Commercial Property’s 12-15 % value fall boost

Veteran real estate agent with Damianos Sotheby’s International Realty, Ridley Carroll.

By Chester Robards
Courtesy of The Tribune


NASSAU, BAHAMAS. (April 29th, 2009)
* Price falls aid buyer interest, as $5m Pepsi property comes down to $4m.
* Landlords target programs to keep business tenants in place

The sale and rental of commercial properties is staying afloat despite a floundering economy due to a 12-15 % decline in property values in New Providence, commercial real estates agents said yesterday, as below market prices for spaces and buildings peak buyer interest.

Veteran real estate agent with Damianos Sotheby’s International Realty, Ridley Carroll, said prices on some of the Family Islands have even been driven as low as 30 percent.

The old Pepsi-Cola manufacturing property on Prince Charles Drive, Nassau, part of Mr. Carroll’s current sales portfolio, has been receiving inquiries despite its $5 million price tag. This has been further reduced by $1 million in an attempt to make the property more attractive to buyers.

According to Mr. Carroll, the Pepsi building has the most commercial space of any presently on the market, with 44,000 square feet, and is on four acres of land.

He said real estate buyers, especially those with “old money”, in this country, are always interested in commercial property.

“Things that are more price realistic will move, “Mr. Carroll said. “ It’s just that you have to work a little more harder.”

Retail sales have been taking a hit since the onset of the global financial crisis, with some retailers having to forfeit their shops because of late rental payments or, in the case of a purchased property, loan defaults.

Mr. Carroll said Bay Street retail spaces have become an unfortunate example of this phenomena, brought on by a broken economy.

He, however is still making sales in his capacity as a real estate agent.

David Morley, managing director of Morley Realty, told Tribune Business that most landlords owning retail spaces are much more interested in assisting their tenants rather than have their spaces empty.

“It’s better to have good occupancy in your place with tenants paying something,” he said.

Mr. Morley said many landlords have implemented tenant retention plans to help business owners in case they are unable to pay rent, or to entice them to remain in the rental space despite difficulties.

Mr. Morley said the Mall at Marathon has been actively securing new tenants for some of its vacant spaces, and has also implemented a tenant retention plan of sorts.

“They have a program that includes beefing up security and increasing marketing, “ he said. There are a lot of ways that landlords are trying to help tenants during these tough economic times. “

Mr. Morley suggested that there had been an increase in demand for some retail spaces, as Bahamians decide to forgo shopping trips abroad for local purchases.

“Once retailers don’t price themselves out of the market there will always be a demand for local retail, says Mr. Morley. “Bahamians don’t necessarily have the wherewithal to fly to Florida and shop”.

He added that he remains optimistic about the immediate future of the commercial real estate market.

Mr. Morley said of a further contracting economy: “Let’s hope we don’t have to do that way. Let’s hope things rebound quicker.”

He said the repercussions of store closings would have a “scary” impact on the Bahamian economy and society at large.

Mr. Carroll remains optimistic also about the future of commercial properties, as he continues to get listings off the market. “There is always a value for commercial property,” he said.

Damianos Sotheby’s International Realty, serves the entire Bahamas and is headquartered in downtown Nassau with offices in Lyford Cay; Governor's Harbour and Spanish Wells Eleuthera; Marsh Harbour, Hope Town and Elbow Cay, Abaco; with associates in Treasure Cay, Abaco; Exuma, and Freeport. The Bahamas, offers exclusive Sotheby’s International Realty marketing, advertising and referral services designed to attract well-qualified buyers to the firm’s property listings. In addition, the firm and its clients benefit from an association with the Sotheby’s auction house, which promotes real estate referral opportunities with auction house clientele.