Boom Market for CRE Buyer-Users

In terms of commercial property investment, one positive sign is from firms buying properties to use for their own business operations.  Called user-buyers, these investors have proven they are able to get money from banks to spend on property acquisitions — a relative rarity nowadays.  Those who do not need a loan already have earmarked their own funds for such a purchase, enabling these user-buyers to acquire a building despite the credit crunch and increasingly wary lenders.

Real Capital Analytics reports that the number of user-buyer transactions in the Philadelphia metro area, for example, rose between June 2008 and June 2009.  During that time span, 25 percent of the 40 office and industrial purchases completed in the region were by users.  Mike Margolis, president of investment sales at Professional Realty Advisors, states, “Considering users are generally 10 to 15 percent of the market, that’s a substantial increase.  “One of the most recent transactions was the acquisition of a 25,200-square-foot building in suburban Phoenixville by a Sheppard Redistribution Inc., affiliate.  The purchased property will be used by the firm for their daily operations.