Dr. Linneman went on to explain that in 2010 and again in 2011, with the exception of Russia, the growth in US dollars exceeded that of all the BRIC countries. “But growth for the sake of growth is useless; the real reason a country grows is to improve the standard of living of its population,” Linneman explained, “From a purely economic perspective, where would a nationality-blind consumer (or investor) choose to live (invest)? Would this consumer choose Brazil, Russia, India, China, or the U.S.? If given the option, most choose America. At the end of the day, the U.S. is a better place to put dollars to work in spite of high BRIC growth rates.”

In his 2013 Global Economic Outlook white paper, he explains, “We expect commercial real estate values to continue to rise as pension and private equity funds, banks, and asset management firms move capital into alternative investments in search of yield. The return spread between the “Gateway” and secondary markets provides an arbitrage opportunity for prime core and secondary assets. While cap rates should remain for the most part unchanged, we expect multifamily rates in most markets to experience some upward pressure.”

Many in the audience raised questions about investment activity as well as mergers and Acquisition deals. “Increased investment activity in the real estate sector will extend into the REIT industry, where we can expect to see another mega-deal in 2013,” Linneman answered, “The large M&A deals seen towards the end of 2012, such as the Avalon Bay/Equity Residential takeover of Archstone from Lehman Brothers, serves as a precursor to more consolidation in 2013. Should economic uncertainty be resolved, REITs will take advantage of low interest rates and relatively easy access to capital to execute mergers and to acquire private portfolios.”

In his latest white paper, “2013 Global Economic Outlook: Where are the risks and opportunities?”, NAI Global Chief Economist, Dr. Peter Linneman, evaluates the state of the global economy in the Unites States, Europe, Asia and Latin America.

“With the U.S. economy subject to economic martial law and our political leaders unable to achieve a consensus, one cannot expect growth faster than the current pace,” said Dr. Linneman. “A failure on the part of government to arrive at meaningful spending cuts has left an environment of uncertainty for global financial markets.”
On the European economy, Dr. Linneman notes that “The Eurozone crisis will continue to hamper growth in Western Europe, as the European Central Bank, the International Monetary Fund, and a consortium led by Germany and France continue to plug holes in an increasingly leaky ship.”
In the white paper, Dr. Linneman asks, “From a purely economic perspective, where would a nationality-blind consumer (or investor) choose to live (invest)? Would this consumer choose Brazil, Russia, India, China, or the U.S.?” Please click here to find out more by downloading “2013 Global Economic Outlook: Where are the risks and opportunities?”

He also cites, “The single most important indicator for real estate is the proportion of lost jobs that has been recovered to date. This is because at the beginning of the recession, almost all property sectors were in balance. As the recession set in, we lost 8.8

million jobs, and only as these jobs are recovered will real estate space demand approach 2008 levels.”

“Thus far, the U.S. has recovered 48.5% of Payroll Survey jobs and 58% of Household Survey jobs, leaving us 16

million jobs (1.9 standard deviations) below the historical growth trend. The U.S. added just 437,000 jobs over the last three months, a pace which is in line with the tepid 1.8 million jobs gained over the trailing 12 months through September. At the current pace, we will not recover all lost jobs until 2015.”

The white paper also addresses the health of the U.S. real estate recovery being tied to the strength and timing of the nation’s macroeconomic recovery and cites “the best news is that single-family and multifamily housing starts finally are on a clear ascent.”

A PDF of the white paper can be downloaded here:

About NAI Global

NAI Global is one of the leading commercial real estate services providers worldwide. Headquartered in Princeton, New Jersey, NAI Global manages a network of 5,000 commercial real estate professionals and 350 offices in over 55 countries, and completes over $45 billion in annual transaction volume. Since 1978, NAI Global clients have built their businesses on the power of NAI’s expanding network. NAI Global’s extensive services include corporate real estate services, brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain consulting and related advisory services. To learn more, visit www.naiglobal.com.

