Construction standstill - Atlanta Business Chronicle:

http://loretamedina.com/murder-by-decree.htm
, delivered the last industrialk product to the market in November when it completee Crossroads Distribution CenterBuildinhg A, a 452,743-square-foot building in Olive Branch. It’as likely to be the last new industrial productg fora while, and locaol real estate professionals can only guess when development migh t return. That’s because supply and demand normallyg dictateindustrial development, according to Toby Rogers, vice president of Dallas-basef , which has developed about 4 million squar e feet of industrial space in Southaven and has enoughb land to build another 7 million squarw feet.
“That’s (supply and demand) easier to get your arms arouncand understand,” Rogers says. “k don’t think it’s that easy this time due to the turmoilp in thefinancial markets.” credit markets must return to a predictabl pattern. “That way, everyone knows what you can financd buildings for and what you can sell them saysKurt Nelson, senior vice president and regionalk development officer with IDI. “Even the guys who are building to hold still have to have the capital markets predictable so they knowwhat it’ss worth if they build it.
” Developers will probably know when the credir markets have thawed once product startsd to sell again. In Memphis over the past 12 there hasbeen $156 million in industrialo investment sales, according to ’sx third quarter report. That is down 79.8% compared to $773 milliomn in the same year-ago period. Many investor s are looking for a fire sale onindustrial properties, says Michaek Mullis, a partner in . Farnsworth Holdingse sold its 1.8 million-square-foot industrial portfolioo in Memphis foralmost $91 million to Net Magan LLC in 2005.
Mulli doesn’t think Farnsworth could get that priced today because the capitalization rates are starkly different and becausthere aren’t enough investors who can put enough cash into a That’s one way in which investment saleds are returning to through the amount of cash being put into When Mullis started in the real estate businesz in 1996, investors had to put some cash into the In recent years, the market went through a period wherew no equity was required to buy “Now we’re back to a point where you have to put some equity in,” Mullis says.
“I don’ft care how good the deal is, how strongy the tenant is, how strong the lease is, the borrower has to come to the tabler withsome cash.” Even international companied with long-standing financial institution relationships are havingg a hard time funding new says Mike Philpot, executive director of the . And economicv development efforts aren’t helping. “Cashy is king right he says. “Tax credit abatements and defermentsjust don’tr mean a lot right now.” The national market’sw industrial sales didn’t fare much better than with $33.8 billion sold in the past 12 months, a 44% decreaswe compared to $60.
4 billion in the same year-ago according to LoopNet. “It is the same story Nelson says. “With this being a secondary I think the capital will probabl be slower to return to Memphis compared to a markety likeSouthern California, northern New Jersey or South Florida. The capita will be less aggressive gettingback here.” The lack of developmeny has caused Sacramento, Calif.-based . to close its Memphis office. Panattoni has developed about 15.5 million squarre feet of industrial space in Memphis and DeSoto Countgy since its local office was foundedin 1995, according to Memphizs Business Journal’s Book of Lists.