Archive for July, 2010

New Feature: Investor Interest by Geography

Thursday, July 29th, 2010

This is not a new feature, but is one we have not discussed in detail on our blog. The topic of creating a set of indices came up during a back-and-forth with Marketwi.se. Tracking investor interest by geography is a standard feature which comes with every CRE Console listing. We ... More

MIT finds, “Monkeys hate booking losses”

Wednesday, July 28th, 2010

The topic of cap rates and treasury spreads morphed into a discussion on the value of technical indicators. From there, it shifted to investor psychology. Marketwi.se's last post, "We Are All Just Monkey's" was a combination of pricing, technical indicators, market efficiency (or lack thereof) and overall investor psychology. One of ... More

Dr. Geltner: CRE Prices will return…. when?

Wednesday, July 28th, 2010

In his most recent Professor's Comment's newsletter, Dr. David Geltner included an intriguing projection: "the CPPI may not regain its 2007 peak value of 192 again until the decade of the 2030s or beyond." Note the graph below; it assumes the in approximate long-run equilibrium in 2000, and that nominal property ... More

Cap rates, technical indicators and more…

Monday, July 26th, 2010

While technical indicators are used frequently to analyze stock investments, it is a technique seldom (if ever) used in commercial real estate. When Marketwi.se used it to analyze Cap Rate to Treasury spreads, it turned the conversation on its ear. We were fascinated by this approach and include their chart below ... More

Moody’s/REAL CPPI increases 3.6% in May

Saturday, July 24th, 2010

The Moody's/REAL All Property Type Aggregate Index registered a 3.6% increase in CRE prices in May. This means back-to-back months of price increases. With this increase the CPPI is now 8.6% since its October 2009 low. Prices are down 6.3% from this time last year and 33.0% lower than they ... More

Wachovia Shops Apartment Loans

Saturday, July 24th, 2010

REAlert.com reports that Wachovia has engaged Eastdil Secured to shop a couple of defaulted mortgages secured by two stabilized apartment complexes in Atlanta. One of the loans, with an unpaid balance of $27.6 million, is secured by the 242-unit Icon apartments, while the other, with a principal balance of ... More

Must Read: PIMCO’s CRE Project

Monday, July 19th, 2010

One of the most interesting research articles we've read this month is the PIMCO U.S. Commercial Real Estate Project. As the Wall Street Journal just reported back-to-back months of Moody's CPPI increases, PIMCO's view is that the index is virtually meaningless. National price indices such as the Moody’s Commercial Property ... More

Cap Rate to 10-year Treasury Spreads

Sunday, July 18th, 2010

A recent post titled "CRE Cap Rates vs. 10 Year Treasury" over at Marketwi.se reminded us of a Cornerstone Advisers research report titled "Cap Rates and Real Estate Cycles". In this report, Cornerstone published a graph which tracked NCREIF Cap Rates v.s 10-Year T-Bill yields since 1983. The NCREIF may ... More

Kennedy Wilson buys Noho 14

Tuesday, July 13th, 2010

Back in December, we reported that Bank of America had taken back JSM Development's NoHo 14 project in North Hollywood. Curbed recently reported Kennedy Wilson's purchase of the property with Guardian Life Insurance Company and RECP/Urban Partners as equity partners and Cigna providing $40 million in fixed rate financing. Sean Deasy ... More

Korpacz Cap Rate Trends – Q2 2010

Sunday, July 11th, 2010

PricewaterhouseCoopers recently released their Q2 2010 Korpacz Real Estate Investor Survey results. Susan Smith, the editor-in-chief and a director in PwC's real estate practice noted: 'While most investors sense that the worst is over in terms of market deterioration, supply greatly outweighs demand across all property sectors keeping overall vacancy ... More