As we enter the third quarter of 2012, we are seeing the pattern of unprecedented government intervention continue. Governments around the world are using the powerful tools at their disposal; spending, regulations, fiscal policy, and taxes to interfere with the free market in hope of sparking economic recovery. The result is that instead of recovery, we are experiencing further distress as the Euro crisis intensifies and even Brazil and China’s economies slow.

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One of the main culprits behind the escalation of government interference is the resurgence of the belief that “government does it better.” This sentiment usually focuses on China as the example where government “does it better” than the private sector. These refrains are eerily familiar to those about the Soviet Union, Mao’s China, and Japan à la 1980. But China’s growth over the past 20 years reflects less on how well they are doing today than on how horribly their government’s decisions impoverished China for many decades. From destitute starvation, there is only one direction: up. And even still, the little-known truth is that China’s dollar growth in per capita income remains below that achieved in the U.S. For example, in 2010, per capita income in China rose by $770 (at purchasing power parity), versus $1,870 in the U.S. That is, if U.S. living standards in 2010 rose by China’s, we would be in an even worse economic situation than we have today. The irony is that the belief in big government is occurring even as trust in the U.S. government (and most other governments) is near an all-time low. Big governments around the world generally result in concentrations of unemployment among the young and immigrants, as these individuals tend not to be voters. In addition, since labor market entrants do not yet have a job, the red tape and regulatory burdens associated with hiring fall disproportionately on them (to the benefit of those with jobs). As of March 2012, unemployment rates among 16 to 24-year-olds stood at 21.9% in the U.K., 35.9% in Italy, 51.1% in Spain, 16.4% in the U.S., and 21.8% in France.

Spending

The rise in belief of big government rests partly on the Keynesian theory that government spending has a multiplier about 1.5. In other words, some believe governments can spend their way to growth. If this was the case, the economies of the world would be experiencing unprecedented booms. Instead, they are stagnating. One thing on which everyone agrees is that Europe and the Euro face great uncertainty, as their social insurance promises and government spending relative to tax revenues place ever greater strains on their economies.

Only when European governments (or the European Central Bank) pump $1 trillion into Portugal, Ireland, Greece, Italy, and Spain (PIGIS) does the European economy muddle along. But once such injections are three months old, the weight of the long-term stress reappears. These short-term “fixes” have fixed nothing.

Like cortisone shots for athletes, they mask rather than cure the ailment, increasing the risk of even greater injury. As the actual economic outcomes have consistently fallen far short of the predictions of Keynesian multiplier models, Keynesian spending proponents simply say, “It would have been even worse absent this spending, so we need even more spending to stimulate the economy.” This is baffling given the presence of a simple alternative explanation: their models are wrong. In fact, sub-par economic growth in the presence of high levels of government spending is exactly the prediction of the microeconomic model that says there is no free lunch. This model argues that increased government spending means less private spending. This is because every fiscal action has an (almost) equal and opposite reaction. Thus, huge deficit spending causes private spending to decline as the private sector realizes that it has a greater future tax liability of equal magnitude. We have witnessed this in the U.S., almost dollar-for-dollar in deficit spending. This phenomenon is known as Ricardian Equivalence; recent experience has confirmed it as more than a theoretical concept, with private debt falling by an almost exactly equal amount as government debt has risen. This means that reduced government spending (and hence deficits) is causing offsetting increases in private spending. And since private spending is more productive than public spending, economic growth declines with increased government spending. Not only does the entire argument that more federal spending is needed to stimulate the economy run counter to common sense and the global experience over the past 50 years; it is absurd at face value. It completely ignores the nature of government spending.

We can turn to China for an example. As was the case in the former Soviet Union and Japan, much of the government-directed output created in China today is of little worth. This is not to say that China has not made enormous progress in terms of improving infrastructure (an important government function), but rather that much of its spending is valued at (but not worth) full cost. That is, the U.S. is not the only country in which governments build bridges from nowhere to nowhere. Notable examples of this are China’s ghost cities, which were built at great cost, yet sit unoccupied. These projects boosted measured GDP as surely as did the endless security spending undertaken in the former Soviet bloc. But such wasteful expenditures add nothing to the nation’s well being.

