News
WHERE GO THOU CAP MARKETS?
September 19, 2011
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| In case you missed it, we had a stellar second panel at last Tuesday's Atlanta Capital Markets event at the Westin Atlanta Buckhead. Among our panelists was North American Properties' Tim Perry (on right with Metlife's Tom Coakley), who told the audience of more than 300 that the company acquired Alpharetta's Prospect Park in a JV with Seraphim Capital. (The company... not money from angels.) And that the developer will be moving forward on a 2,500-unit apartment community at the site in the next 12 to 19 months. | |
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| Cousins Properties' Craig Jones says underwriting deals is difficul because it's hard to project where rents will be. ?Clearly, right now the uncertainty [of fundamentals] is the biggest impact on underwriting,? he says. ?I think that's where we're all scratching our heads.? | |
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| Metlife's Tom Coakley says it's been taking the faltering economy into account when underwriting real estate: ?Our assumptions with fewer jobs and lower rental rates and less absorption, eventually it's going to affect cap rates and they're going to start creeping up.? He also cautions to watch the European CRE market—cap rates there are starting to rise, and that part of the world is usually a good indication of what is coming domestically. | |
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| We chatted with HFF's Mark Sixour and Metlife's Russ Paper prior to the event. Mark echoed much of what others both on and off the panel have been saying: Pricing for core assets is still strong while other assets have to fight for potential buyer interest. ?There's a divergence between the brochure quality stuff,? he says, adding that he's still seeing a bid-ask gap with owners of non-trophy, second-tier market assets. |
