SOURCE: Seeking Alpha

REITs are likely to rebound in the next year or so and may prove to be the best investment possible this spring. As the bond market improves, being supported by the Fed, et al, the handsome yields some are paying based on their very low prices will shine through.

US property holding REITs have been hurt by the subprime worries and misconceptions, not by poor returns or bad realty investments. These small companies are not typically personnel heavy and leverage their properties with an average of 50% debt.

To see how well a REIT is fairing, check out the executive salaries and low overhead, as well as the few total personnel numbers. These are good indications of potential performers rather than the negative rumor mills.

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SOURCE: PR Newswire

Lenders geared toward the commercial and small business sectors will continue to see growth according to a report from the TowerGroup. This report discusses the challenges ahead as well as the bright spots that may be available to take advantage of.

The lenders will succeed by renewing their focus on traditional underwriting practices. The "three C's" of credit which include character, capacity, and collateral, are the basics that lenders will need to adhere to so they are able to continue growing with the market. Loan underwriters will also be spending more time on risk assessment, financial statement analysis, and legal reviews.

Even with the ongoing instability in the credit markets, it is possible to continue to do business successfully. Commercial lenders who stick with the basics by focusing on credit quality, loan covenant enforcement, risk-based pricing, and strong loan documentation will likely do well.

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SOURCE: Seeking Alpha

Lenders are seeing a huge spike in residential mortgage refinancing. Most feel this is mainly due to the fact that the stimulus package brought forth by the government has raised the limit on the size of mortgages that can be bought by GSEs. Another feeling is that this is a result of homeowners, whether distressed or not, taking advantage of the reduction in interest rates.

An interesting item to note is that overall, providers of financial services have reduced spending for their online advertising. There has been a drop of 17% on a month to month basis. Some believe that this is due to a large backlog of homeowners working their way through their refinancing deals.

Some feel that the reduction in advertising could be attested to the changing industry dynamics which are bringing every expense under scrutiny. No matter what the reason, lenders continually strive to provide loans for homeowners.

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SOURCE: The Wall Street Journal

With and expected 7.4% increase in market rents for the San Francisco area, an interesting turn of events has begun with the Lembi Group offering up 18 of their apartment buildings for sale.

The Lembis business model: pay top dollar, spend more to entice tenants to leave, and then to renovate, has miffed rival landlords over the years. Now the Lembis are testing the market with high listing prices, some of which they've reduced because of weak interest.

It is unclear if this may be to take advantage of a run-up in prices that the Lembis largely created, or a sign that they are overextended. The only hint that there could be some difficulty is a comment by Walter Lembi, managing director, who acknowledged that the tight commercial-mortgage market has crimped the group's ability to fund acquisitions and refinance highly leveraged properties.

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SOURCE: The Wall Street Journal

Standing out in a sagging housing market is not always easy. Some real estate agents are learning about "green" housing solutions so that they can help environmentally conscious buyers when they are considering a move.

There is a lot to know about energy efficiency, green construction labels, as well as earth-friendly products and building materials. Not only that, the myriad of grants and tax credits available for energy saving improvements can be an onerous task to research for some home buyers.

The education and training being received by these agents can really help home buyers understand what is involved in owning and operating a "green" building. They can also help purchasers in knowing what they can do to improve an existing dwelling.

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SOURCE: The New York Times

In the past, it has taken a great amount of effort to locate commercial property. Today, this task has been made much easier by way of the internet and the multitude of online sites available to potential investors. One of those sites, Steelhead Capital, is an excellent source of information for any commercial real estate investor.

Not only do these types of sites help to locate properties available, they also can provide resources for lending and rate data as well as locating a commercial broker that fits with a specific project. In fact, there is so much information available online today that deals can be completed much more quickly.

Due to the complexity of the data surrounding commercial real estate, the online resources are a great way for investors to really evaluate potential properties that are available. Between the information gathered online, and a good commercial real estate broker, these are excellent tools for investors.


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SOURCE: The New York Times



The new trend in commercial construction is rise of the latest "green" design and technology however, retro-greening older buildings may become even bigger.

