Building Porn
Filed under: Commercial Real Estate, The Economy and Current Affairs
Barry is one of my favorite writers on finance, the economy and politics but I don’t want to just be a feed for his blog. Some days however he’s got too much good stuff and today is a prime example… in a fun way. Check out this chart of the Skyscraper Index Building Bubble. Clicking on this link will take you to a large image. Clicking on the image below will take you to the original post on Barry’s blog:
Macro Economy is to Micro as Newtonian Mechanics is to Quantum. Must watch video.
The mainstream economic model grew out of physics envy says Bill Miller in this must watch video about the difference between economics on a personal level and economic systems, i.e. the US. Plus former Pimco Fed maven Paul Mculley on why standing up at a concert doesn’t get you a better view.
Seriously though you will never get a better explanation (in terms everyone can understand) of why standard monetary and fiscal policy don’t work in the current era, if it ever did.
Watch this 26 minute video and you will understand more about today’s economy… and how to fix it than 98% of the jabbering know-it-alls on TV- including 99.99% of the politicians and good chunk of the so-called experts. This is your opportunity to access top level outside-the-box talent that you would have to write a (very) big check to access any other way. And to get them both at once without having to attend the Paris conference of the Global Interdependence Center’s Society of Fellows last month.
McCulley presented Read more
Fannie, Freddie and Ginnie do $13.5B in apartment investment lending biz during Q1, +81% YoY.
Filed under: Multifamily Investments, The Economy and Current Affairs
Bonds backed by Fannie Mae and Freddie Mac tied to apartment investments soared to a record as the government-supported mortgage companies made low-cost loans on rental properties amid a continued slide in home values. Fannie Mae, Freddie Mac and Ginnie Mae sold $13.5 billion of securities tied to apartment buildings in the first quarter of 2012, an 81 percent increase from the year-earlier period and up from $5.2 billion issued in all of 2008, according to data compiled by Bloomberg. It’s the highest quarterly issuance since records began in 1993.
The interest rate for a 10-year, fixed multifamily loan Read more
Rising rates won’t necessarily lead to higher cap rates on CRE, apartment building investments. CBRE debt & equity podcast.
Filed under: Commercial Real Estate, Multifamily Investments, The Economy and Current Affairs
Great podcast on the financing market for CRE and apartment building investment with a look at potential impacts from events around the world.
“In this Global In-Sights podcast, Spencer Levy, Executive Managing Director for CBRE Capital Markets, shares his view on the commercial real estate debt and equity finance markets. What are current key sources of capital, what is the current pricing of CRE debt, and what are expectations going forward? Are there key sectors that are attracting most of the capital flows? What are expectations for interest rates and how are investors underwriting the possibility of an interest rate spike in the next 2 to 3 years? What are some of the key positive trends that we suggest our clients look out for when selecting markets in which to invest?”
A few bullet points: Read more
Phoenix economic and real estate market update with great graphics-
Elliott D. Pollack & Company researches the major markets in Arizona and last month in their report on Phoenix they had moderately good news and great graphics- click on the image to go to their PDF
OK, just one more from their informative and humorous presentation:
Couldn’t resist a Star Trek ref.
Why now is the right time for CRE and Apartment Building Investment. Video via Tom Barrack at Colony Capital
Filed under: Apartment Building Investment Cycle, Commercial Real Estate, Multifamily Investments, The Economy and Current Affairs
Tom is one of my mentors and I follow what he’s doing closely to learn from a pro in apartment building investing. Here’s a video 3fer with Tom on why now is the time, if you have any contrarian testosterone as he puts it (in other words you are a true value investor). See also my notes below with the exec sum in bold.
1st Video:
Tom Barrack on CNBC last week
Stock markets rise and fall, but investors with a long-term view will make money, real estate investor Tom Barrack of Colony Capital is a “slow money guy”. Barrack has $27 billion invested in real estate and $45 billion in assets around the world.
Overall in the US
Where I think we are is actually a great Read more
Foreclosure Tsunami 2.0 Is Coming, And Is About To Kill Any Hopes Of A “Housing Bottom”
Housing ‘Bottom’ about to drown in a new wave of foreclosures.
