdings, LLC. The
tenant, Dental One, Inc. was represented by Doug Leary, CBRE.
Tuesday, February 21, 2012
Dental One Signs Lease at Independence Office Park
Wednesday, February 15, 2012
CoyneReport - Canton's Industrial & Office Market Performance
The term "Northeast Ohio" covers a lot of ground. In an attempt to understand how the real estate market has performed of late, we will investigate the performance of one specific portion of Northeast Ohio; the Canton-Massillon real estate market. By understanding how each individual submarket is performing, we can determine greater trends that emerge in our market.
Canton, like every city in the Unites States, has been affected by the recent troubles of real estate. Unlike some cities, Canton did not experience a construction boom, which has helped to keep the vacancy rate down. In the 2000s, Canton saw the construction of 19 new industrial buildings over 20,000 SF. In the decade prior, 55 such buildings were constructed in the Canton area. New construction has been rare in recent years, and the average age of a Canton industrial building is 53 years. A handful of buildings have been renovated in recent years, but the vast majority of Canton’s housing stock has not undergone significant renovation in the past two decades.
The vacancy rate in the Canton area is approximately 13%, which is not much higher than the vacancy rate of Cleveland. In spite of the similar vacancy rates, sales prices and rental rates are lower than other portions of Northeast Ohio. The average rent in Canton is $2.90 per square foot, below Cleveland’s average of $3.37. The average sale price for industrial properties in the Canton area over the past two years was $12.46 per SF. By comparison, Cleveland’s industrial properties sold for an average of $19.99 per SF. The age of Canton’s properties certainly plays a factor in these low rates and prices, as tenants and buyers are not willing to spend as much for space that will require updating.
Canton, like the rest of Northeast Ohio, has a significant number of large (>500,000 SF) industrial buildings. As is the case in the rest of Northeast Ohio, these buildings tend to be older. Most are manufacturing buildings, and about half are single-tenant properties that are owned by the user. Republic Steel and Timken are the largest owner-users in the Canton market. California-based IRG, which focuses on redeveloping industrial space, is another large landlord in the Canton area.
Canton does not have a large number of distribution buildings, especially modern facilities with 24 foot high ceilings. When the Canton and Akron areas are grouped together, it is easier to see that a clear trend emerges with these modern distribution properties. Canton and Akron’s distribution buildings have a vacancy rate of just 2.58%, which is actually lower than Cleveland’s rate of 3.35% in similar properties. In buildings with 24’ clear ceilings and ESFR sprinklers, the Akron-Canton area has a vacancy rate of just 0.46%. This beats Cleveland’s overall rate of 0.54%. The relative rarity of these types of buildings in the Akron-Canton area helps to explain the lower vacancy. Since Canton did not see as much speculative construction as Cleveland did, the supply of this type of space is lower, which helps to keep the vacancy rate low.
Although Canton’s industrial market mostly avoided the construction boom of the past decade, the potential of the Utica and Marcellus shale in eastern Ohio looks promising for Canton. Canton’s steel companies have already seen an increase in sales of shale-related products, and as development continues this increase can be expected to last. Additionally, companies moving into Ohio in order to drill will require storage space. Canton, which offers less expensive space than most of Northeast Ohio, will likely attract the interest of these companies. As manufacturing and energy lead the way in bringing back Northeast Ohio’s economy, Canton appears well positioned to capitalize on both fronts.
Next, let’s focus on the Canton-Massillon office market. How do Canton’s office buildings compare to those throughout Northeast Ohio? What is unique about Canton’s office market, and how does it affect real estate performance?
The average office building in Canton is relatively small, at 29,338 square feet, whereas office buildings in the Cleveland area average over 55,000 SF. The smaller building size is the first notable trait of Canton’s office market. The average age of a building is 43 years, which is on par with other parts of Northeast Ohio (Cleveland buildings average around 45 years old). Price per square foot is lower in Canton than in Cleveland as well. Canton office space has recently sold for an average of $49.11 per square foot, about 14% less than Cleveland’s $56.95 per square foot. The vacancy rate in Canton is significantly lower than other parts of NE Ohio; Canton’s vacancy in office property is 12.1%, whereas other parts of Northeast Ohio have vacancy rates in excess of 22%.
