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National Industrial Report - Midyear 2009 |
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Although recent positive trends have provided reason for guarded optimism and consumer confidence has improved, the recession persists and is likely to result in additional employment cuts and a decline in GDP this year.
Weak consumer spending, driven by job losses, a soft housing market and the propensity of Americans to save more,
will continue to suppress demand for foreign-made goods and reduce space demand from import-related businesses.
In the first quarter of 2009, GDP decreased at an annualized rate of 5.7 percent. The U.S. economy is forecast to shrink 2.9 percent this year, compared to a 1.1 percent annualized increase in 2008. In addition to the decline in U.S. GDP, a
slump in foreign economies will reduce demand for U.S. goods abroad and adversely affect warehouse space demand among export-related businesses.
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Medical Office Report - First Half 2009 |
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Medical Office Sector Remains Healthy in Ailing Economy
Unlike other asset types, medical office properties continue to garner investor demand by exhibiting considerable
resistance to the economic downturn.
Nonetheless, there are locales across the country where medical office
assets are underperforming, and in many instances, there is upward pressure on vacancy.
The segment, however, is
holding up better than other product types. Much of the economic resilience tempting investors can be attributed to
the positive state of the health care industry. The nation spends over $2 trillion on health care annually, more than
double U.S. expenditures on food, and health care spending is projected to exceed $3 trillion by 2013.
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Special Report Stimulus Package - May 2009 |
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Government Intervention, Bank Stress Tests Aim to
Restore Confidence — Will Measures be Enough?
Government stimulus and financial market intervention — already at unprecedented levels — have become even
more aggressive in the wake of a steeper recession and
escalating credit market woes. Government loan facilities
established last year are being modified, and new programs
have been proposed to help jumpstart stalled credit markets.
The first round of funding for the Troubled Assets Relief
Program (TARP) was originally intended to buy toxic assets
from financial institutions, but the capital was instead used
primarily to purchase equity shares of major banks. Therefore,
toxic assets, which include difficult-to-price mortgage-backed
securities, have remained on the balance sheets of financial
institutions. Uncertainty and the potential for significant
write-offs associated with these assets have subsequently hindered
banks’ ability and willingness to originate new loans.
With toxic assets still a crucial hurdle to be cleared before the
financial system can function effectively, the government has
become more focused on the issue. In addition to the stimulus
package, new programs aimed at restarting the market for these
assets have been proposed. While these measures are expected
to positively impact capital markets, it likely will require at
least six months for credit flows to improve measurably.
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National Economic and Office/Industrial Market Overview and Outlook - March 3, 2009 |
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Capital Markets Developments since December
2008
The Good News:
1. Inter-bank lending continues to
improve
2. LIBOR and TED spreads have stabilized
3. 10-Year
Treasury Yield at 2.76% remains at a very low level
4. Delinquencies
continue to be near historic lows but are rising
5. Deals are getting
done –local and regional banks, life insurance
companies
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2009 Real Estate Investment Outlook |
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Despite declining construction, office vacancy is
forecast to rise to the 17 percent range in 2009.
On a positive note, the
combination of reduced supply and the fact that most companies did not lease
significant excess space during the most recent expansion should prevent a
prolonged downturn, with the onset of a recovery likely in
2010.
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National Office Outlook Report - January 2009 |
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In order to better gauge investor sentiment in the
current
climate, National Real Estate Investor, Retail Traffic
and Marcus
& Millichap Real Estate Investment Services
conducted the sixth annual
real estate investment survey.
Of the 1,129 respondents, private investors
constitute the
largest group (47%). Respondents have been in the
industry
an average of 20 years and have an average of $32
million
invested in commercial real estate. Some 65% of
respondents indicate they are
currently invested in multiple
property sectors.
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1031 Exchange: Do's and Don'ts in Today's Market |
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Thanks to all the participants at our recent
November Conference Call with the topic - 1031 Exchange: Do's and Don'ts in
Today's Market.
Here you can download additional information on the
topics we covered:
Partnership
Issues
and
Seller Financing/Installment
Sales.
Click on the links below to
download.
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National Economic and Office/Industrial Market Overview and Outlook - October 16, 2008
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What Does the Future Hold?
1.Commercial
delinquencies will increase, but will remain within historical lows at
3-5%.
2.Treasuries in the short term will be remain range bound in the high
3% to low 4% range.
3.Treasuries will rise as the government finances
Emergency Economic Stabilization Credit Act and other support systems over next
12-18 months.
4.Spreads will eventually come in as markets stabilize but will
remain vulnerable to wide swings.
5.Distressed sales will increase but should
be distinguished from the state of the overall market place.
6. Interest
Rates will be in the 6.5% to 7.5% range
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Financial markets and the
commercial real estate sector
are in the midst of a somewhat unique shift.
Similar to
past turning points, excesses during the run-up are
causing a
traditional investor pullback as risk is repriced.
During the first quarter
of 2008, however, a full-blown credit
crunch emerged, with much different
characteristics than in
past cycles, due to the very nature of the financial
engineering
that fueled the boom. The pooling of a broad range of
home
loans, including high-risk subprime mortgages, into
Mortgage-Backed
Securities (MBS) made it easy and temporarily profitable for lenders to
increase originations and
relax underwriting standards. Home sales soared
well above
real demand drivers, leading to overbuilding and
significant
speculation. |
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