Archive for the 'Investment' Category

As a result, rental vacancy rates are dropping and rental rates are increasing.  Read the entire article in today’s Burlington Free Press.

Looks like multi-family properties are where it’s at if you’re looking for a solid commercial property investment.  Check out a few of Redstone’s Multi-Family property listings below:

457 St. Paul Street, Burlington

389 Riverside Avenue, Burlington

105 Hyde Street, Burlington

86 Pearl Street, Essex Junction

373 Vine Street, Northfield

233 Main Street, Northfield

246-250 Main Street, St. Albans

7 Alden Place, Vergennes

83 Hickok Street, Winooski

45 West Street, Winooski

Redstone recently accepted a Smart Growth Award from an organization doing important work across the state called Smart Growth Vermont.  So, what is Smart Growth?

According to the Smart Growth Network, the Principles of Smart Growth include:

• Creating a range of housing options and choices, providing quality housing for people of all income levels;
• Creating walk-able neighborhoods;
• Encouraging community and stakeholder collaboration in growth decisions;
• Fostering distinctive, attractive communities with a strong sense of place;
• Making development decisions predictable, fair and cost effective;
• Mixing land uses;
• Preserving open space, farmland, natural beauty and critical environmental areas;
• Providing a variety of transportation choices;
• Strengthening and directing development towards existing communities;
• Taking advantage of compact building design.

http://www.smartgrowth.org/about/principles/default.asp

From Smart Growth Vermont

“How individual communities plan for and manage land use and development will determine Vermont’s economic, social and environmental well-being.  The state’s distinctive sense of place is largely the result of its cultural and economic heritage. This heritage created, and maintained, the state’s historic landscape of compact cities and villages surrounded by working farms and forests. Unfortunately, this landscape is being incrementally lost to a pattern of unplanned, inefficient development.  The result is that our farms, forests and opens spaces are being replaced by strip malls and residential subdivisions scattered far outside of our traditional centers.

At Smart Growth Vermont, we believe that for Vermont to grow and thrive we need to carefully integrate growth, environmental protection and economic opportunities into our local planning framework.  This will require the participation of citizens, local and state officials, developers, business leaders and non-profit organizations.  Our future depends on careful analysis, dialogue, cooperation and leadership.”

http://www.smartgrowthvermont.org/learn/

At Redstone we believe strongly that Vermont’s historic settlement pattern and sense of place are essential elements to the quality of life we all enjoy and the continued success of our state.  We focus our development efforts in villages and downtowns; we rehabilitate historic structures; we re-purpose pre-existing buildings; and we build new buildings in infill locations.  We’re proud to be the recipients of two awards from Smart Growth Vermont for our Marble Works Residences project in 2007 and this year for the initial phases of the BankNorth Block redevelopment.  In both cases, we had a number of project partners involved and could not have achieved success without tremendous collaboration.

The redevelopment of the BankNorth Block is a prime example of Smart Growth at work in Vermont.  Burlington presents our state’s greatest smart growth opportunities as well as its greatest challenges with incredibly high demand for residential and commercial space; very little developable land; and tight urban sites to work with.  Smart Growth in Burlington requires a collaborative approach bringing the private, public and non-profit sectors together to achieve success.  Along with our project partners Housing Vermont, Champlain Housing Trust, Farrell Real Estate and Mary Farrell, we’re pleased to accept this award for the initial phases of the BankNorth Block redevelopment; we hope that Smart Growth advocates statewide will be supportive of the final phases of this dynamic urban infill and adaptive reuse project.

http://www.smartgrowthvermont.org/help/awards09/awards07/

http://www.smartgrowthvermont.org/help/awards09/2009smartgrowthawards/

22 Pleasant Street, Randolph, Vermont

Stand alone commercial building in downtown Randolph with 1,000 SF upstairs apartment. Current location of the 3 Bean Café, this space offers great visibility, plenty of parking, and enormous potential for the right buyer. New hardwood floors upstairs and down, this property is priced to sell!

http://www.redstonevt.com/Retail-Residential-Investment-Multi-Family-For-Sale-VT-Commercial-22-Pleasant-Randolph-Vermont/

61 US Route 4, Mendon, Vermont

17 room motel plus owner’s residence (with motel office, lobby, coffee shop), swimming pool with shed, and storage shed all situated on a little over 5 acres. Wonderful views surround this mountain road motel which is less than 3 miles from Killington and less than 2 miles from Pico Ski Resorts. Whether you are new to the motel business or a seasoned veteran, you can argue that the location presents a wonderful opportunity. The property is being sold in AS/IS condition. Showings will be by appointment only and will be conducted the week prior to bids being due. For a full package on the property with a description of the Bid Process, please call or e-mail Peter Yee.

http://www.redstonevt.com/Business-Motel-For-Sale-Bid-Auction-VT-Commercial-Route-4-Mendon-Vermont/