What accounts for Canton’s outperforming other parts of Northeast Ohio? Part of the answer is that Canton did not experience the speculative construction boom caused by increasing real estate prices in the 2000s. Although Canton did see a fair amount of construction in the 2000s and 1990s, the busiest decade for construction was the 1980s. Construction alone does not tell the whole story. Since the average building size is much smaller in Canton, a higher percentage of buildings are single tenant and are occupied by the owner. Since building owners are taking up their own space, this effectively limits the supply of space and helps to keep the vacancy rate low. As with the industrial market, the revitalization of manufacturing and potential of shale gas will likely help to keep vacancy low in the years to come.
Canton’s office market is not the largest in Northeast Ohio, but it is certainly one of the best performing. As the local and national economy improve, it seems reasonable to expect that Canton will continue to experience low vacancy rates, and could even see some speculative construction in the years to come.
*Sources: CoStar, GENIE, CoyneReport.com
Canton, like every city in the Unites States, has been affected by the recent troubles of real estate. Unlike some cities, Canton did not experience a construction boom, which has helped to keep the vacancy rate down. In the 2000s, Canton saw the construction of 19 new industrial buildings over 20,000 SF. In the decade prior, 55 such buildings were constructed in the Canton area. New construction has been rare in recent years, and the average age of a Canton industrial building is 53 years. A handful of buildings have been renovated in recent years, but the vast majority of Canton’s housing stock has not undergone significant renovation in the past two decades.
The vacancy rate in the Canton area is approximately 13%, which is not much higher than the vacancy rate of Cleveland. In spite of the similar vacancy rates, sales prices and rental rates are lower than other portions of Northeast Ohio. The average rent in Canton is $2.90 per square foot, below Cleveland’s average of $3.37. The average sale price for industrial properties in the Canton area over the past two years was $12.46 per SF. By comparison, Cleveland’s industrial properties sold for an average of $19.99 per SF. The age of Canton’s properties certainly plays a factor in these low rates and prices, as tenants and buyers are not willing to spend as much for space that will require updating.
Canton, like the rest of Northeast Ohio, has a significant number of large (>500,000 SF) industrial buildings. As is the case in the rest of Northeast Ohio, these buildings tend to be older. Most are manufacturing buildings, and about half are single-tenant properties that are owned by the user. Republic Steel and Timken are the largest owner-users in the Canton market. California-based IRG, which focuses on redeveloping industrial space, is another large landlord in the Canton area.
Canton does not have a large number of distribution buildings, especially modern facilities with 24 foot high ceilings. When the Canton and Akron areas are grouped together, it is easier to see that a clear trend emerges with these modern distribution properties. Canton and Akron’s distribution buildings have a vacancy rate of just 2.58%, which is actually lower than Cleveland’s rate of 3.35% in similar properties. In buildings with 24’ clear ceilings and ESFR sprinklers, the Akron-Canton area has a vacancy rate of just 0.46%. This beats Cleveland’s overall rate of 0.54%. The relative rarity of these types of buildings in the Akron-Canton area helps to explain the lower vacancy. Since Canton did not see as much speculative construction as Cleveland did, the supply of this type of space is lower, which helps to keep the vacancy rate low.
Although Canton’s industrial market mostly avoided the construction boom of the past decade, the potential of the Utica and Marcellus shale in eastern Ohio looks promising for Canton. Canton’s steel companies have already seen an increase in sales of shale-related products, and as development continues this increase can be expected to last. Additionally, companies moving into Ohio in order to drill will require storage space. Canton, which offers less expensive space than most of Northeast Ohio, will likely attract the interest of these companies. As manufacturing and energy lead the way in bringing back Northeast Ohio’s economy, Canton appears well positioned to capitalize on both fronts.
Next, let’s focus on the Canton-Massillon office market. How do Canton’s office buildings compare to those throughout Northeast Ohio? What is unique about Canton’s office market, and how does it affect real estate performance?
