Feb 3, 2010 10:23 AM, By Matt Valley
LAS VEGAS — What’s the biggest worry among multifamily lenders in 2010 and 2011? The usual suspects, jobs and interest rates, rank high on the list. But for Kenneth Bacon, executive vice president of Fannie Mae, the sharp drop in real estate valuations from peak levels just a few short years ago is most troubling.
Although determining value remains a difficult task because there have been relatively few transactions, the Moodys/REAL Commercial Property Price Index numbers show a 40% drop for multifamily properties from the market peak to the third quarter of 2009. Read More Here
Friday, February 26, 2010
Thursday, February 25, 2010
Economist: Washington’s Fixes Have Become the Problem
Feb 24, 2010 3:00 PM, By Matt Hudgins, contributing writer
Uncertainties over taxes and access to credit are driving U.S. businesses to hoard cash rather than lead the economy into recovery by spending and hiring, according to a prominent real estate researcher.
The private sector has squirreled away trillions of dollars that could revitalize the economy, but businesses are reluctant to part with cash they may need for operating capital in the absence of credit, and to pay higher tax bills at all levels of government, according to Dr. Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University.
“We are used to thinking of the federal government as the solution to these problems for economic growth and they have rapidly become the source of the problem because of the uncertainty that they have created for business people,” says Dotzour, who was one of several presenters at a symposium hosted by the CCIM Central Texas chapter on Feb. 23 in Austin. Read More Here
Uncertainties over taxes and access to credit are driving U.S. businesses to hoard cash rather than lead the economy into recovery by spending and hiring, according to a prominent real estate researcher.
The private sector has squirreled away trillions of dollars that could revitalize the economy, but businesses are reluctant to part with cash they may need for operating capital in the absence of credit, and to pay higher tax bills at all levels of government, according to Dr. Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University.
“We are used to thinking of the federal government as the solution to these problems for economic growth and they have rapidly become the source of the problem because of the uncertainty that they have created for business people,” says Dotzour, who was one of several presenters at a symposium hosted by the CCIM Central Texas chapter on Feb. 23 in Austin. Read More Here
Wednesday, February 24, 2010
Global Commercial Property Sales Surge 85% In Fourth Quarter, Says RCA
Feb 23, 2010 2:12 PM, By Denise Kalette, NREI senior associate editor
A new report on global commercial property sales $10 million and above shows that quarterly transaction volume has surged for the first time in two years, a clear indication that the market is recovering from a deep recession.
In the fourth quarter of 2009, volume rose to $147 billion, up 85% from the same period of 2008, according to New York-based research firm Real Capital Analytics (RCA). It was the first quarterly increase on a year-over-year basis in seven quarters, according to the report.
From apartments and offices to retail deals, all property types except hotels showed an increase. Office, retail and industrial transactions together registered a 29% gain in the fourth quarter from the same period a year earlier.
Asia led the fourth-quarter surge, with China, Hong Kong and Taiwan providing most of the momentum, while the U.S. and Canada experienced a decline in sales.
“The U.S. is lagging counterpart regions in Europe and Asia. But we fell into the down cycle arguably later as well,” says Dan Fasulo, managing director of RCA. “We like to think that the U.S. will start to recover rapidly over the next six months, basically following in the same path of the recovery we’ve seen in Western Europe and in Asia.”
In the Asia Pacific region, volume rose 240% year-over-year in the fourth quarter, with China showing the strongest gains. And for all of 2009, only China registered a significant increase in sales, with volume rising 139% to $156 billion.
Although European and U.S. governments initiated stimulus programs, they were outdone by China, says Fasulo. “When Beijing told the banks to lend, they went out and lent the money. A lot of that excess debt capital went toward the acquisition of real estate, mainly large development sites.” A number of mixed-use projects were initiated at those sites and projects are under way.
Values begin to rise
The strengthening sales show that the market has bottomed out and begun its recovery, says Fasulo. “I think it’s very easy to say that as far as transaction activity goes, we’re well off the bottom, which as we look back, probably occurred in the first half of 2009.”
Anecdotal and some statistical evidence show that values have also begun to rise, says Fasulo. “In early 2009, you could barely get a quote to buy an office building in Manhattan. And if you did get a quote from a lender, you would be at extraordinarily low loan-to-values and a high interest rate. Now there’s more than a dozen lenders that would give you an honest quote today, at pricing that’s much more attractive.”
In one example signaling an improved market, the iconic, 160-unit Helmsley Carlton House hotel on Madison Avenue in Manhattan drew a flurry of offers after it was put up for auction in January. “There were over 35 bidders — over 100 interested parties and 35 firm bids,” says Fasulo. “Those are greater numbers than we saw at the height of the market.”
