Fed Chair Yellen- Maybe we are turning Japanese

Actual and Expected Inflation in Japan
“Here, Japan’s recent history may be instructive: As shown in figure 9, survey measures of longer-term expected inflation in that country remained positive and stable even as that country experienced many years of persistent, mild deflation.” – Janet Yellen Sep. 24, 2015

Was talking about this just last week (again):

As a value guy like you it’s hard to figure out how buying something in the sixes on cap rate works out to be a good deal. But what if the Fed is trapped at the Zero Lower Bound and we are turning Japanese? Their ‘Lost Decade’ is now old enough to graduate with a Master’s degree and we’re following the exact same playbook. I offer last week’s Fed decision as exhibit #1. They would dearly love to raise rates just to prove they can but there’s just thin ice between us and

Continue reading Fed Chair Yellen- Maybe we are turning Japanese

Apartment & CRE Lending Today- great charts from MPFResearch

Apartment Building Investment and Commercial Real Estate Lending Today
Click on image for full size.

Great set of charts on apartment building investment loans vs. CRE and development lending. If recency bias has you thinking bubble check in with the demographics which show millennials are the largest population group in the country and 30% of them are still in their parents’ basement. As they unbundle they’ll be looking for apartments but they’ll be competing with a lot of empty nest boomers too. Demographics is destiny.

10yr Apartment Building Loan Rate Back On It’s Meds at 4.375%

10 year apartment building investment loan rates
Click on image for full size.

After showing signs of life in June and July the 10yr apartment building investment loan rate we track seems to be fully anesthetized once again and is resting comfortably at 4.375%. Meanwhile the ULI rate seemed to be steadily working its way lower, following the ten year Treasury down which got as low as 2.01%. That all ended with the Chinese stock market melt down and currency devaluation a couple weeks ago and drove the ULI rate up 27bp to 3.82%.

Chinese stock market has only fallen back to where it was in February
Click on image for full size.

Interestingly despite all the panic about the Continue reading 10yr Apartment Building Loan Rate Back On It’s Meds at 4.375%