The average office building in Canton is relatively small, at 29,338 square feet, whereas office buildings in the Cleveland area average over 55,000 SF. The smaller building size is the first notable trait of Canton’s office market. The average age of a building is 43 years, which is on par with other parts of Northeast Ohio (Cleveland buildings average around 45 years old). Price per square foot is lower in Canton than in Cleveland as well. Canton office space has recently sold for an average of $49.11 per square foot, about 14% less than Cleveland’s $56.95 per square foot. The vacancy rate in Canton is significantly lower than other parts of NE Ohio; Canton’s vacancy in office property is 12.1%, whereas other parts of Northeast Ohio have vacancy rates in excess of 22%.
What accounts for Canton’s outperforming other parts of Northeast Ohio? Part of the answer is that Canton did not experience the speculative construction boom caused by increasing real estate prices in the 2000s. Although Canton did see a fair amount of construction in the 2000s and 1990s, the busiest decade for construction was the 1980s. Construction alone does not tell the whole story. Since the average building size is much smaller in Canton, a higher percentage of buildings are single tenant and are occupied by the owner. Since building owners are taking up their own space, this effectively limits the supply of space and helps to keep the vacancy rate low. As with the industrial market, the revitalization of manufacturing and potential of shale gas will likely help to keep vacancy low in the years to come.
Canton’s office market is not the largest in Northeast Ohio, but it is certainly one of the best performing. As the local and national economy improve, it seems reasonable to expect that Canton will continue to experience low vacancy rates, and could even see some speculative construction in the years to come.
*Sources: CoStar, GENIE, CoyneReport.com
Monday, February 13, 2012
CoyneReport - A Study of Northeast Ohio's Largest Manufacturing Properties
Northeast Ohio is home to some large manufacturing sites; more than 40 manufacturing buildings totaling over 500,000 square feet. These buildings are a legacy of Cleveland’s past as a manufacturing hub. Several of these buildings have been in the news lately; the former Chrysler Stamping Plant in Twinsburg sold and is being demolished to make way for a new business park, Ford’s Casting Plant in Brook Park is undergoing demolition, and the neighboring Ford Engine Plant #2 is closing, presumably for repurposing or demolition. These properties are an example of development in Northeast Ohio, but what of the other large manufacturing sites, which make up over 40 million square feet?
The vacancy rate in these properties is just over 18%. The average building over 500,000 SF in Northeast Ohio is 58 years old. Approximately 25% of these buildings sold in the past decade, for an average of $10.79 per square foot. Of these buildings, 16 are located in Cuyahoga County, 8 in Summit County, 7 in Lorain County, 5 in Stark County, 3 in Lake County, and 2 in Geauga County.
The biggest owner-user is Ford with over 5 million square feet in 3 properties, although the numbers will likely change when plans for Engine Plant #2 are announced. RACER Trust, a product of the GM bankruptcy and reorganization, is another large owner with 3 million square feet. Lincoln Electric owns over 2 million SF in two buildings. Industrial Realty Group (IRG), a California-based company that aims to redevelop and repurpose properties, owns over 7 million square feet in 8 large buildings, making them the largest owner in Northeast Ohio.
As fewer tenants and owners require a great deal of space, several large manufacturing buildings have seen creative repurposing in the past decade. Redevelopment can be challenging, as many of these buildings predate the EPA and can have significant environmental issues. The potential risk associated with these older buildings is one of the reasons that sale prices have been lower than other industrial properties. In spite of the challenges, buyers took on these properties because the building or land offered a great deal of potential upside. The most recent example is the redevelopment of the former Chrysler Stamping Plant in Twinsburg, where the owners now hold 164 acres of industrial-zoned land in Twinsburg, a city with very little land available for development.
Many of Northeast Ohio’s large manufacturing buildings are reminders of the areas past, when manufacturing made up a much greater share of the local economy. As manufacturing and the economy continue to change, it is likely that current owners or future buyers will seek to redevelop and repurpose these buildings and land. With manufacturing making a comeback, owners will compete by adding amenities or featuring new construction in desirable locations. The market will need to adapt to stay competitive, and large manufacturing spaces will have to be a part of that process.
