Archive for May, 2010
Is the European Banks’ Policy of ‘Delay and Pay’ or ‘Pretend and Extend’ Working or Could it Still Go Horribly Wrong?
As Europe slowly emerges from recession, a number of major investors, many of them cash buyers, principally German, Scandinavian and Asian, are beginning to look for prime investments across the continent. Somewhat surprisingly, there is a shortage of such stock which, in turn, has led in some markets to boom-like conditions in this narrow sector of the market. Prime office yields in London, for example, have fallen to 4.75%. The shortage is partially due to the extremely conservative requirements of the investors-prime location, top specification, long leases, undoubted covenants, partially to the virtual cessation of development activity, but significantly also to the somewhat ostrich-like behaviour of the banks. More >
The Great Recession continues to influence the raw land market as valuations deteriorate from an abundance of distressed sales transactions. During the first quarter of 2010, southern Nevada witnessed 526.7 acres change hands with traditional sales taking a backseat to lender-involved trustee sales, which accounted for 391.6 acres or 74.3% of all vacant land deals. Over the last five quarters, traditional sales have averaged only 20.9% of all raw land transactions and downward pressure on pricing will continue as long as these levels remain. More >
Volatility in the hospitality sector is characteristically more pronounced than in other major real estate asset classes. This is due in part to the nature of the investment. A direct investment into hotel properties is both a real estate investment and an investment into an operating business.
Over the past two years, concerns over the economy and corresponding cuts in consumer and corporate spending have dramatically hit the bottom line of hospitality properties. It is not unusual to see 25% to 35% drops in net operating income over the prior year. Coupled with a decompression of cap rates due to the financial markets, hotels have taken a double hit to their value. More >
Across the globe, commercial real estate markets are showing signs of recovery and growth. In Europe, the dichotomy between Central/Eastern Europe and Western Europe shows a divergent commercial real estate market. Central and Eastern Europe started to boom right before the 2007 collapse, as investors drove pricing close to Western Europe levels. In the more than 24 months since the collapse began, some markets are beginning to show a resurgence of popularity. Poland and the Czech Republic truly standing out as countries with significant prime office and retail properties for investors and corporate users. Other real estate markets in the CEE region, like the Baltic States and Ukraine, remain mired in the recession and will take longer to recover.
London’s commercial property market was nearly decimated in the downturn, but investors are once again eyeing the city for high-end properties and advantageous pricing on prime office and retail space in the West End. Germany saw a similar rebound in late 2009 and continues to improve. Ireland is seeing foreign investor interest for the first time in years, creating a new market where properties compete between local buyers and foreign investors. A shortage of prime space in Paris has kept rental values from slipping too much in that market, and yields are on the decline. More >
NAI Global, the premier network of commercial real estate firms and one of the largest real estate services providers worldwide, today announced that 68 NAI member firms and 151 NAI agents were named Power Brokers by CoStar Group, a leading information provider for the commercial real estate industry.
CoStar Group tracks data on commercial properties and transactions throughout the U.S., UK and France. The Power Broker Awards are presented annually to the top brokerage firms and individual agents in major U.S. markets based on their leasing and sales transaction activities the prior year. NAI received a total of 230 Power Broker Awards across 57 markets for its performance in 2009. NAI firms were named Top Leasing Firm in 55 markets and Top Sales Firm in 21 markets. Only one other brokerage firm received awards in more markets. More >