Posted by admin on July 14, 2010 under Uncategorized | 
Some interesting data about the Tampa area market, but the balance of the article illustrates what we are experiencing state-wide.
By Doug Sword
Owners of commercial real estate in several areas of Florida are taking in more money, bucking a national decline many economists say could hamper the economic recovery.
Despite a nationwide decline in rents and an increase in empty office and retail space, landlords in Sarasota, Miami and Pensacola reported collecting more rents on commercial property during the first four months of the year than they had during the same period in 2009, data from the Florida Department of Revenue shows.
Delinquency rates on commercial loans remain up across the country, and hundreds of millions of dollars in defaulted loans on properties in Sarasota, Manatee and Charlotte counties have been dragged into court.
Still, in March, Sarasota County landlords took in $55 million, their best single month since May 2005 and 14 percent more than March 2009 revenues. Read more of this article »
Posted by admin on July 12, 2010 under Uncategorized |
While commercial real estate values have not rebounded in the first six months of the year, the fear that 2010 was a disaster waiting to happen has subsided as liquidity has started flowing back into the market, according to new reports out this past week from PIMCO and PricewaterhouseCoopers.
The pair of reports suggest that, for institutional quality property at least, property values have found a bottom and cap rates have peaked and could even start to subside. Neither of the reports is projecting a worry-free environment, however, in fact both are projecting a long, long road to full recovery.
“While most investors sense that the worst is over in terms of market deterioration, supply greatly outweighs demand across all property sectors keeping overall vacancy rates high and rental rates on a downward trend,” said Susan Smith, director, real estate advisory practice, PricewaterhouseCoopers. “Top-tier locations are showing the most signs of life with respect to tenant interest and recovery potential. However, inspiring leasing trends have yet to fully materialize, further contributing to this sense of market flux.”
Read more of this article »
Posted by admin on under Uncategorized |
There’s no question this is a summer of economic discontent.
Florida’s double-digit unemployment is expected to creep higher again as part-time U.S. Census jobs dry up. Realtors and retailers alike anticipate a pull-back in spending from the first half of the year. And then there’s the daily havoc on tourism, fishing and other industries wrought by the still-uncontrolled massive oil leak in the gulf.
But where are we exactly in terms of the economy?
Is it an extremely tepid and jerky recovery? A double-dip recession? Or, as economist Paul Krugman warned, possibly the early stages of the country’s third big depression, following the Long Depression of the 1870s and Great Depression of the 1930s?
A trio of economists who closely track Florida took the less draconian view. They formed somewhat of a consensus that growth has slowed much more than expected, but the feared double dip — or worse — is still unlikely.
Here’s how they see the rest of the year unfolding. Read more of this article »
Posted by admin on January 19, 2010 under Uncategorized |
For the first time since the industry began forming commercial mortgage-backed securities (CMBS), delinquencies reached above 6%, according to a report from Trepp, which studies commercial real estate trends.
For the month of December, 6.07% of CMBS loans fell behind by 30 days or more, up from 5.65% in November and a far climb from 1.21% in December 2008. That’s a 500% increase in one year, according to the report.
Trepp analysts aren’t the only ones noting the surging delinquencies in CMBS. Data from the credit-rating agency Realpoint showed the delinquent unpaid balance rose more than 16% in November to $37.93bn. According to the report, the climb was “an astounding” 440% from a year earlier.
In a recent speech at the Economic Forecast Forum in Raleigh, North Carolina this week, Elizabeth Duke, a governor of the board of the Federal Reserve System provided some reasons for the sharp decline in performance.
“Hit hard by the loss of businesses and employment, a good deal of retail, office, and industrial space is standing vacant. In addition, many businesses have cut expenses by renegotiating existing leases,” Duke said.
She added that reduced cash flows and investors requiring higher rates of returns lead to lower valuations and losses after sales.
“As a result, credit conditions in this market are particularly strained. Commercial mortgage delinquency rates have soared,” Duke said.
According to the Fed’s survey of senior loan officers, banks continue to tighten standards on commercial loans and are reluctant to refinance maturing construction and land development loans.
“In this environment, a turnaround in CRE is likely to lag the improvement in overall economic activity,” Duke said. “However, compared with the situation in the early 1990s, the problems in this sector now appear to be due largely to poor business fundamentals rather than widespread overbuilding, suggesting that the performance of the CRE sector will gradually begin to improve as the economy continues to strengthen.”
According to Trepp, the total CMBS market in the US in 2009 stood at $724.5bn. And, though it is difficult to pinpoint exactly when the first complete CMBS was formed, back in 1999 Morgan Stanley lead the market with $10.5m in issuance.
by Jon Prior.