45 Avenue D, Williston, Vermont

Offering good visibility and curb appeal! A 10,645 SF mostly air conditioned commercial building, currently Kittredge’s showroom space. Layout currently consists of a large showroom, a few private offices, admin space and warehouse with a dock. 13’-20’ ceiling height, 400 amps 3 phase power, built around 1976. Available November 1st.

http://www.redstonevt.com/Office-Warehouse-Industrial-For-Sale-For-Lease-VT-Commercial-45-Avenue-D-Williston-Vermont/

52 River Road, Stowe, Vermont

Unique development/investment opportunity in Stowe, offering 19,823 SF of warehouse/retail/office and storage space on 5.66 acres of land. Perfect for light manufacturing, warehouse, retail, or office space. Located in serene country setting, yet conveniently located literally minutes from downtown. Plenty of parking as well as a 50-year lease on additional parking lot. Waterfall offers micro-hydro power potential. 3-phase power, municipal water and sewer serves the property. This is a must see!

http://www.redstonevt.com/Land-Office-Warehouse-For-Sale-VT-Commercial-52-River-Stowe-Vermont/

With the current state of our economy, many people are taking the ‘wait and see what happens’ approach to making many investments or financial commitments.  While lines of credit require a bit more than they once did in the times of zero-down financing, it is still a great time to invest, particularly in real estate.  Low interest rates, tax incentives, from first time home buyer (here) to energy efficiency credits (here), are not only available, but accessible.  

However, many people are still left wondering what they should be looking for when investing?  As a general rule, a good investment is one meets the objectives of a specific investor or investors, regardless of what the asset is.  Any investment has certain characteristics that include liquidity, marketability, and risk, each having higher or lower degrees of importance and impact on any given investment scenario.  For instance, if you want to invest in something that has high liquidity, meaning the ability to turn your investment into cash quickly with no loss to your principle, real estate may not be the best vehicle to meet your objectives.  Further, when speaking about real estate investments, you are speaking about an equity type investment, where the investor is placed in a position of ownership.   Three characteristics that favor, and should be considered when making a real estate investment are:

Rate of Return:  Referred to as ‘Yield’, it is simply the percentage return on each dollar invested for each period invested.  This can be done on a pre-tax as well as a post-tax basis.

Tax Impact:  See above, as well as capital gains taxes on certain types of income, and tax deferments

Leverage: The use of borrowed funds to finance some of the purchase price of an investment.  The ratio of borrowed funds to total purchase price is referred to as Loan to Value ratio, or LTV.  A higher LTV means a greater amount of leverage.  Real estate transaction can often be highly leveraged when comparing them to other investment types.

Depending on what your investment objectives are, generally speaking, real estate has real potential for a high rate of return and can in many scenarios have a favorable tax impact.  This coupled with the ability to finance a significant percentage of the cost, make real estate, commercial and residential alike, a great option for a long term investing. 

Self directed IRA’s continue to draw interest given the unknowns of market investment. For some individuals the ability to utilize IRA contributions into a more controlled environment like real estate might seem a better risk with the upside of owning real estate for the future. A larger number of baby boomers are becoming eligible to access IRA’s but perhaps really don’t need to do so at this time do to the extension or change of career or retirement objectives. A self directed IRA could provide interesting alternatives for that retirement nest egg.  http://www.investorloft.com/category/Self-Directed-IRA-Learning-Center.shtml offers additional information on this option. Check it out!

Investing in real estate is one of the best ways to diversify your portfolio.  Over the years real estate has proven to be an effective component for investors looking for long term returns.  One of the difficult things about investing in real estate is the hands-on nature of its management.  Real estate requires the property owner to either be engaged in day-to-day operations or to hire a third party manager.  Tenancy-in-common (TIC) investments allow investors who like the idea of real estate but aren’t interested in management to buy a percentage share of a larger asset.  For example, in a TIC investment, the Sponsor of the project will put together a group of investors who will, in essence, own the property together.  The property is professionally managed by an asset specialist and returns are realized based on the specific project.

In our weekly Redstone brokerage meeting the topic of capitalization rates (CR) came up as one of our brokers stated that in the Boston market CR’s have risen by 150 to 200 basis points under market pressures. This means that an investment property that might have been at a 6% CR a year ago may now be trading at 8% providing a lower selling price and perhaps a better value for the Buyer. But is this really the trend we might expect as other investments like the stock market continue their volatility?

Another view is that a solid real estate investment property would become more valuable as market risks continue and thus CR’s could hold or even be reduced as investors compete for more predictable returns through commercial property ownership. What trends might we expect to see? Is the Vermont market place different from what we are seeing elsewhere?

With the unpredictability of the stock market, more investors are exploring income producing real estate as an alternative investment.   A vehicle that may make sense is a self directed IRA.   This program allows one to direct funds from their individual IRA account to a real estate investment.  To learn more about self directed IRA’s go to  http://www.penscotrust.com.