Posts tagged NAI Global Executives
Gulf Coast Commercial Property Experts See No Long-Term Effect on Supply or Demand
The BP oil spill that has continued for more than 60 days has caused widespread environmental damage and is already affecting shipping, fishing and tourism, but commercial property experts in the region do not believe the accident will have a significant impact on Gulf Coast real estate markets, according to a special report released today by NAI Global.
Commercial real estate leaders from markets bordering the Gulf of Mexico and renowned economist Dr. Peter Linneman weigh in on how experts are quantifying the impact of the oil spill, and provide regional on-the-ground observations of how property markets are faring today. While some markets may see a temporary up-tick resulting from the cleanup efforts, most do not expect any long-term impact, positive or negative, on supply or demand, the primary factors influencing rental rates and property values. More >
I have attended RealComm off an on for many years; seen many promises of technology magic to come, hints of what may be possible in the future and heard about new developments across the world that would soon impact the real estate industry. While this year’s conference was smaller due to the recession, it was much more dramatic in new technology and business practices actually being used today! There was real content with emerging metrics produced by real practitioners with real projects this time… more than any time I have ever seen. In some cases I was almost knocked off my chair in seeing and hearing what is going on throughout the world in real estate technology. Jim Young and Howard Berger and their staff are to be commended for their perseverance, now beginning to pay off with outstanding results! More >
In the U.S., there are currently 7,881 FDIC insured institutions. Only a minority of these banks have ever made a commercial real estate loan. Thus a small minority of FDIC insured institutions currently possess the majority of the distressed commercial debt.
A Congressional Oversight Panel report dated February 10, 2010, states that between 2010 and 2014 approximately $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are “underwater” – that is, the borrower owes more than the underlying property is currently worth. More >
Unstable global credit markets, job losses, and a tottering U.S. economy subdue prospects for cities and suburbs from coast to coast in 2010. In “a flight to quality,” investors hunker down in familiar locations. Markets performing well before the crash will perform better coming out of it; markets lagging before will continue to lag.
- Global gateway markets on the East and West coasts featuring international airports, ports, and major commercial centers.
- Cities and urbanizing infill suburbs with 24-hour attributes — upscale, pedestrian-friendly neighborhoods; convenient office, retail, entertainment, and recreation districts; mass transit alternatives to driving; good schools (public and/or private); and relatively safe streets.
- Brainpower centers — places that offer a dynamic combination of colleges and universities, high-paying industries — high tech, biotech, finance, and health care (medical centers, drug companies) — and government offices.
- Barrier-to-entry markets where geographic constraints — rivers, lakes, oceans, and mountains — limit development and help control overbuilding.
Lenders and servicers are being inundated with defaulting loans. Banks have been exhibiting an “extend and pretend” mentality, with loans being extended in hopes of future real estate appreciation. This has been a gradual process with banks spreading out their markdowns to boost quarterly earnings.
However, this attitude is quickly coming to an end as lenders realize that marking to market and taking write-downs will be required to accelerate the process to a meaningful “reset” so that the capital markets may stabilize and normalize again. Lenders realize that their performing loan may risk leaning towards non-performing loan as the capital markets remain relatively frozen and securitizations are slow to aggregate loans to restart the CMBS markets. More >