311 Units Available in Indio

Marcus & Millichap has a deal for a larger investor that makes a lot of sense.

Mountain View Cottages is a well maintained and well located property in the center of Indio, California.

Location is a plus. Highway 111 is the major artery through the Coachella Valley, and features constant bus transportation less than 300 yards from the complex.  The Indio High School is a little more than a half-mile away.  There's major shopping about .3 miles away.

The other plus is the general apartment market in Coachella Valley. There is almost no building of new apartment product, and vacancy rates are about two percent. Even if there is new building, it will be of A and B quality apartments, not the working-class units most needed. In fact, Mountain View Cottages are unique in their sector of the market.

Rents in Indio are increasing sharply with the business recovery.

Vacancy rates are dropping sharply:

The property makes sense for an investor, offering a cap rate of 6.5%. Interest rates in the industry are low, by historic standards, and a buyer would enjoy "positive leverage", meaning that they make more money on the investment than the loan charges them for interest. This is not common in today's Southern California apartment market.

For more information, call me at 760 318 2876, or email me at Bruce.Haulley@marcusmillichap.com.

51 units available in Palm Springs

Palm Springs apartment complex for sale, at 6.25% cap rate, located in excellent area:




















Click on the following link to see the property's financial analysis:

https://drive.google.com/file/d/0B5UxaxpDt6d2NlpZbnh3M0JQclk/view?usp=sharing

First of all, the location is very desirable. Neighboring properties are very attractive.

Second, the property produces cash flow for the buyer. I reviewed their proforma numbers, and they're reasonable. An interested and involved owner can reach almost 13% cash on cash (considering debt reduction).

Finally, the apartment market in the Coachella Valley may be the strongest sector in commercial real estate. Multifamily is a good long-term bet, with a back-up plan to take advantage of a healthy tourism market. They're even building new condos nearby (almost unheard of). The vacant land at the extreme left of the following photo is now being used for nice condos, almost completed.

If you're an investor looking for an excellent Palm Springs apartment investment, call me for more information, Bruce Haulley 760 421 1303.

This vacant office building is "historic"?

This week, the Palm Springs Historic Society blocked the razing of the vacant office buildings on East Tahquitz Canyon.

Here are the buildings, which face the street and have huge parking filling up the block behind them.

There's nothing historic about them, that I can see.

However, the Palm Springs Historic Site Preservation Board suddenly (June 1) decided to apply for a Class I Historic Site designation, which would block Nexus the owner, from redeveloping the site. They put a 120 day hold on the demolition permit.

Here's the article in the Desert Sun:
Desert Sun article

Could this be a personal "pay-back" by some individuals against the mayor, who accepted money from the developer? 

I'll make a complete disclosure: I don't know any of the people involved, and am not involved in the development. My interest: I'd like a pleasant and vibrant Palm Springs to live in. The currently vacant buildings don't contribute to a nice environment, and I'd like to see better buildings.

Planning, Development, and Small Cities

Recently, I was invited to apply for the planning commission of Cathedral City (I had applied in the past, and they were nice enough to contact me when there were some new vacancies).

Ultimately, I decided not to apply.  Basically, I think all planning departments, in all cities, are not helping their city.

Cathedral City razed its down town in 1992. It's still torn down, twenty years later, a moon-like expanse lining Highway 111. No one has come up with a plan since.

Cathedral City is discussing an issue thoroughly: marijuana. Which is more important? Developing the core of the city around the town center and along its major thoroughfare, or marijuana sales and cultivation?

I'm not singling out Cathedral City. Palm Springs and Indio both have some significant land-planning problems. I'm pointing out that civic governments don't have the resources to plan ahead. Cities are machines, and people are the moving parts. Re-building and shaping cities for the future is vital, but not being addressed by current government structures.

The President Seems to Like the Desert

http://www.desertsun.com/story/news/2014/07/21/president-barack-obama-buy-rancho-mirage-home/12974047/

There have been a spate of news articles about Barack Obama buying a home in Rancho Mirage, California for retirement.  Personally, I think he likes the place, and actually bought a home here.

This was a post from last year, and I just saw on the TV news that Mr. Obama will be coming back, this weekend.

New Mixed Use Multifamily Project Abandoned in Palm Springs

Palm Springs may have too many developments going on at the same time. Aberdeen, a big one located on the main street Tahquitz Canyon, just gave up the ghost.

http://www.desertsun.com/story/news/2015/05/29/aberdeen-development-palm-springs/28159521/

There was opposition to the development from a neighboring retail/entertainment center over parking:

http://www.desertsun.com/story/news/2015/05/06/palm-springs-film-fest-opposes-aberdeen/70918714/

Palm Springs would benefit from more density downtown, so I'm in favor of residential and commercial developments. Most of the year, and even in the hot times, it's a great walking environment. Clustering development near the center of gravity for the city (Palm Canyon and Tahquitz Canyon) makes a lot of sense.

New Player in Desert

New Commercial Real Estate Office Opening in Palm Springs

After years of real estate recession in the Desert, a national real estate services company is opening a new office.

Marcus & Millichap, a national company that reports 1,400 investment professionals across the country, will open a sales and brokerage office in The Courtyard, at 777 Tahquitz Road, Palm Springs.  The Company offers traditional brokerage and transaction services, plus access to capital markets and intensive research resources to investors. In 2014, they report closing 1,534 transactions, more than any other company.  

The Coachella Valley has lagged slightly behind the economic recovery in the Inland Empire for the last few years. Vacancy rates in some sectors of commercial real estate are high; office, shopping centers, and big-box retail space suffer from over-supply and slow demand. There is little new construction. The Coachella Valley Economic Partnership abruptly cut staff earlier this year after a funding crisis. According to CoStar, a commercial property data service, the current commercial real estate field is spread among a number of smaller local companies, their numbers reduced by attrition between the years 2008 to 2012.

However, the economic picture is changing for the Valley.  The Inland Empire and the I-10 corridor are creating population growth for multifamily properties and logistical facilities for a growing business climate, according to Marcus & Millichap’s research.  Some sectors, such as apartments and well-located retail, are healthy and fully occupied. John Husing, a regional economics expert, said in late 2014 that the area will soon be “all the way back in terms of jobs”.  A new entry by a strong, national player demonstrates growing confidence in the local business economy by outside investors, who buy 83% of local commercial properties for investment. 

For more information, click on this link

http://www.marcusmillichap.com/