Furthermore, would you expect enhanced growth if the U.S. government spent $5 trillion invading Canada? Or if they decided to spend $15 trillion building a floating bridge to France? Of course not. Such government spending would be destructive and wasteful, and would cause crushing economic declines as the money was redirected from productive private consumption and investment. It is the quality, not quantity, of government spending that matters for growth. Large and rapid increases in government spending are almost always destructive; as there is no way large sums of money can be quickly and prudently deployed “from on high,” particularly if this is the outcome of political horse trading. Thus, any reductions in federal spending would be welcome as commensurately fewer resources will need to be taken away from the private sector.

Regulation

Every economic bust creates calls for more extensive government regulation, in order to impede future financial fluctuations. The Obama administration continues to add more regulatory measures in the mistaken belief that it can regulate excessive behavior out of existence. However, most regulations are poorly conceived and hinder economic growth, while yielding no behavioral improvement. History shows that regulatory overload holds market forces hostage, leaving investors in regulatory purgatory. Increases in regulation induce prolonged flats in the stock market, reflecting an inconsistent environment that is not conducive to economic growth. The stock market flats of the 1970s, and since 1998, partially reflect regulatory activity under both the Bush and Obama administrations. The 1970s were defined by the policies of Presidents Nixon and Carter, who added a myriad of regulatory bodies to the government, such as the Environmental Protection Agency (EPA) and the Consumer Product Safety Commission (CPSC). The effects were clear, with the Dow Jones Industrial Average and the S&P 500 decreasing by 22% and 26%, respectively.

A study of the market reveals the same pattern of regulatory growth and economic stagnation. From 2001 through today, the Dow and the S&P 500 have only seen gains of 15% and 6%, respectively, compared with the 380% growth seen over the same time span beginning in the 1980s. From the peak in 2007 to the lows of early 2009, the Dow, the S&P 500, and the NASDAQ indices all declined by about 50% in response to unprecedented government tinkering. As of mid-June 2012, the Dow and the S&P 500 are still 11% and 16% below their respective 2007 highs, while only NASDAQ has managed to surpass the previous high, by 0.3%. Recent measures such as Dodd-Frank, SOX, and the hotly contested Patient Protection and Affordable Care Act (Obamacare) do little but add to the bureaucratic mess that is American government.

A look at the number of pages in the Federal Register reveals that the current state of affairs is starting to follow a trend last seen in the late 1970s. As of 2011, the number of pages in the Register stood at over 82,000, the highest level since 2000 and the third highest level ever recorded. The new regulatory efforts continue to undermine the business sector and discourage growth in a fragile economy.

The recent Jumpstart Our Business Startups (JOBS) Act highlights the fundamental flaw of increased regulation. In the name of spurring entrepreneurial activity, the JOBS Act defines how a company should be regulated as it grows larger, allowing smaller firms easier regulatory access to capital. But if lesser regulatory oversight is good for small firms, on what basis is increased regulation justified for larger, more established companies? As regulatory legislation becomes increasingly burdensome, businesses are at the mercy of an unfamiliar and ever changing political landscape. Without certainty of the rules of the game and a stable business environment, companies sit in a regulatory purgatory, unable to raise capital or hire workers. This means they cannot drive the economy forward. The strongest period of American growth coincided with Ronald Reagan’s presidency. As part of Reaganomics, the Reagan administration implemented measures to reverse the legislation signed during the Nixon-Carter era. Reagan appointees to the EPA, CPSC, Energy, and other departments pulled in their regulatory talons, and regulatory agencies saw deep real budget cuts and steep reductions in their regulatory power. It was not an accident that by the time Reagan left office, both the Dow and the S&P 500 were up approximately 160%. The country had been pulled out of regulatory purgatory and put on the track for sustained expansion.