The United States Green Building Council whose Leadership in Energy and Environment Design (LEED), program has become the standard for sustainable building. The LEED for Existing Buildings (LEED-EB) provides a list of steps that building owners and managers can take to operate and manage their properties more efficiently.

"With an existing building, you have to make the most of what you've got," said Doug Gatlin, the vice president for market development at the Green Building Council. "We recognized that most buildings are not going to go through a gut rehab."

One of the most successful retrofits to date was done by Cushman & Wakefield, who worked as the property manager of the headquarters of software maker Adobe Systems. They received a platinum LEED-EB rating for its three towers in December 2006. Adobe spent $1.4 million on the project, but earned that back in savings in less than 10 months. It conducts tours for neighboring high-tech companies and visitors from as far as Japan and China.

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SOURCE: GlobeSt.com

HOUSTON-At the end of 2007, occupancy among multifamily properties posted lower than 2006. Yet, as home foreclosures rise, developers are betting that more and more people will be returning to rentals.

"Absorption is at its lowest that it's been in 10 years. And we have an unprecedented number of new units under construction at 19,526 and an additional 18,254 units proposed," says Teresa Lowery, principal with Colliers International in Houston.

Lowery and Douglas Lockwood, vice president in Grubb & Ellis Co.'s Houston office, agree that the region's economic and market fundamentals are so strong that developers and investors are taking note and taking action to position themselves.

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SOURCE: The Earth Times

Ernst & Young's Global Real Estate Center will soon be releasing its Global Real Estate Market Outlook for 2008. This report offers key information about global trends in both the residential and commercial real estate markets.

Highlights mentioned in this article give insight into the more positive prospects for 2008. One of the interesting points raised within the report is that the rate of growth in REIT markets is growing stronger and will continue on a global level through 2008. This growth has been gaining strength for some time now.

Another key point mentioned is that private equity capital will continue to spread around the world in the form of global joint ventures as they invest in countries or entire regions. Private equity funds are hot on the trail for distressed property acquisitions. "The real estate appetites of private equity funds and sovereign governments combined with broader, global real estate dynamics could help guide the market out of this gray period." says Dale Anne Reiss, Global Real Estate Director for Ernst & Young.

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SOURCE: Forbes

Sam Zell is a master real estate investor who has built his wealth on the cycles that shape the real estate industry. Zell explained that "We're not really in a 'credit crunch'. I think we're in a confidence crunch".

Zell said that there is still capital available to be borrowed, unlike during other real estate downturns when there just wasn't any financing to be had. Today, it's more a "confidence crunch" said Zell. He feels that the excess liquidity that was available eight weeks ago still exists today.

Supply and demand drive the markets and the demand is still there. With the help and foresight of a commercial mortgage broker a real estate purchaser can take advantage of the volatile cycles that continue today.

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SOURCE: Reuters

Even though the "AAA" bond index for U.S. commercial real estate has weakened somewhat, most analysts agree that commercial property defaults will increase but not nearly as much as the debacle seen in subprime home loans.

The market analysts at both rating companies as well as investment banks agree that it is unlikely that commercial property defaults will reach anywhere near the levels that are being seen in the residential sector.

The "AAA" CMBX-4 index widened another 10 basis points to trade at a midpoint spread of 235 basis points in afternoon trade on Monday, compared with its record high 224 basis points close on Friday, according to market sources. These bonds which are used by investors to hedge against commercial mortgage risks are backed by office buildings, hotels and retail stores.

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SOURCE: National Real Estate Investor

Marcus & Millichap's Annual National Apartment Index reports that San Francisco will lead the nation for 2008. Strong rent growth and robust investment activity in the area are being driven by professional and business services which support the technology companies in the bay area.

The for-sale apartment properties in San Francisco are effectively depleted and investors are willing to accept lower initial returns just to get in the door. Over the years, existing landlords have been dragging their feet in bringing rents up to market rates. This means that there will be a substantial increase in revenues available in the near future. In fact, the belief is that rents will most likely increase by 7.8%.

Although some areas of the country aren't improving at the same rate, the vacancy rate is expected to hold at 5.8% across the nation. The single-family market foreclosures that are beginning to sweep the nation will grow the renter pool and increase the asking rents by 4%. The multi-family housing sector is expected to hold strong for the future.

