Michael's Commercial LLC

The Commercial Property Market Report* for Prince William County is offered as a service of Michael’s Commercial LLC. The monthly market report is categorized by the Prince William County Commercial Zoning Districts:

Legend:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District)
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED Commercial

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The information made available here is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2008 Michael’s Commercial LLC, All Rights Reserved

Commercial real estate prices have been on an upward climb for the last decade until they peaked in the second quarter of 2007 according to the MIT Commercial Real Estate Transactions-Based Index. The fourth quarter 2007 had a 5.4% downward position and the first quarter 2008 showed a slight increase of 1.6%. The second quarter 2008 started a downward trend of 2.7% in commercial real estate prices. If you look at the last four quarters, prices have dropped nearly 9.5%.

As of the end of the second quarter 2008 demand for commercial real estate has fallen 2.7% and supply has also fallen 2.8%. Over the last four quarters demand has decreased 18.5% and Supply has slightly increased 0.2%. Since prices have peaked in 2007, the overall price index has come down 4.2% with demand dropping 13.6% and supply increasing 5.7%.

The Total Return Index which includes the Price, Demand and Supply Indices have dropped 1.8% during the second quarter of 2008 with a cumulative increase of 0.1% since commercial real estate prices peaked in the second quarter of 2007. During the last four quarters, the total return index had fallen 6.1%. The last quarter showed some promise that prices were on the rise again; however, 71% of that gain was lost during the second quarter. It will be interesting to see what the next quarter will bring.

Note: The TBI is a statistical methodology that produces estimates of price movements and total returns based on transactions of properties sold from the NCREIF Index database.

MIT makes no warranty or claim regarding the usefulness or implications of the index. It should also be noted that TBI results for the 1st, 2nd, and 3rd quarters of any year are considered preliminary and subject to revision until the calendar year is completed with the 4th quarter results.

The information provided here is the author’s own interpretation of the MIT Commercial Real Estate Transaction-Based Index and also makes no warranty or claim regarding the usefulness or implications of the index.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2008 Michael’s Commercial LLC, All Rights Reserved

Commercial Land Real Estate Absorption Rates for Prince William County are offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)
• MIXED

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                          1-4 Months Supply
• Neutral Market                         5-6 Months Supply
• Buyers Market                         7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on July 31, 2008:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

The tables above indicate that the commercial land real estate market in Prince William County has been relatively slow. The property sales have been in the General Business (B-1) District, Office Low-rise (O(L)) and Light Industrial (M-1) Districts with some limited inventory available in the B-1, B-2, M-1, M-2, M/T and MIXED Zoning Districts. We are currently in a BUYERS MARKET.

• General Business District – No activity within the last 90 days and nine properties currently in the inventory.
• Neighborhood Business District – No activity during this reporting period and one listing currently in the inventory.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – No activity within the last 180 days.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No sales during this reporting period and six listings currently in the inventory.
• Light Industrial District – No sales during this reporting period and two listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period and one listing currently in the inventory.
• MIXED – No activity during this reporting period and one listing currently in the inventory.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

The information made available here is the author’s own interpretation of the Prince William County Commercial Real Estate market and makes no warranty or claim regarding the usefulness or implications of this information.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2008 Michael’s Commercial LLC, All Rights Reserved

Commercial Absorption Rates for Prince William County is offered as a service of Michael’s Commercial LLC. The monthly absorption rates are categorized by the following Prince William County Zoning Districts:

• B-1 (General Business District)
• B-2 (Neighborhood Business District)
• B-3 (Convenience Retail District
• O(L) (Office Low-Rise District)
• O(M) (Office Mid-Rise District)
• O(H) (Office High-Rise District)
• O(F) (Office/Flex District)
• M-1 (Heavy Industrial District)
• M-2 (Light Industrial District)
• M/T (Industrial/Transportation District)

Absorption Rates are established by how many properties have sold during a given period of time (e.g., 365, 180, 90 and 30 days). Absorption rates also allow tracking trends in the market for any given number of days, weeks or months. These trends can indicate whether we may be in a Sellers Market, a Neutral Market or a Buyers Market. A monthly absorption rate of 5-6 is usually considered a Neutral Market. Anything below five is regarded as a Sellers Market and anything above six a Buyers Market.

• Sellers Market                         1-4 Months Supply
• Neutral Market                        5-6 Months Supply
• Buyers Market                         7 Plus Months Supply

The following tables reflect the Monthly Absorption Rates* for respective Zoning Districts in Prince William County ending on July 31, 2008:

• Total Number of Properties on Market. The properties that were available on the market during the reporting period.
• Total Number of Sales. The total number of Sold properties during the given reporting period.
• Monthly Absorption Rate. The rate at which the Sold properties were absorbed in the market on a monthly basis.
• Inventory. The number of available properties as of the report date.
• Months Supply. The number of months it will take the properties to sell based on the number of properties that have sold during the reporting period.
• Chance of Selling. The rate at which the properties in the inventory will sell based on the percentage of the total properties on the market and the total number of sales.

 The tables above indicate that the commercial real estate market in Prince William County has been relatively slow and almost non existent during this reporting period. The property sales have been in the General Business (B-1) District with some limited inventory available in the M-1 and M-2 Zoning Districts.

• General Business District – Based on the 30 Day Monthly Absorption Rate, it would take 27 months to deplete the current inventory. The probability of selling all properties in the current inventory is 1.5%. We are currently in a Buyers Market.
• Neighborhood Business District – No activity during this reporting period.
• Convenience Retail District – No activity during this reporting period.
• Office Low-Rise District – No activity during this reporting period.
• Office Mid-Rise District – No activity during this reporting period.
• Office High-Rise District – No activity during this reporting period.
• Office/Flex District – No activity during this reporting period.
• Heavy Industrial District – No sales during this reporting period and seven listings currently in the inventory.
• Light Industrial District – No sales during this reporting period and two listings currently in the inventory.
• Industrial/Transportation District – No activity during this reporting period.

*The data presented here is compiled from information provided by the Metropolitan Regional Information System.

All information provided here is the author’s own interpretation of the Prince William County commercial real estate market and makes no warranty or claim regarding the usefulness or implications of this data.

Michael Setunsky is the Broker and owner of Michael's Commercial LLC serving the Northern Virginia commercial real estate market. His more than 23 years of experience as a commercial real estate and business broker has earned him the distinction for being one of the top commercial real estate producers in the Mid-Atlantic Region. He also serves on the Mid Atlantic Real Estate Marketing Association's (MAREMA) Board of Directors, and is a Commonwealth of Virginia licensed Instructor. He teaches Pre-licensing, Post Licensing Education, Broker's and Continuing Education courses. Visit his company web site at http://michaelscommercial.com/.

©2008 Michael’s Commercial LLC, All Rights Reserved