Real Estate Research Corporation’s most recent survey of the attitudes of institutional investors shows a marked change in buy, sell, or hold responses compared with a year ago. For example, the buy percentage of investors focused on acquiring office properties in central business districts (CBDs) declined from 38 percent in the third quarter of 2012 to 20 percent in the third quarter of this year.
The Trepp survey for the period ending October 4, 2013, showed the market treading water, waiting for some direction as to the solution to the issues being argued in Congress and with the president.
If the debt ceiling is not increased and the United States defaults (technically or actually) on its obligations, the consequences are thought by most experts to be dire, including substantial declines in the stock market, large increases in short- and long-term interest rates, and an economy rapidly entering into a deep and serious recession.
Say it isn’t so: As predicted here in the past, the recent run-up rates is starting to impact deals. In a transaction involving an income-producing property, the highest bidder terminated their contract near the end of the due diligence period last week.
Year-to-date issuance of commercial mortgage–backed securities ($56.7 billion) has exceeded the entire amount ($54.3 billion) issued in 2012 and is well on its way to reaching $80 billion or higher.
The banking sector has provided about half the approximately $3 trillion of outstanding commercial real estate debt, according to Federal Reserve data. However, new Basel III rules released in July may result in allocation of bank capital away from real estate and higher financing costs. As a result, developers may find future projects less attractive.
U.S. job growth was reported to be 169,000 in August. All in all, the jobs numbers do not add a lot of directional clarity given all the things that are still on our plate, including Syria, U.S. budget talks, and the debt ceiling, among others. Everyone wants to know when QE3 will “start to end” and tapering will begin; your guess is as good as ours.
With interest rates up over 100 basis points since May 1, it may be time for a stress test aimed at assessing the sensitivity of your portfolio to recent and expected future rate increases. You can be sure your lender is already doing one.
Anne Kavanagh, global head of asset management and transactions for AXA Real Estate, talks about ways to lay a solid academic foundation for a real estate career—and the management lessons she employs today.
Real Estate Research Corporation recently released its second-quarter 2013 survey of institutional participants in the commercial real estate market. With the exception of suburban office and multifamily, investment conditions improved quarter over quarter, reflecting the view that real estate remains an attractive investment alternative.