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SOURCE: New York Times

Not that long ago, searching for available commercial real estate and information about specific properties used to be an onerous task. Today, it has become much easier with online resources geared specifically toward commercial real estate investing.

From online investment advisory services like Steelhead Capital Investment Services to other sites, which list actual properties. The commercial real estate investor has a wealth of information at their fingertips. It is important to understand the data being presented as it is much more complex than residential investing.

Even with all the data available, it is still important to involve an investment advisory service which will provide objective viewpoints on the properties that are being considered. An accomplished commercial mortgage broker is another invaluable asset when searching for financing as well.

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SOURCE: Wall Street Journal Online

With over 80% of banks tightening their lending standards on commercial real estate loans, it is more important than ever to have an expert mortgage broker.

Worries caused from the subprime mortgage debacle are
creating a ripple effect in commercial real estate lending. But, because the commercial sector was not as overheated as the residential markets, it is not expected to be as bad. That said,
the tight credit and slowing economy are squeezing the sector.

This lending squeeze can make it difficult to find financing for commercial properties but that's where a commercial mortgage broker like those with Steelhead Capital can help find a lender that fits you and your project.

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SOURCE: CNN

According to the Mortgage Bankers Associations most recent survey, the mortgage application index rose from 906.4 the previous week to 981.5, a 8.3 percent increase, in the week ending January, 18th.

Even though purchase volume fell 4.6 percent, refinance volume rose 16.9 percent. Refinance volume accounted for 66 percent of all applications.

The survey shows an overview of the lending activity among mortgage bankers, commercial banks and thrifts and also, covers about 50 percent of all residential retail mortgage originations each week.

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SOURCE: Wall Street Journal

A new Federal Reserve survey of senior bank-loan officers shows that banks are tightening lending standards on commercial and industrial loans.

"Bankers are becoming more cautious," said Keith Leggett, economist at the American Bankers Association in Washington, "but also borrowers are getting more cautious."

The survey reported that 80% of U.S. banks tightened terms on commercial real-estate loans during the period, the highest percentage since the survey question was introduced in 1990; almost half of banks also reported weaker demand for those loans.

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SOURCE: The Motley Fool

LoopNet is a leader in the less volatile commercial real estate market and provides a type of one-stop shopping which allows subscribers a wide variety of services devoted to commercial real estate. These services include the ability to "search, list, market, research, and finance commercial real estate properties over the internet."

Their website, loopnet.com claims over 2.5 million registered members with $425 billion of commercial real estate available to purchase. Access to the company's free listings is available to anyone who registers but the premium monthly subscribers provide 76% of revenue just in the last quarter.

The amount of information available, as well as the shear number of properties that are listed, makes LoopNet a real asset for industry professionals. Even though there are other online competitors in this area, none of the other websites have all these offerings available in one location. This is why LoopNet claims that all of the top U.S. commercial real estate firms use their site.

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SOURCE: Wall Street Journal

Freddie Mac is seeking a proposal that would allow it to create and sell bonds backed by multifamily mortgages to help expand its role in financing apartment buildings.

The proposal, if approved by Freddie Mac's management and regulators, would allow the government-sponsored provider of home funding to be more competitive with Wall Street.

"At some point, the market will come back," said Mike May, a senior vice president at Freddie. And Freddie's plan to develop its own ability to create such bonds could help the company compete more effectively with investment banks when the market turns. It would "keep our relevance in all market cycles," Mr. May said.

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SOURCE: National Real Estate Investor

"There are mixed signals in the market and good arguments that conditions could continue to deteriorate or alternatively improve by the end of the year," says Robert White, president of New York-based research firm Real Capital Analytics. "Ultimately, one's viewpoint depends largely on their outlook for a recession."

The office sector favored by investors in 2007, had record year for transactions with $211 billion in office properties changing hands, a 55% increase over 2006 volume, according to Real Capital Analytics.

But sales fell by 42 percent in the fourth quarter of 2007.

"Fortunately sellers are generally not under pressure to sell quickly or accept too steep a discount and this has kept prices from falling further," says White.

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