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Welcome to the Clay & Company Blog

Clay & Company is a Houston-based commercial real estate brokerage, investment, and auction company serving the needs of governmental agencies, financial institutions, insurance companies, and individuals 
throughout the State of T
exas.

Our regularly updated blog covers local and national news, events, and happenings affecting Texas and the commercial real estate industry.

Yearly Archives: 2009

Houston through the Years

One of Houston’s most comprehensive real estate blogs, Swamplot, recently highlighted Google Earth’s newest feature where you can view historical aerial images. It currently dates back to 1978 allowing you to explore the city’s growth over the past 30 years. Read and see more at Swamplot.

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Photo of Astrodome area in 1978 from Google Earth via Swamplot

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RECON: Texas’s Existing Home Sales Climb, Prices Inch Up

In Houston we are lucky to be close the Real Estate Center at Texas A&M University. The Center is the nation’s largest publicly funded organization devoted to real estate research and conducts in depth research on financial, socioeconomic, public policy, trade, legal, land use and local market analysis issues related to real estate.

The November 24 edition of the Real Estate Center’s Online Newsletter highlights the climbing home sales in Texas. Although the following report focuses on residential real estate, it is beneficial to look as it provides an indicator of the overall market.

From RECON, November 24, 2009 A total of 19,347 existing single-family homes were sold in Texas last month, a 15 percent increase from October 2008, according to MLS data compiled by the Real Estate Center at Texas A&M University.

The median price rose 1 percent to $143,300 during the same period, and the state finished the month with a 6.9-month inventory of existing homes.

Here is how select Texas cities fared in October (data current as of Nov. 24, 2009):
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Additional home sales data for these and other major Texas cities are available on the Center’s website.

At the national level, the National Association of Realtors reported this week that single-family home sales rose 9.7 percent to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September. That was 21.4 percent above the October 2008 pace. The median price was $173,100 in October, down 6.8 percent from a year ago.

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Triple-Net Leased Real Estate a Smart Investment Alternative

729163_69445788In unfamiliar times many of our clients look to us for guidance on real estate investing as times are changing and the market appears risky. Real estate investments are a great means of achieving good returns on your money and there are currently many attractive acquisition opportunities for smart investors.

Although much of our advice comes from being brokers for 25 years, we can also provide first-hand knowledge as buyers ourselves. As buyers we are narrowing in on long-term, triple-net leased investments for our portfolio.

A triple-net lease holds the tenant responsible for rent as well as all property operating expenses including taxes, insurance and maintenance. This type of lease is favored by investors – including ourselves – because the landlord’s responsibilities are significantly reduced. Triple-net-leased investments are a good alternative for providing cash flow while surrendering the responsibilities of management and maintenance. When evaluating this type of deal, it is important to look closely at the tenant and assess their current and future financial strength in order to be assured of the tenant’s ability to meet the terms of the lease.

The analysis of a net-leased investment concentrates much more heavily on the lease rather than the building and land. However, it is still important to assess the physical real estate as you would in any transaction. A strong location, land size, quality construction, replacement costs, and the ability to re-lease the real estate are essential factors to consider.

Many investors use a capitalization rate to determine the value of an investment. Although it should not be the only measure of an investment, capitalization rate is a simple formula that calculates the ratio between the purchase price and the net operating income. By dividing the purchase price into the net operating income you arrive at a capitalization rate that will help you determine value relative to similar properties.

Each individual should be sure that a triple-net investment meets the specific goals of the investor. Complete due diligence, establishing financing, and understanding any tax benefits are all critical before committing to any long-term investment. But with proper understanding of some critical components – type and length of lease, tenant strength, the physical real estate/location, and cap rate – an investor can be sure that a long-term triple-net leased deal is a sound investment.

Contact us for more information on this and other types of real estate investing.

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Welcome to Clay & Company’s Blog

Clay & Company is a Houston-based commercial real estate auction, brokerage and investment company serving the needs of governmental agencies, financial institutions, insurance companies, and individuals throughout the State of Texas since 1991.

Our regularly updated blog covers local and national news, events, and happenings affecting Houston’s commercial real estate scene. Check out our website, subscribe to our blog, and follow us on twitter for informative updates on Clay & Company and Houston commercial real estate.

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