Surban Office Market in Limbo

Office buildings in New York, Washington, and San Francisco have been showing an unexpected recovery. Unfortunately, the surburban market hasn't been so lucky. Vacancy rates have started to fall in cities while staying flat in the suburbs, in part due to declines in the surburban heavy seactors such as housing. The index tracking suburban office property values has stayed relatively flat after falling more than 42% from peaks.

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How Capital Markets are Altering Commercial Real Estate

The new role of the Commercial Real Estate broker.

This article does a great job detailing the value of the Capital markets on Commercial Real Estate especially now that the REITS have been so dominant. The success of public money to acquire and build large high quality portfolios is evident.

From the perspective of the Real Estate broker, it is also becoming very evident that the future of real estate will revolve around the availability of capital as banks continue to be bogged down with unresolved issues, the "restructuring" of Fannie and Freddie, and the economy looking to flounder even further. Capital structure and equity raising will be a key factor to getting most deals done. Gone are the days of relying on the buyer or others to bring in the capital to get the deal done. It now has to be part of the brokerage package. The game is definitely changing. 
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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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Yields surge for Fannie and Freddie mortgage bonds

Financial markets support for Fannie and Freddie bonds is very good news for multi-family. The last thing we want is a pull back on future financing.

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Signs of Recovery For Office Market

Subtle signs of recovery as the trophy office assets are moving. http://on.wsj.com/bt1dRz

SF Bay Area Multi-family Market

Nationwide apartment market continues on a steady recovery. Effective rents increased or remained unchanged from last quarter in 29 out of 30 markets, as is occupancy. Decreasing cap rates followed the reduction in interest rates and increased buyer activity, while new construction was virtually nonexistent. San Francisco Bay Area Multi-family parallels the nationwide market....Read more

Split on Standards Set to Widen

Financial Times reports that new proposals on accounting standards could loosen up the tight grip banks have on inventory. This appears to be very positive. Obviously pressure is not coming from the Real Estate Lobby nor from banks nor FDIC. The real pressure could come from equity markets who are having difficulty analyzing the real value of banks without the "mark to market" accounting.
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