Bidding war in Boston
Another sign of an improving commercial property market is the bidding war that erupted over One Brigham Circle, a 200,000 sq. ft. office complex in Boston. Less than a week ago, AEW Real Estate Investment Management, based in Boston, won the competition with a bid reported at nearly $99 million.
Although the fourth quarter saw a dramatic increase in sales activity, transactions for the entire year of 2009 reflected the severe losses of the economic downturn. The global volume of commercial property sales dropped 30% to $381 billion, while the number of transactions fell 40%, RCA reports.
“We got pushed to the brink in late ‘08 and early ‘09, and saw almost the disappearance of the debt capital markets for commercial property,” explains Fasulo. But little by little, the marketplace has improved and property values are in the initial phases of climbing back from the abyss.
Still, not all properties are rising in value and desirability at the same pace. Class-A properties in highly desirable markets will recover their values more quickly, says Fasulo, particularly those with long-term leases in place and strong tenants.
“It’s almost a two-tiered market that’s developing. One is the prime assets that have more bond-like qualities, and the other part is assets that have near-term exposure to the economy — retail centers that have lost major tenants, broken development projects, raw land, a secondary market hotel. Those are the types of assets that are not going to see values recover anytime soon.”
A Class-A office building that stands mostly empty also is unlikely to share in the rebounding market, says Fasulo. But a building net-leased to a major institution such as a pension fund is a different story. “You’d better believe we’re going to see values increase for that type of product this year.”
As for the timing of recovery, Fasulo says he may be more bullish than many analysts. “I would argue that it’s already happening now.”
A new report on global commercial property sales $10 million and above shows that quarterly transaction volume has surged for the first time in two years, a clear indication that the market is recovering from a deep recession.
In the fourth quarter of 2009, volume rose to $147 billion, up 85% from the same period of 2008, according to New York-based research firm Real Capital Analytics (RCA). It was the first quarterly increase on a year-over-year basis in seven quarters, according to the report.
From apartments and offices to retail deals, all property types except hotels showed an increase. Office, retail and industrial transactions together registered a 29% gain in the fourth quarter from the same period a year earlier.
Asia led the fourth-quarter surge, with China, Hong Kong and Taiwan providing most of the momentum, while the U.S. and Canada experienced a decline in sales.
“The U.S. is lagging counterpart regions in Europe and Asia. But we fell into the down cycle arguably later as well,” says Dan Fasulo, managing director of RCA. “We like to think that the U.S. will start to recover rapidly over the next six months, basically following in the same path of the recovery we’ve seen in Western Europe and in Asia.”
In the Asia Pacific region, volume rose 240% year-over-year in the fourth quarter, with China showing the strongest gains. And for all of 2009, only China registered a significant increase in sales, with volume rising 139% to $156 billion.
Although European and U.S. governments initiated stimulus programs, they were outdone by China, says Fasulo. “When Beijing told the banks to lend, they went out and lent the money. A lot of that excess debt capital went toward the acquisition of real estate, mainly large development sites.” A number of mixed-use projects were initiated at those sites and projects are under way.
Values begin to rise
The strengthening sales show that the market has bottomed out and begun its recovery, says Fasulo. “I think it’s very easy to say that as far as transaction activity goes, we’re well off the bottom, which as we look back, probably occurred in the first half of 2009.”
Anecdotal and some statistical evidence show that values have also begun to rise, says Fasulo. “In early 2009, you could barely get a quote to buy an office building in Manhattan. And if you did get a quote from a lender, you would be at extraordinarily low loan-to-values and a high interest rate. Now there’s more than a dozen lenders that would give you an honest quote today, at pricing that’s much more attractive.”
In one example signaling an improved market, the iconic, 160-unit Helmsley Carlton House hotel on Madison Avenue in Manhattan drew a flurry of offers after it was put up for auction in January. “There were over 35 bidders — over 100 interested parties and 35 firm bids,” says Fasulo. “Those are greater numbers than we saw at the height of the market.”
Bidding war in Boston
Another sign of an improving commercial property market is the bidding war that erupted over One Brigham Circle, a 200,000 sq. ft. office complex in Boston. Less than a week ago, AEW Real Estate Investment Management, based in Boston, won the competition with a bid reported at nearly $99 million.
Although the fourth quarter saw a dramatic increase in sales activity, transactions for the entire year of 2009 reflected the severe losses of the economic downturn. The global volume of commercial property sales dropped 30% to $381 billion, while the number of transactions fell 40%, RCA reports.
