InvestorsBeat recently published its predictions for the 2013 Alaskan property market and it appears that commercial property may be on the rise. Ryan Mae Lucas made the prediction on the InvestorsBeat website. Lucas is currently enjoying her fifth year in Alaska’s real estate market and she also serves on the advisory boards of a few real estate associations.
Lucas’ forecast for the 2013 property market in Alaska is as follows.
“Alaska has always been a conservative state with increasing demand for investment opportunities. Over inflated property values never occurred here and the simple economics for the commercial market is that the demand outnumbers the supply of valuable inventory. The 2013 bulletin for commercial real estate appears to be promising, with a continuous momentum towards more transactions, as seen in the 4th quarter of 2012.
“The demand can be seen in the absorption of lease space, especially for warehouses, office, strip retail, and industrial land in Anchorage, where the majority of Alaska’s population lives.
“The replacement cost for a commercial office building, for example, is in the ballpark of $400 per square foot. Alternatively, investors can buy buildings in the neighborhood of $175 per square foot, a far better investment choice than building new to cover lease demands.”
She adds, “We see building owners that bought property in the 80’s oil boom now facilitating their exit and selling off property. This is positive for new investors entering the market. You get the security of capitalization rates at 8% or greater and properties that have little to no vacancy.”
Thank you InvestorsBeat and Ryan May Lucas for the intriguing prediction; intriguing especially for future Alaska commercial property investors. With more transactions predicted for 2013 and more demand for lease space, and with a mass selloff of 80’s oil boom property, it should be a very exciting year for buyers and sellers alike.
We’ll be sure to keep you updated on any developments. But if the 4th quarter of 2012 is any indication, like Lucas mentioned, we should see the same forward progress in the coming months.