The vacancy rate in these properties is just over 18%. The average building over 500,000 SF in Northeast Ohio is 58 years old. Approximately 25% of these buildings sold in the past decade, for an average of $10.79 per square foot. Of these buildings, 16 are located in Cuyahoga County, 8 in Summit County, 7 in Lorain County, 5 in Stark County, 3 in Lake County, and 2 in Geauga County.
The biggest owner-user is Ford with over 5 million square feet in 3 properties, although the numbers will likely change when plans for Engine Plant #2 are announced. RACER Trust, a product of the GM bankruptcy and reorganization, is another large owner with 3 million square feet. Lincoln Electric owns over 2 million SF in two buildings. Industrial Realty Group (IRG), a California-based company that aims to redevelop and repurpose properties, owns over 7 million square feet in 8 large buildings, making them the largest owner in Northeast Ohio.
As fewer tenants and owners require a great deal of space, several large manufacturing buildings have seen creative repurposing in the past decade. Redevelopment can be challenging, as many of these buildings predate the EPA and can have significant environmental issues. The potential risk associated with these older buildings is one of the reasons that sale prices have been lower than other industrial properties. In spite of the challenges, buyers took on these properties because the building or land offered a great deal of potential upside. The most recent example is the redevelopment of the former Chrysler Stamping Plant in Twinsburg, where the owners now hold 164 acres of industrial-zoned land in Twinsburg, a city with very little land available for development.
Many of Northeast Ohio’s large manufacturing buildings are reminders of the areas past, when manufacturing made up a much greater share of the local economy. As manufacturing and the economy continue to change, it is likely that current owners or future buyers will seek to redevelop and repurpose these buildings and land. With manufacturing making a comeback, owners will compete by adding amenities or featuring new construction in desirable locations. The market will need to adapt to stay competitive, and large manufacturing spaces will have to be a part of that process.
Monday, February 6, 2012
Cleveland's Industrial Space - Demand For 24' Clear Buildings
It should come as no surprise that a significant portion of industrial space in Cleveland is outdated. Old buildings, a legacy to the manufacturing of the early 20th Century, make up a large percentage of Cleveland’s industrial space. There are many newly constructed and refitted buildings available in the Northeast Ohio area. These buildings, suitable to modern distribution and manufacturing, have ceiling heights at or greater than 24 feet. These buildings, which make up less than 25% of the market, are in high demand.
Overall, the vacancy rate in 24’ clear buildings is 3.35%. Because high ceiling height is relatively rare, there is great demand for properties with this feature. Storage racks can be built higher, saving on the per square foot costs of storing inventory. The Southeast submarket has the largest percentage of buildings over 24’ clear: the Southeast makes up nearly one-third of all 24’ clear space in Cleveland, and about 25% of all Southeast space is 24’ clear.
Some 24’ clear buildings have additional features that set them apart from the others. ESFR sprinklers, which allow for higher racking, as well as racking of more flammable materials, are one of these key features. Although very few 24’ clear buildings have the ESFR sprinkler system, those buildings that do are in demand. The overall vacancy rate of 24’ clear buildings with ESFR is just 0.54%. Although these spaces command larger rental rates than properties without these features, companies requiring high ceilings and advanced sprinklers are willing to take on higher rents.
Cleveland is still home to many older and smaller industrial buildings, but as the economy evolves, industrial space must also change to meet the demand. As demand for space increases, it seems likely that new construction will seek to meet that demand by delivering more 24’ clear buildings, included those outfitted with modern ESFR sprinklers.
Overall, the vacancy rate in 24’ clear buildings is 3.35%. Because high ceiling height is relatively rare, there is great demand for properties with this feature. Storage racks can be built higher, saving on the per square foot costs of storing inventory. The Southeast submarket has the largest percentage of buildings over 24’ clear: the Southeast makes up nearly one-third of all 24’ clear space in Cleveland, and about 25% of all Southeast space is 24’ clear.
