Why are REITs so seemingly attractive? Among the reasons, in no particular order, is the principal of anticipation; investors know that real estate is not overbuilt – it’s just “under-demanded, which will be self-correcting as the economy improves. Investors, anticipating a recovery in industry fundamentals want to be owners of shares rather than spectators trying to time the bottom of the market.
It is hard to pinpoint how much of the $787 billion in federal economic stimulus funds is making its way into actual real estate developments, but projects adding value to real estate are under way, or on the way, in all four corners of the country—and many places in between. While the massive injection of taxpayer capital into the economy is not without its critics, it has prompted one of the biggest increases in construction spending the industry has experienced in a long time.
Sovereign wealth funds (SWFs), owned by national governments to invest a country’s surplus wealth, will become an increasingly important source of capital for real estate—particularly in the United States, and especially in a market that has seen a decrease in capital available from other institutional investors. And as the U.S. economy recovers, SWFs—along with pension funds and real estate investment trusts —are likely to be very active in U.S. real estate investment.
For years before the clock ticked down on the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), policy makers and advocates have grappled with what should replace it. A major reform effort may be unlikely for the next few years, or longer. Where does a new bill stand, and what is happening in the meantime?
Washington, D.C. is generally not known for either artists or gritty industrial space, but both exist there. One project attempting to turn these rare commodities to its advantage is the Brookland Artspace Lofts project, which will provide 41 affordable live/work apartments for working artists. Gap financing linked to the federal stimulus program, plus support from a local dance school, helped make the project possible.
Equity-rich sovereign wealth funds (SWFs) are one of the few investors in a position to take advantage of real estate opportunities presented by the global financial downturn. Who has, and where have they, been cherry-picking the best deals?
It will be years before we know the full details and impacts of the Dodd-Frank financial reform bill, signed by President Obama in July. How will it impact commercial real estate? A top executive of the Real Estate Roundtable gives you a look into some key provisions that hold special meaning for CMBS issuers and investors, as well as firms who want to manage their risk exposure through over-the-counter derivatives.
For the past two years, 96 percent of all financing for housing in the United States has been provided by the federal government. Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) have become the mainstays of financing for both homeownership and rental housing. Since the federal government’s takeover of Fannie Mae and Freddie Mac and the collapse of Lehman Brothers, the private mortgage market has become little more than a memory.
It seems that everyone in the commercial real estate (CRE) industry is attempting to retool their operations to launch a fund in anticipation of the much-anticipated CRE bust and resulting flood of distressed supply supposedly just over the horizon. But it often is those individuals pitching their new fund—created to capitalize on distressed deals—who in the next sentence say “there are just no deals out there.” Should this raise a red flag?
The principal of Citadel Realty Advisors and author of the Ross Rant newsletter discusses the private equity markets, including current challenges and what lies ahead.