Monetary Policy

The “government does it better” mentality also extends to central banks, which have aggressively been using monetary policy with unprecedented interventions in a futile attempt to prop up failing economies. Remember these agencies miserably failed in their job of bank oversight. They are hardly omnipotent! The initial quantitative easing (QE1) was, for the most part, justified in order to ensure that the banking system did not fail (even if it should have, given excessive risk-taking). But the combination of the Fed subsequently keeping interest rates absurdly low and QE2 has only served to distort investment decisions beyond all recognition. The Fed is intentionally forcing you to take on risk by setting the short-term rate at zero and forcing down long-term yields via quantitative easing.

Fundamentally, the Fed is commanding you to “choose your poison:”

• Stay in cash and receive zero return as inflation runs 3-5%.
• Price your investments off of 10-year Treasury yields of 2% and assume that rates do not rise, running the risk of rapid interest rate increases if the federal government is unable to finance its next debt auction.
• Or pursue alternatives that involve greater business risk than you have previously undertaken (for example, buying single-family homes to rent in an attempt to find yield not available via buying traditional garden apartments).

In each case, you take on greater risk than you have at any time in your life. Is it any wonder that you are confused? Welcome to the large and non-exclusive club of confused decision-makers. We are living in an “Alice in Wonderland” world, where sovereign credit downgrades may reduce their debt yields, and the demand for safety is such that negative expected real yields are being paid on U.S. and German government debt. The simple truth is that no one knows the answer to these questions. Even highly informed opinions on these matters are based on some educated guesses, logic, extensions of normal behavior to very abnormal conditions, and occasionally a tiny bit of related history. In fact, not even the Fed knows what the Fed will do in the future, as they too have never experienced such conditions that exist today. This is not to suggest that Mr. Bernanke and his Fed are evil or mal-intended, but rather that he is overmatched in his job. But then, anyone would be overmatched if assigned the job of fixing the “right” price for any important commodity (like money). Milton Friedman was the master at criticizing the conceit of Fed officials who believe that they can set the “right” interest rate. One of Friedman’s great insights was that determining the “right” interest rate is impossible, and the Fed’s constant interventions simply lead to unintended adverse consequences; hence his long support of rules of Fed behavior, rather than discretionary Fed interest rate setting.

The U.S. has come to resemble the Soviet Union, where attempts to set prices led to cascading unintended market distortions, which reverberated across the economy, greatly reducing economic growth. Current Fed policy is nothing more than raw price manipulation driven by a conceit that the Fed knows better than the market. The Fed’s low rate policy has stolen billions of dollars from savers, while creating artificial incentives to take unknown risks. Cutting interest rates in an attempt to stimulate sustained economic activity focuses solely on the incentives facing borrowers, while ignoring the fact that lenders face offsetting disincentives. Specifically, why lend long-term at low rates rather than wait until rates rise?

The Fed’s zero rate policy has been an unmitigated disaster for millions of retirees, who have seen the income derived from their life savings fall to zero, due to near zero interest rates. These people have had to liquidate far more of their life savings than they anticipated, leaving them exposed should they live “too long.” Their heightened risk of running out of assets causes them to reduce their spending, even as the government attempts to stimulate consumption. Meanwhile, Baby Boomers are realizing that the inheritance they once thought they would receive from their parents is rapidly being liquidated or devalued, leading to reduced Boomer consumption. As in physics, every action has an equal and opposite reaction.

Taxes

There is a great deal of talk about the Fiscal Cliff that promises to unfold in January absent government action. Specifically, taxes are set to rise when the Bush cuts sunset, while mandated federal spending cuts are also scheduled to go into effect at that time. As discussed previously, a reduction in federal spending would actually help the economy, as a decrease in public spending increases private spending according to Ricardian equivalence.

The other part of the Fiscal Cliff relates to increased taxes. This raises a very real risk of reduced economic growth. Research by the former chairperson of President Obama’s Council of Economic Advisors, Christine Romer, indicates that a 1% increase in taxes generates almost 3% lower GDP. And a recent survey of numerous economic studies on this topic concludes that every 100-bp increase in taxes reduces GDP growth by 15 bps: that is, a multiplier of 0.85, not the 1.5 multiplier commonly asserted by Keynesian proponents. This is the real Fiscal Cliff danger, which lurks if taxes are increased in January.

