U.S. Economy Holding Strong?

An interesting opinion into the strength of the U.S. economy. It doesn’t paint a very bright picture.
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What to do with $1.7 Trillion of Maturing Debt

Very interesting article focusing on what it’s going to take to deal with the maturing commercial mortgage debt: some $1.7 trillion between 2010 and 2015. The topic of discussion is also interestingly titled “Real Estate Markets 2011: What Factors Will Influence Your Decisions?” Stating that the availability of debt will be the biggest influence.

Looking from the trenches, it appears lenders are willing to extend with more time and more favorable loan terms. However, debt reduction and cram downs are becoming less common. Eventually there will be a need to "take the stuff off the books" but who knows when? It can't be too far away.

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Implications of Rising Interest Rates on CRE Recovery

With a 100 basis point increase in interest rates in the last four months, the natural reaction would be a decline in pricing for 2011 however with Multi Family, that will not necessarily be the case. Strong absorption rates nationwide and especially core markets are driving pro-forma underwriting. With local assets well informed principals are underwriting 5% rental increases annually for the next three years.
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CMBS Delinquency Rate: Smallest Jump Since 2009 - Increase of 17 Basis Points in June to 8.59%

http://www.trepp.com/m/Press_release/displayFile.cgi?input=treppwire201007.pdf

The Implications of a Falling Euro

Implications of a falling Euro could mean less foreign investment in U.S. real estate. The impact hopefully will not limit investment from the Asian sector.
Read the full article here --> http://bit.ly/bHhozY

Rental Fundamentals Improve Overnight

Good news for rental rates and retention nationwide. Retention rates have hit record highs.
National fundamentals have made dramatic improvements in the first quarter of 2010.
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GDP at 5.7%

The U.S. economy surged at the end of 2009, driven more by slower inventory liquidation than by consumer spending. Gross domestic product rose at a seasonally adjusted 5.7% annual rate from October through December, the Commerce Department said Friday in its first estimate of fourth-quarter GDP.

GDP has gone up two straight quarters, rising 2.2% in the third quarter after a year of contraction. In all of 2009, GDP fell 2.4%, the biggest drop for an entire year since 10.9% in 1946.

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