Some 24’ clear buildings have additional features that set them apart from the others. ESFR sprinklers, which allow for higher racking, as well as racking of more flammable materials, are one of these key features. Although very few 24’ clear buildings have the ESFR sprinkler system, those buildings that do are in demand. The overall vacancy rate of 24’ clear buildings with ESFR is just 0.54%. Although these spaces command larger rental rates than properties without these features, companies requiring high ceilings and advanced sprinklers are willing to take on higher rents.
Cleveland is still home to many older and smaller industrial buildings, but as the economy evolves, industrial space must also change to meet the demand. As demand for space increases, it seems likely that new construction will seek to meet that demand by delivering more 24’ clear buildings, included those outfitted with modern ESFR sprinklers.
Monday, January 30, 2012
CoyneReport - 2011 Year-End Wrap Up
While looking back at the 2011 commercial real estate market, we first need to look at prior years to spot trends which may have occurred. Utilizing CoyneReport.com, we have reviewed the past several years in terms of trends and sales and report the following:
The total value of sales over $1,000,000 has increased every year since 2008. Large sales in 2011 topped $700,000,000, for an increase of over $200,000,000 when compared to 2010. The years 2010 and 2009 also recorded an increased value of sales year-over-year. Although past events are not a perfect predictor of the future, it is safe to say that the economic recovery has started in Cleveland’s commercial real estate market. The numbers were boosted by a handful of large transactions, including Rock Ohio Caesars’ purchases of land and the Ritz, Duke Realty’s sale of its North Olmsted office building, and the purchase of the former Chrysler Stamping Plant in Twinsburg. Although these large sales can skew the numbers, their presence does signal that some investors are willing to risk a great deal of capital in Northeast Ohio.
A closer look at the types of properties sold in 2011 reveals some interesting details. Retail properties performed surprisingly well, with over $136 million in sales in 57 transactions > $1,000,000. The only types of buildings that saw more value in transactions were office and industrial properties. A total of 30 office properties sold for just over $137 million, for an average over $4,500,000 per transaction. 52 industrial properties sold for a total of $148,220,661, averaging over $2,800,000 per sale. Owner-users were the primary purchasers of industrial space in 2011, but the strengthening market would suggest that more investment sales could take place in the near future. The amount of money in land sales, more than $120 million, would also suggest that development could increase in 2012.
Many industries are still feeling the effects of the recession, and businesses have been reluctant to hire. The amount of money spent on real estate suggests that some industries, such as manufacturing, are recovering and others, such as apartments, continue to experience success.
The total value of sales over $1,000,000 has increased every year since 2008. Large sales in 2011 topped $700,000,000, for an increase of over $200,000,000 when compared to 2010. The years 2010 and 2009 also recorded an increased value of sales year-over-year. Although past events are not a perfect predictor of the future, it is safe to say that the economic recovery has started in Cleveland’s commercial real estate market. The numbers were boosted by a handful of large transactions, including Rock Ohio Caesars’ purchases of land and the Ritz, Duke Realty’s sale of its North Olmsted office building, and the purchase of the former Chrysler Stamping Plant in Twinsburg. Although these large sales can skew the numbers, their presence does signal that some investors are willing to risk a great deal of capital in Northeast Ohio.
A closer look at the types of properties sold in 2011 reveals some interesting details. Retail properties performed surprisingly well, with over $136 million in sales in 57 transactions > $1,000,000. The only types of buildings that saw more value in transactions were office and industrial properties. A total of 30 office properties sold for just over $137 million, for an average over $4,500,000 per transaction. 52 industrial properties sold for a total of $148,220,661, averaging over $2,800,000 per sale. Owner-users were the primary purchasers of industrial space in 2011, but the strengthening market would suggest that more investment sales could take place in the near future. The amount of money in land sales, more than $120 million, would also suggest that development could increase in 2012.
Many industries are still feeling the effects of the recession, and businesses have been reluctant to hire. The amount of money spent on real estate suggests that some industries, such as manufacturing, are recovering and others, such as apartments, continue to experience success.