Unfamiliar Investment Landscape

These government interventions have distorted the investment landscape beyond recognition. Spending has created unsustainably large deficits around the world, and an uncertain political climate is making it hard to know exactly when and how those deficits will be tamed. The best businesses can do is spend less to account for the almost certain rise in future taxes. Increased and uncertain regulations are further incentivizing investors to wait and see; it makes much more sense to invest when there is stability and confidence that regulations will remain fairly constant for the length of the investment. Moreover, central banks around the world are slashing interest rates to the point where investors are forced to take on more risk than ever before. In all, government activity is now deterring the very investment it was hoping to spur. Governments need to understand that businesses need stability and a degree of freedom to grow and create jobs. When that change in mentality occurs, the economy will be back on the path towards stable growth.

Download the PDF version here.

Every executive with whom we speak expresses utter confusion about the state of the global and U.S. economy and capital markets. As a result, they are in a muddle about their investment strategies. They closely monitor economic and capital market data for signs that “everything is all right,” yet even as the U.S. economy grows at a seemingly healthy rate, they remain extraordinarily ill at ease. Why?

Simply stated, this discomfort reflects the fact that even though U.S. real GDP and employment are growing at moderately healthy paces, we remain in totally uncharted waters in terms of both the economy and our capital markets. And when private decision makers are in unfamiliar (and unrecognizable) landscapes, they act very cautiously.

For example, we have not seen in our lifetime federal budget deficits as large as those which currently exist. Not only is U.S. federal spending as a percent of GDP at a peace-time high, but federal revenues as a percent of GDP are well below their historic norm, resulting in unprecedented budget deficits. Compounding the problem of unprecedented U.S. budget deficits is the fact that there is neither political leadership nor a political consensus on how to bring the federal budget back in balance. This is creating a situation in which the only clarity is that the current situation is not sustainable.

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Another aspect of uncharted waters is that outstanding U.S. federal debt has doubled in the last four years, resulting in a nearly $100,000 per household liability (and rising at the rate of $12,000 per year) associated with that debt. Who will buy this mounting debt, and at what rate, are questions everyone asks but for which there are no clear answers. Over the past 18 months, the Federal Reserve has been the primary purchaser of newly issued federal debt, with the private sector a net seller. Will the Fed be able and willing to purchase newly issued federal debt? This is an important question, as the Fed is artificially keeping interest rates near zero across the yield curve. But no one (including the Fed) knows what the Fed will do, because we have never before witnessed such monetary expansion by the Fed. And since one underestimates the staying power of a determined sovereign at one’s peril, we cannot be sure if today’s interest rate environment will continue another day, week, month, year, or decade. All we know is that since the collapse of Lehman Brothers, the Fed has increased the monetary base by some $2 trillion, nearly $700 billion of which has occurred over the past 18 months. The result is an unfathomable growth in the monetary base, with nearly four times as much money today as existed on September 1, 2008.

A related element of uncertainty is that the 10-year Treasury yield today is far lower than the current rate of inflation, even as inflation is rising. Making matters even more confusing is that sovereign credit downgrades have often resulted in lower — not higher — interest rates. And as seen in Figure 1 in our economic overview article, many indicators for the U.S. economy are in excess of a standard deviation beyond their historic patterns. Such deviations are well beyond the experience of today’s decision-makers.

Making the confusion greater is the fact that these phenomena are not limited to the U.S., but rather exist around the world. In fact, our problems are not as bad as those found in most European countries; as result, our exchange rate has strengthened even as we weaken, because we have weakened less than Europe. And Japan is in even worse shape yet.