“We got pushed to the brink in late ‘08 and early ‘09, and saw almost the disappearance of the debt capital markets for commercial property,” explains Fasulo. But little by little, the marketplace has improved and property values are in the initial phases of climbing back from the abyss.
Still, not all properties are rising in value and desirability at the same pace. Class-A properties in highly desirable markets will recover their values more quickly, says Fasulo, particularly those with long-term leases in place and strong tenants.
“It’s almost a two-tiered market that’s developing. One is the prime assets that have more bond-like qualities, and the other part is assets that have near-term exposure to the economy — retail centers that have lost major tenants, broken development projects, raw land, a secondary market hotel. Those are the types of assets that are not going to see values recover anytime soon.”
A Class-A office building that stands mostly empty also is unlikely to share in the rebounding market, says Fasulo. But a building net-leased to a major institution such as a pension fund is a different story. “You’d better believe we’re going to see values increase for that type of product this year.”
As for the timing of recovery, Fasulo says he may be more bullish than many analysts. “I would argue that it’s already happening now.”
Tuesday, February 23, 2010
FAILING TO SUCCEED
At first blush, this week’s essay seems to focus on what to do when you fail to succeed. But let’s turn that on its head. Instead, I am suggesting that you need to fail in order to succeed… success achieved through failure. Indeed, history shows that truly great success is usually achieved only after either great failure or a great deal of failure, or both.
We mistakenly think that anyone who succeeds has had nothing but good luck all their life and that he or she had it easy. By the time we hear about someone making it, the focus is on the success, not on the long hard struggle to get there. The truth is, everyone has failed. Not only that, everyone has failed miserably.
Pioneers, innovators and phenoms alike have usually experienced immense disappointments throughout their existence. Consider the evidence. Michael Jordan, arguably one of the greatest athletes to grace sports, once said, “I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeeded.” Thomas Alva Edison, who held the world record of 1093 patents for inventions, once said, “I have not failed. I’ve just found 10,000 ways that won’t work.”
Another case in point. J.K. Rowling, author of the Harry Potter books - over 400 million sold and now the second richest woman in the UK - said that at her lowest point she was suicidal, not knowing how she was going to provide for her kids. Failing is a part of life. It’s hard to imagine that someone like Rowling on the brink of suicide. Yet failure – and the feelings of despair that can accompany it - are all too common. We all fail, and guess what? We will continue to fail because we absolutely need it to succeed.
Failing is trying. Without trying, we never have a shot at succeeding. The faster we deal with failure, the sooner we are ready for success. Each failure is a building block to success. Some people cannot deal with failure, so they never try anything. The result: nothing. Nothing can happen without action. Life is about action, and action means taking risks.
In sales, those who succeed are typically the ones not afraid of rejection. In fact, anyone who has ever done sales knows that sales is all about rejection. For some people, the risk of being rejected is so paralyzing they cannot approach a potential client. But those who are successful at sales know that no risk equals no sales. No sales equals no success. Renowned sales coach Tom Hopkins said that rejections or failures are the rungs to the ladder of success. Here was his theory. Say for example that each sale you made was worth $100, and you complete a sale about once every 10 tries. That means each failure is worth $10! It’s a clever way to look at failure. More importantly, he recognized there is value in failure.
Failure also provides lessons. Each failure brings experience and knowledge that can help you succeed. Thus, you should never fear failure. In the game of life, nobody plays a perfect game. If you think that some people lead perfect flawless lives, the mistake is in your perception. So, how do you achieve success through failure?
Step 1 - Accept that failure is part of life.
Step 2 - Accept past failures. For some, past failures haunt and torment them. Get over it! Know that this is not an isolated incident or something that only happened to you. Everyone has faced failure. You are no different. At least you tried!
Step 3 - Accept that you will fail again in the future. Some things will work, and some won’t. Prepare yourself mentally for this. It’s realistic and logical.
However, accepting failure is not expecting failure! You should never expect to fail. Those who expect to fail realize their wishes very easily. You can be logical and accept that the possibility of failure exists, but you should also be confident in your chances to avoid failure and succeed. This is crucial! The goal is to know that even if you fail, you will get over it and it won’t destroy you. This is so empowering that simply having that frame of mind increases your chances of success even more.
The next time you are thinking of doing something, a new project or endeavor, just give it a try. The biggest hurdle that keeps people from succeeding is the fear of failure. It causes a sudden halt in progress, and no movement means no opportunity for success. So don’t be afraid to fail. Accept it. Be ready for it. But expect to succeed, and in the end, you will.