Monday, January 23, 2012
CoyneReport Reveals Trends/Changes in Value Across Cuyahoga County Communities
Since the Cuyahoga County Assessor’s Office has last updated property values, almost 1,000 commercial sales have taken place. Utilizing the search power of the CoyneReport.com, we have compiled a list of all these transactions. Since the Assessor and the Board of Revision use sales comps to determine property values, we thought we’d take a look to see whether local communities can expect their commercial property values to increase or decrease in the 2012 reassessment. Commercial property values provide a significant portion of many cities’ property tax revenues, so this data is relevant to school boards, town halls, and concerned citizens alike. Our study revealed some surprising results.
The City of Cleveland has had the largest positive difference in property values, with buyers paying more than $26 million over the assessed values. Other cities that saw large increases were Berea ($9,734,301), Richmond Heights ($7,891,800) and Bedford ($4,740,971). Woodmere, Parma, Beachwood, Lakewood and North Royalton also saw significant gains.
Not every city saw gains, however. Where 21 cities recorded gains, 27 saw property values slip. The good news is that the county as a whole recorded $11,040,693 in gains. Shaker Heights (-$5,766,980), Solon (-$5,691,720) and Strongsville (-$5,559,400) recorded the biggest losses. Westlake, Brooklyn and Euclid all recorded negative differences between assessed values and sales prices as well.
The news of cities showing lower property values is not surprising; the last full reassessment was conducted in 2006, with an update in 2009. The Great Recession took its toll on commercial property in Cleveland in 2009 and 2010, so it is hardly surprising that property values in some communities would be lower. The news that the county’s commercial property values have increased, albeit slightly, is welcome good news. The City of Cleveland led the way as companies and investors purchased property, and the trend of downtown revitalization continues. Although not a perfect predictor of future events, this analysis would seem to suggest that the commercial real estate market is beginning to recover from the lows of the recession.
For this and other insights into the Cleveland commercial real estate market, please visit us at CoyneReport.com.
The City of Cleveland has had the largest positive difference in property values, with buyers paying more than $26 million over the assessed values. Other cities that saw large increases were Berea ($9,734,301), Richmond Heights ($7,891,800) and Bedford ($4,740,971). Woodmere, Parma, Beachwood, Lakewood and North Royalton also saw significant gains.
Not every city saw gains, however. Where 21 cities recorded gains, 27 saw property values slip. The good news is that the county as a whole recorded $11,040,693 in gains. Shaker Heights (-$5,766,980), Solon (-$5,691,720) and Strongsville (-$5,559,400) recorded the biggest losses. Westlake, Brooklyn and Euclid all recorded negative differences between assessed values and sales prices as well.
The news of cities showing lower property values is not surprising; the last full reassessment was conducted in 2006, with an update in 2009. The Great Recession took its toll on commercial property in Cleveland in 2009 and 2010, so it is hardly surprising that property values in some communities would be lower. The news that the county’s commercial property values have increased, albeit slightly, is welcome good news. The City of Cleveland led the way as companies and investors purchased property, and the trend of downtown revitalization continues. Although not a perfect predictor of future events, this analysis would seem to suggest that the commercial real estate market is beginning to recover from the lows of the recession.
For this and other insights into the Cleveland commercial real estate market, please visit us at CoyneReport.com.
Monday, January 16, 2012
CoyneReport - Analysis of Ohio's CMBS Loans & Breakdown of 8 Counties
State of Ohio:
There are 1,088 hold CMBS loans in the state of Ohio. The total appraised value for these properties is approximately $8.5 billion, with the total current loan balance of a little more than $10 billion. The shortfall of approximately $1.5 billion is not nearly as dramatic as expected. With more than half of these loans due between 2015 to 2017, it is possible the market could turn favorably, thus closing the gap (data provided by bloomberg.com).
Almost 30% of these loans are retail anchor
developments, a little more than 20% multifamily housing, and the third largest
group is office buildings. Cap rates range from 7.02% for mixed-use to 13.77%
for health care properties. Of these, 43.91% are performing, while a little over
10% are either in REO, or with a special servicer.