One thing on which everyone agrees is that Europe and the Euro face great uncertainty, as their social insurance promises and government spending relative to tax revenues place ever greater strains on their economies. Only when European governments (or the European Central Bank) pump $1 trillion into Portugal, Ireland, Greece, Italy, and Spain (PIGIS) does the European economy muddle along. But once such injections are three months old, the weight of the long-term stress reappears. These short-term “fixes” have fixed nothing. Like cortisone shots for athletes, they mask rather than cure the ailment, increasing the risk of even greater injury.

Adding to the widespread confusion are near-record oil prices driven by growing global GDP in the face of relatively flat oil production. Specifically, real global GDP has risen by approximately 40% over the last decade, while oil production has grown by a mere 10% (and by 0% over the last eight years). The short-term inelasticity of oil demand means that large run-ups in oil prices have occurred even as shale fracking has caused natural gas prices to plummet. And what happens to oil prices as Syria tumbles, Egypt grumbles, and the Iranian situation darkens? Again, no one knows. These uncertainties are well beyond our normal bounds of experience and are occurring in the midst of a highly contentious election year in the U.S. and around the globe (including China’s recently installed government).

Meanwhile, the Fed is intentionally forcing you to take on risk by setting the short-term rate at zero and forcing down long-term yields via quantitative easing. These interventions are historic in magnitude. The truth is that not even the Fed knows what the Fed will do in the future, as they too have never experienced such conditions that exist today.

Fundamentally, the Fed is commanding you to “choose your poison”:

1. Stay in cash and receive zero return as inflation runs 3-5%.
2. Price your investments off of 10-year Treasury yields of 2% and assume that rates do not rise, running the risk of rapid interest rate increases if the federal government is unable to finance its next debt auction.
3. Or pursue alternatives that involve greater business risk than you have previously undertaken (for example, buying single-family homes to rent in an attempt to find yield not available via buying traditional garden apartments).

In each case, you take on greater risk than you have at any time in your life. Is it any wonder that you are confused? Welcome to the large and non-exclusive club of confused decision-makers. We are living in an “Alice in Wonderland” world, where sovereign credit downgrades may reduce their debt yields, and the demand for safety is such that negative expected real yields are being paid on U.S. and German government debt. The simple truth is that no one knows the answers to these questions. Even highly informed opinions on these matters are based on some educated guesses, logic, extensions of normal behavior to very abnormal conditions, and occasionally a tiny bit of related history. Thus, however risky things appear, we believe that they are even riskier.

Founded in 2006 to fulfill the unmet need of providing dedicated commercial property solutions in the region, NAI Mountain Commercial is the only full-service commercial real estate firm from Summit to Pitkin County. The firm is the leading regional provider of acquisition, disposition, leasing, tenant representation, property management and asset management services. NAI Mountain Commercial provides services for all types of commercial real estate assets including office, retail, industrial, hospitality, multi-family and mixed-use properties and works with many of the region’s largest owners and investors of commercial real estate.

“By joining NAI, we are gaining the capabilities and resources of a global leader, while simultaneously retaining our excellent team, local knowledge and market presence” stated NAI Mountain Commercial President Michael Pearson. “NAI gives us new technology, tools, shared resources, marketing, and access to over 350 offices worldwide, which will enable us to develop new opportunities for clients looking for extensive representation or international resources.

“NAI Global is very proud to add Vail’s premier commercial real estate service provider to our growing network,” said NAI Global Executive Vice President David Blanchard. “Mike and his team have done an incredible job of building NAI Mountain Commercial into the market leader in every sense of the word.  NAI Mountain Commercial will be an invaluable resource to NAI clients around the world seeking investment, growth and disposition services throughout the entire Resort Market region.”

NAI Mountain Commercial (www.naimountain.com / +1 970 476 6415) is located at 953 South Frontage Road, Suite#219, Vail, Colorado 81657. Headquartered in Princeton, NJ, NAI Global manages a network of 350 offices and 5,000 professionals in 55 countries around the world.

“The global economic recovery has been hindered by a massive game of Old Maid.  Who will be forced to bear the losses generated during the downturn? Only when the losses are put behind us will the world be able to focus on creating new wealth,” said Dr. Linneman. “There is simply not enough European bank capital to cover the losses associated with Greece and any defaults by Spain, Portugal or Italy.”

