NAI Global - Commercial Real Estate Blogs

Calm Before the Storm

As the haunting sound of the Vuvuzela becomes a distant memory, is this the calm before the storm? Is a breakup of the Eurozone looming on the horizon?

Confused About Bolivia’s Credit Rating? So Are a Lot of People

Either some of the credit rating people are utilising one of Bolivia’s more controversial agricultural byproducts or I do not fully understand how credit rating truly functions. Bolivia, led by a far-left, bitter, anti-capitalism President, just received an upgrade in its credit rating from B- to B with the added recommendation of a positive outlook. Hellooo!? Have you heard of ALBA? Are you aware of what is happening in Venezuela, Bolivia’s economic and political soul mate? I do not think that the folks at S&P are paying attention to current events; President Evo Morales has nationalised the hydrocarbons sector, the country’s telephone company and is threatening (promising?) to wrest other companies and “strategic” sectors from the hands of those evil, conspiring free marketers that attract investment and create jobs. Talk about counter-intuitive logic.

Multifamily Development Gains Momentum in Southern California

Los Angeles developers have unveiled plans for 900 new multifamily units, some already under construction, indicating that multifamily building has remained strong while other sectors have stalled during the recession.

Brokers Build “Green” Expertise

With an ever increasing number of “green” commercial properties populating the national landscape, many real estate brokers are developing the expertise necessary to discuss the impact of energy efficiency with their clients.

FDI in Latin America on the Rebound

According to news from the UN Economic Commission on Latin America and the Caribbean, FDI is roaring back into the region after last year having dropped by 42% (US$76.7 billion) over the previous year (US$131.9 billion). Investors are confident that the region is indeed healthy and rebounding where it needs to. The commission foresees an increase in FDI of between 40-50% and should surpass US$100 billion. This would be at least a 20% increase over the region’s FDI in 2009, but still below the US$131.9 billion record achieved in 2008. Although the Commission attributes the increased FDI to improved monetary policies that boost domestic demand and higher commodity prices, I attribute it also to the political and economic stability and their institutionalisation within most countries in the region, the diversification of industry within the region’s larger and some medium–sized economies (e.g. Brazil, Mexico, Chile, Colombia, Argentina, Costa Rica) and slightly improved fiscal and investment policies. If truth be told, most of the companies now increasing or beginning their investment in the region had their sights set on it even during the deepest point of the economic crisis. They could not tactically or financially divert investment funds to Latin America.

Restructuring Process Slows as More Distressed Properties Enter Special Servicing

Lenders and servicers continue to be inundated with properties entering special servicing, expanding from multi-family housing to office, retail and other commercial assets. As we originally anticipated, 2012 will be the major year for defaults in commercial properties, especially office properties throughout the United States. Momentum has slowed as servicers are bogged with the influx of properties. 

Robust Recovery in 2010 Will Just Return U.S. to Middling Economy, Says NAI Global Chief Economist Dr. Peter Linneman

Strong, steady economic growth over the next two years will just return the U.S. economy to a pre-2008 level, giving us back what we needlessly lost due to government-induced panic and poor lending practices, according to a new white paper from NAI Global Chief Economist Dr. Peter Linneman.  The white paper examines the overall outlook for the job market and provides a forecast for the next three years.

Manhattan Sees Decline in Vacancy Rates

For the first time in more than two years, office vacancy rates in Manhattan are on the decline. Vacancy rates dropped from 11.6% in the first quarter to just 10.8% at the end of the second quarter as nearly 7 million square feet of space was leased across the market.

 

There are still millions of square feet available, and buyers/tenants currently have the upper hand in sale/lease negotiations. With an uncertain economic recovery ahead, it is unknown if this drop in vacancy rates signals the start of the end of a difficult market, or if a double-dip recession will further delay a recovery market-wide.

Walmart Strategy Demonstrates Retailers’ Ongoing Demand for Warehouse/Distribution Space

In 2009, American retailers occupied more than 5 billion square feet of warehousing/distribution space. Although significant new leases are way down, retailers do continue to extend and/or renew their lease holdings. Many are attempting to downsize, but all are said to be reviewing their long-term warehousing strategies.

Record Vacancy Rates Keep the Heat on Las Vegas Rental Rates

In Las Vegas, the all-time high vacancy rate has been relentless in putting pressure on asking rents, which accelerated downward on an annualized basis for the fifth consecutive year. The question plaguing the Las Vegas Valley is: when is it our turn? Just as it has been doing for two years, Las Vegas’ commercial markets continue to let out slack, a phenomenon witnessed during the first quarter of 2010 as negative net absorption and price declines were reported throughout all sectors. The residential and commercial real estate sector for 2009 showed an increase in the volume of completed transactions but a reduction in the transaction amount.