“In what appears to be surprising news for some, Reuters has an article titled “Americans brace for next foreclosure wave” whose key premise is that “a painful part two of the [housing] slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.” Thank the robosettlement, where in exchange for a few wrist slaps, contract law was thoroughly trampled by America’s attorneys general, but far more importantly to the country’s crony capitalist system, the foreclosure pipeline was once again unclogged, and whether one does or does not have a legal title on a given house, the banks are now fully in their right to foreclose on it. What this means also is that America’s record shadow housing inventory, which is far greater than any fabricated number the NAR reports on a monthly basis, is about to get unleashed on buyers, shifting the supply curve much further to the right, as up to 9 million new properties slowly but surely appear on the market. And while many will no longer be able to live mortgage free, forcing them to go out and rent (and no longer be able to afford incremental iGizmos), it also means that the prevalent price of homes is about to take another major tumble, making buffoons out of all those who, once again, called for a housing bottom in early 2012. Here’s the simple math: there will be no housing bottom until the 9 million excess homes clear.”
Shadow inventory about to go vertical
Two comments re: the bolded portions above. First, the legal principal protecting your property from unreasonable seizure has now been dismantled and absent a Supreme Court miracle gone forever. In fact holding clear title to a piece of property doesn’t even protect you from Read more
The Top 10 Fastest Growing US Cities. Own an apartment building investment in each.
Filed under: Multifamily Investments, The Economy and Current Affairs
Apartment investing is about where and when to buy properties; here’s 10 good ideas for the where part. Nice slide presentation via CNN/Money-
“Despite the housing bust and the recession, these 10 U.S. cities still managed to record population gains of 30% or more in the decade ending in 2010, according to the Census Bureau. The national average was less than 10% during that time.”
See the presentation here: 10 fastest growing U.S. cities
If you can’t Read more
Attention apartment investors: An entire generation has lost its interest in homeownership.
Filed under: Multifamily Investments, The Economy and Current Affairs
When it comes to apartment building investing one has to consider homeownership as competition for ‘our’ residents. But now in a post that’s part of his series on where the housing market stands today, Barry Ritholtz over at The Big Picture blog has this to say:
“There are many good reasons to believe that the 5.5 million foreclosures we have so far brings us only to the 5th inning of this real estate cycle. We are, in my best guess, barely halfway through the full course of foreclosures. By the time this entire unwind is complete, the United States may end up with a total of 8-10 million foreclosures. 
Therein lay the Psychology factor. Once we begin to see an increase in foreclosures, the data is going to be far less accommodating. Monthly prices start falling, fear levels rise, and a viscous cycle could begin. Consider the recent college grads, who typically form each wave of first time buyers. From their perspectives, this whole housing thing must seem absurd. Their observations about home ownership is not the American Dream, but rather, a nightmare. Yale professor Robert Shiller worries that we have lost an entire generation of potential home buyers.” [Emphasis mine] BTW, Shiller is co-author of the Case-Shiller index, a measure of the state of the housing market. Read more
National Apartment Building Vacancy Plummets, Defies Fourth-Quarter Seasonal Slowdown says report.
Filed under: Multifamily Investments, The Economy and Current Affairs
Marcus & Millichap’s latest report on Apartment Building Investment called “The Outlook” is just out today. In it they cover the usual national multifamily trends; rents up, vacancy down, economy slowly recovering, jobs growing but could be better. Then they take it a little deeper with these points (bel0w) then flesh it all out with charts demonstrating that things are really picking up for apartment building investors.
Here’s the exec sum:
- Expanding Production Capacity Signals Stronger Job Creation.
- Sustained employment growth underscores traction in the economy.
- Apartment demand surges, completions sink to new lows, and a sweeping recovery matures into an expansion cycle.
- Vacancy rates tighten across markets and asset classes, moving the sector into expansion.
- Foreclosed homes and government-sponsored REO-to-Rental program offer rental alternatives to apartments.
- Cap rate arbitrage and stabilizing operations create a compelling investment thesis for opportunistic and value-add strategies.
- Stronger job growth and household formation will provide a steady source of new entrants to the multifamily rental market. Read more
Connect with us!