On the U.S. economy, Dr. Linneman notes that “everyone, including bearish forecasters, has been shocked by the weakness of the recovery to date. Absent a predictable government, the U.S. has slipped into the abyss which has long punished countries such as Japan and Italy.”

The white paper addresses the future of the Euro, the rapid growth and rising vulnerabilities of the Chinese and Indian economies, and the potential for long-term economic malaise in the United States absent leadership from any branch of the U.S. government.

Global Economic Round-Up follows European Debt Crisis where Dr. Linneman analyses the European sovereign debt crises and the impact of a default on the Euro Zone countries and banks. NAI Global’s white papers and research resources are available for free download by clicking here.

C-III is led by CEO Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. (NYSE:IFS).

“The completion of this transaction represents a significant step forward in our strategy to build a fully diversified commercial real estate services company,” said Mr. Farkas. “With the NAI Global acquisition, we are gaining the world’s leading commercial real estate network and a tremendous foundation for future growth.  As we begin a new year, we look forward to partnering with the NAI team to provide enhanced services to the commercial and institutional real estate markets they serve as well as continuing to take advantage of other opportunities to grow and expand our platform.”

“We are thrilled to be joining forces with C-III and excited about the opportunity to deliver an even broader range of services to our members and add greater value to our collective corporate and investment clients. We look forward to tapping into their great resources and expertise to help C-III clients strategically optimize their commercial real estate assets,” said Jeffrey M. Finn, President and CEO of NAI Global.

NAI Global will continue to operate as a separate company under its current management. NAI manages a network of commercial real estate firms comprising 5,000 professionals and 350 offices in the US and 55 countries throughout the world.  NAI’s network members provide a full spectrum of corporate, financial, technology and project management services.

C-III commenced operations with the purchase of Centerline Capital Group’s institutional real estate debt fund management and commercial mortgage loan servicing businesses in March 2010.  Since that time, C-III has successfully launched mortgage origination, investment sales and title insurance businesses, and expanded its principal investment, loan origination, fund management and primary and special loan servicing businesses, including acquiring the special servicing and CDO management businesses of JER Partners in August 2011.  In November 2011, C-III acquired two affiliated multifamily property management businesses – U.S. Residential Group and Pacific West Management – which now operate on a combined basis under the U.S. Residential Group name.

Financial terms of the NAI Global acquisition were not disclosed.

About C-III Capital Partners

C-III Capital Partners LLC is a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management, CDO management, principal investment, title services and multifamily property management.  Our principal place of business is located in Irving, TX, and we have additional offices in New York, NY, Greenville, SC, McLean, VA, Chicago, IL, Dallas, TX and Nashville, TN.

About NAI Global

NAI Global (www.naiglobal.com) is the largest network of independent commercial real estate firms worldwide, comprised of over 5,000 professionals in 55 countries in more than 350 offices. NAI advisors work in tandem with our global management team to ensure our clients strategically optimize their real estate assets. NAI offices complete over $45 billion in combined transactions annually and manage 300+ million square feet of commercial space.

“Europe’s sovereign debt crises are changing daily, yet are making little progress toward long-term solutions. The only questions are when, how and who will be left holding the bag?” said Dr. Linneman. “The principal danger is that when Greece defaults, either voluntarily or involuntarily, there will be considerable capital market uncertainty and renewed rounds of government intervention to save local banks.”

The white paper examines strategies to minimize the impact from a Greek default on other European countries, the possibility of default in other Euro Zone countries and presents possible real estate investment opportunities that may arise as a result of distress in the European banking sector.

European Debt Crisis analyses the European sovereign debt crises and the impact of a default on the Euro Zone countries and banks.

This latest white paper follows Beware of Inflation, where Dr. Linneman assesses the potential destructive power of inflation and its impact on commercial real estate. NAI Global’s white papers and research resources are available for free download at www.naiglobal.com under Publications/Articles & White Papers.