"Success is not final, failure is not fatal: it is the courage to continue that counts." Winston Churchill
By: Madison Title Agency, LLC
We mistakenly think that anyone who succeeds has had nothing but good luck all their life and that he or she had it easy. By the time we hear about someone making it, the focus is on the success, not on the long hard struggle to get there. The truth is, everyone has failed. Not only that, everyone has failed miserably.
Pioneers, innovators and phenoms alike have usually experienced immense disappointments throughout their existence. Consider the evidence. Michael Jordan, arguably one of the greatest athletes to grace sports, once said, “I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeeded.” Thomas Alva Edison, who held the world record of 1093 patents for inventions, once said, “I have not failed. I’ve just found 10,000 ways that won’t work.”
Another case in point. J.K. Rowling, author of the Harry Potter books - over 400 million sold and now the second richest woman in the UK - said that at her lowest point she was suicidal, not knowing how she was going to provide for her kids. Failing is a part of life. It’s hard to imagine that someone like Rowling on the brink of suicide. Yet failure – and the feelings of despair that can accompany it - are all too common. We all fail, and guess what? We will continue to fail because we absolutely need it to succeed.
Failing is trying. Without trying, we never have a shot at succeeding. The faster we deal with failure, the sooner we are ready for success. Each failure is a building block to success. Some people cannot deal with failure, so they never try anything. The result: nothing. Nothing can happen without action. Life is about action, and action means taking risks.
In sales, those who succeed are typically the ones not afraid of rejection. In fact, anyone who has ever done sales knows that sales is all about rejection. For some people, the risk of being rejected is so paralyzing they cannot approach a potential client. But those who are successful at sales know that no risk equals no sales. No sales equals no success. Renowned sales coach Tom Hopkins said that rejections or failures are the rungs to the ladder of success. Here was his theory. Say for example that each sale you made was worth $100, and you complete a sale about once every 10 tries. That means each failure is worth $10! It’s a clever way to look at failure. More importantly, he recognized there is value in failure.
Failure also provides lessons. Each failure brings experience and knowledge that can help you succeed. Thus, you should never fear failure. In the game of life, nobody plays a perfect game. If you think that some people lead perfect flawless lives, the mistake is in your perception. So, how do you achieve success through failure?
Step 1 - Accept that failure is part of life.
Step 2 - Accept past failures. For some, past failures haunt and torment them. Get over it! Know that this is not an isolated incident or something that only happened to you. Everyone has faced failure. You are no different. At least you tried!
Step 3 - Accept that you will fail again in the future. Some things will work, and some won’t. Prepare yourself mentally for this. It’s realistic and logical.
However, accepting failure is not expecting failure! You should never expect to fail. Those who expect to fail realize their wishes very easily. You can be logical and accept that the possibility of failure exists, but you should also be confident in your chances to avoid failure and succeed. This is crucial! The goal is to know that even if you fail, you will get over it and it won’t destroy you. This is so empowering that simply having that frame of mind increases your chances of success even more.
The next time you are thinking of doing something, a new project or endeavor, just give it a try. The biggest hurdle that keeps people from succeeding is the fear of failure. It causes a sudden halt in progress, and no movement means no opportunity for success. So don’t be afraid to fail. Accept it. Be ready for it. But expect to succeed, and in the end, you will.
"Success is not final, failure is not fatal: it is the courage to continue that counts." Winston Churchill
By: Madison Title Agency, LLC
SW Indiana Medical Buildings Sold
An Arizona-based real estate investment trust has acquired a five building medical office portfolio in Evansville. Healthcare Trust of America, Inc. is purchasing 260,000 square feet of space currently leased to Deaconess Clinic ad 110 primary care and specialty physicians. The buildings are also located near the Deaconess Hospital campus. Read Full Article
Source: Inside INdiana Business
Source: Inside INdiana Business
Monday, February 22, 2010
Expect Tight Credit Conditions To Persist As Commercial Mortgage Defaults Rise
Feb 18, 2010 10:45 AM, By Matt Valley, NREI editor-in-chief
With the default rate on commercial mortgages held by U.S. depository institutions projected to reach 5% this year and not peak until 2011, the extremely tight credit conditions imposed by banks on borrowers are not likely to loosen anytime soon. So says Sam Chandan, global chief economist and executive vice president with Real Capital Analytics (RCA). Read Full Article
With the default rate on commercial mortgages held by U.S. depository institutions projected to reach 5% this year and not peak until 2011, the extremely tight credit conditions imposed by banks on borrowers are not likely to loosen anytime soon. So says Sam Chandan, global chief economist and executive vice president with Real Capital Analytics (RCA). Read Full Article
Subscribe to:
Posts (Atom)
