Three Reasons Why Treasury Rise Might Not Affect Cap Rates
August 29, 2013 — The real estate investment community took note of the recent 100-basis-point rise in 10-year Treasury rates. Some investors may have briefly hit the ‘pause’ button on deals when the increase was at its steepest slope. But so far, it seems that the narrowing spread between Treasuries and cap rates –not to mention the sharp increase in interest rates– has not had much of an effect on commercial real estate values.
To the Point
July 7, 2013 — Our industry is affected by changes in so many areas—from demographics to capital markets to technology—and the pace of change is accelerating. To keep up, people need solid information, and they need it fast. This blog will provide a forum for idea-sharing specific to the topics and important issues that we face within the commercial real estate space.
Five Steps to a Safe CMBS Exit Strategy
July 1, 2013 — The commercial mortgage-backed securities market is back, with investment levels not seen since the last market peak. Current yields are strong compared to many investment types, and loans originated in the past three years are showing no signs of delinquency.
Look beyond ‘bricks and sticks’ to fix CRE’s future
March 1, 2013 — As competition to close new commercial real estate deals heats up, so does the pressure to loosen credit standards, lapse into overly-optimistic underwriting and ignore the operational context in which the asset sits. If industry participants are not careful, history could repeat itself in the very process of resolving the fallout from The Great Recession. To be sure, there will be plenty of occasions ahead to apply lessons learned in the deepest trenches of the ‘new normal’. In 2007 alone, loan originations reached $570 billion, helping set the stage for continued focus on the massive amount of loan maturities yet to occur.
CMBS: Feeding the Elephant in the Room
February 9, 2012 — At the height of the U.S. property boom from 2005 to 2007, the allure of Commercial Mortgage-Backed Securities (CMBS) seemed without limit. During that 3-year period, more than 30,000 loans were pooled into $602 billion of new CMBS bonds. Then came the reckoning now recorded as the Great Recession when the CMBS industry collapsed, issuing a paltry $28 billion in three combined years from 2008 to 2010. In 2011, the fragile recovery in commercial real estate included $32.7 billion in CMBS.