Posted by admin on January 16, 2010 under Uncategorized |
By Jerry Ascierto
If you thought the multifamily industry bottomed out in 2009, hold on to your hats. The murky depths of the Great Recession are still to come. It could be another few quarters before the multifamily industry reaches the bottom of the current cycle, according to several recent reports.
More overleveraged developers and owners, surviving on loan extensions, will be forced to turn in the keys in 2010 as fundamentals continue to fall before the market hits bottom around the end of the year. Once there, value declines will approach about 40 percent, on average, from the mid-2007 peak—the worst decline since the Great Depression and worse than seen in the early 1990s. Those are just some of the sobering conclusions reached by The Emerging Trends in Real Estate report, recently released by the Urban Land Institute and PricewaterhouseCoopers.
While there have been much fewer “fire sales,” than in the RTC days, “the quickness at which fundamentals have declined, and the pace at which values have deteriorated, is the difference between now and then,” says Susan Smith, director of real estate……Read more HERE
Posted by admin on October 14, 2009 under Uncategorized |
LONDON – Oct. 14, 2009 – Real estate markets worldwide are stabilizing and showing signs of a tentative recovery, according to a newly released report from London-based global property consultancy Knight Frank.
The quarterly Knight Frank Global House Price Index shows property values increasing in almost half of 32 countries surveyed during the second quarter of this year. “Significantly, quarterly price falls accelerated in only 22 percent of the locations and did not exceed 10 percent in any country,” says Liam Bailey, head of residential research for Knight Frank. “This compares with double-digit falls in a number of locations during the first quarter.”
Some of the strongest signs of recovery are coming from the Nordic countries, with prices up over the previous quarter by 5.3 percent in Norway, 3.9 percent in Finland, and 3.6 percent in Sweden. But countries as diverse as Australia, Israel, and the Netherlands also are posting solid gains.
In some places, demand is being spurred by historically low borrowing costs and homebuyer tax incentives. Sweden’s central bank, for example, has slashed the prime interest rate from 3.75 percent a year ago to only 0.25 percent today, so banks there are now offering home loans at interest rates as low as 1.5 percent. Read more of this article »
Posted by admin on under Uncategorized |
NEW YORK (AP) – Oct. 14, 2009 – More than 80 percent of economists believe the U.S. recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist.
That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.
“The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines,” said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University.
The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through next year. Forecasters now expect the U.S. economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010.
Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious. Read more of this article »
Posted by admin on October 5, 2009 under Uncategorized |
I just ran across this article from the National Real Estate Investor – and it illustrates a few great points.
In our brokerage, we are hearing more reports of investors organizing funds to acquire distressed commercial real estate. I’ve felt for a couple of years now that this will mark the bottom of the market, when investors feel that that prices have stabilized, credit is fully tightened, and cap rates are at their peak. We have buyers on hand right now, with a standing offer to purchase property at a 12% cap, based on the current income, at its current occupancy level. Before you scream how low that is – keep in mind this is a standing offer, cash, close in less than 30 days.
Its extreme pricing – but its real. It is the bottom dollar – and it is real money that you can have in 30 days, if your property is truly distressed. When you have a market conditions such as ours, this is encouraging. An investment group has stepped up and is willing to draw a line in the sand declaring that “X” is the minimum price for income producing property, and they will purchase anything that reaches that low price.
So, the shorthand version of the below story is as follows -
NREI surveyed 521 Commercial Real Estate investors – and from that data the assumption is that we are at the bottom of the commercial real estate market – or close enough to see it anyways. Of the respondents in this survey
- 56% of them planned to purchase commercial real esate inside of the next 12 month period
- 46% of them planned to purchase inside of the next 6 months
- 23% are actively looking to purchase of commercial property. NOW.
The one theme through the article is that leading economic indicator the investors were looking to was a stabilization of job losses. When job losses reverse and show some gains, even slightly – all areas of the economy stabilize.
Read more of this article »
Posted by admin on under Uncategorized |
Now that the housing market has stabilized and prices are beginning to rise, attention is turning to what is often called the next big crisis: commercial real estate.
Mortgage-backed securities helped sink the residential market, and worries are widespread that the $700 billion in such securities backed by commercial mortgages will lead to similar problems in that sector.
The traditional, core commercial holdings of banks also are under suspicion. Deutsche Bank estimates losses will amount to 11 percent to 15 percent on the $1 trillion in such mortgages held by banks.
A commercial version of the real estate meltdown, however, may turn out to be a calamity that is more anticipated than experienced.
And while the southern New Jersey commercial market is weak, it’s also showing signs of what may be the start of a rebound.
No surprise
J. William Mills, president of PNC Bank’s Philadelphia and southern New Jersey region, thinks a true crisis is more of a surprise. Read more of this article »