When you break the numbers down further, the 8 counties of Northeast Ohio show slightly different trends. The counties include; Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, Stark and Summit. Together, these 8 counties show 318 loans outstanding. The total current loan balance is $3,644,225,489 with a total appraised value of $3,148,872,425, for a deficit of approximately $500 million. This region has a lower percentage of REO and special servicer loans - a bit less than 5%. There is a higher percentage of Retail Anchored loans; 37% vs. the 30% state average.
Next, let’s look at a breakdown by county:
There are 1,088 hold CMBS loans in the state of Ohio. The total appraised value for these properties is approximately $8.5 billion, with the total current loan balance of a little more than $10 billion. The shortfall of approximately $1.5 billion is not nearly as dramatic as expected. With more than half of these loans due between 2015 to 2017, it is possible the market could turn favorably, thus closing the gap (data provided by bloomberg.com).
When you break the numbers down further, the 8 counties of Northeast Ohio show slightly different trends. The counties include; Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, Stark and Summit. Together, these 8 counties show 318 loans outstanding. The total current loan balance is $3,644,225,489 with a total appraised value of $3,148,872,425, for a deficit of approximately $500 million. This region has a lower percentage of REO and special servicer loans - a bit less than 5%. There is a higher percentage of Retail Anchored loans; 37% vs. the 30% state average.
Next, let’s look at a breakdown by county:
Cuyahoga County: Better
statistics than the state overall
- 185 loans outstanding
- Current Outstanding loan balance: $2,519,600 vs. an appraised value of $2,099,672
- 33% of the loans are Retail Anchored
- 39% are performing
-
Interesting note - all cap rates across all property types is sub 9.75% cap
- Only 5 loans
-
$83,735,000 is the total outstanding balance, with an appraised value of only
$44,085,000 - a huge percentage difference between loan balance and appraised
value
- 92% of the loans are performing, and 91.30% are retail anchored
- The cap rate for the largest loan is about a 6% cap rate. If this cap rate moved up to a more realistic sale cap rate, the appraised values would go down, making the deficit greater
- 15 loans made
-
50% are retail anchored with an average cap rate of 5.73% ; which is a remarkably
aggressive cap rate, and perhaps rather unrealistic
- Cap rates range from the low of 5.73% up to 8.85%
- None are in REO, or with a special servicer, but - but - but - 62% are in a Grace period
-
Only 23% are performing, much lower than the state and regional average
- 13 loans
- $51,665,000 total current loan balance with an appraised value of $40,365,000 ; almost $11 million dollar short fall
- Aggressive cap rates for this older industrial county
-
75% of the loans are either with a special servicer or in a Grace period - a
much higher percentage than the state or the region - which is a bit alarming
-
Currently none of the loans
are classified as "performing"
- 1 loan currently outstanding
- Loan balance and the appraised value are the same $6,600,000
- The one loan is a Retail Anchored center with a cap rate of 6.36% cap rate and it is currently classified as "Late"
- 17 loans
- $133,900,000 Total Current Loan balance with an appraised value of $128,450,000
-
Highest percentage of loans is in the Mobile Home category - 38.85% of all
loans. This percentage is the highest percentage of Mobile Home loans of any of
the 8 counties and much higher than the state average.
-
Cap rate for the mobile homes
is 7.26 - which is a rather conservative cap rate. Mobile Home parks usually
carry an even more aggressive cap rate, so the loan balance and the appraised
value for this county may be closer to even than the numbers show.
-
About 32% are either in REO
or special servicer - a much higher percentage than the state or the region
- 21 Loans
- Total Current Loan Balance: $91,225,000 with an appraised value of $92,124,489 - one of the few counties in the black
- 38.03% are for industrial properties, much higher than the state or regional average with a cap rate of 9.22%
- 20% are performing with almost 20% either in REO or with a special servicer - again higher than the state or region
- 60 loans
- $646,900,000 Total Current Loan balance with an appraised value of $632,835,000
- More than 50% are for retail anchored centers and 22% for office buildings with cap rates of 7.27% and 9.40% respectively
- 36% are performing
- Only approximately 5% are in either REO or with a special servicer
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