News
NEWiRE on Capital Markets
September 27, 2010
| It may take a few more years for the economy to return to pre-recession employment levels, but capital markets are strengthening and rising deal volume is on the horizon. That's some of the analysis from Wednesday?s NEWiRE lunch at the Four Seasons, where the room was plush and even the chicken had a certain flare. |
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| We snapped incoming NEWiRE president Joan Parsons, of Reimer/Braunstein, who shared this year?s secret number with everyone in the packed room. Two. Joan promises great results if members ID two personal or professional goals they?d like to accomplish through the group and attend two NEWiRE events every month. No matter how small the goal or brief the event, Joan promises that consistency will reap rewards. Joan?s other suggestion: do one thing every day that scares you. It's all about growth. |
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| Meredith & Grew's Lisa Campoli says a double-dip recession is unlikely, but it may be 2013 before employment rebounds from the nearly eight million jobs lost during the recession. Some worry there may not be enough capital to cover the CRE debt coming due. Lisa says, ?We're not convinced it's a problem.? Meanwhile, there's pent-up demand to buy new assets among publicly traded REITs, pension fund managers, and private institutions, but still a lack of supply. In Boston, there have been enough post-recession deals closed to establish new pricing levels. For 2010, she expects CRE sales volume of $3.7B, far from ?07?s $15.1B— but better than ?08?s $3.4B. A ?huge? stabilizing factor: Rents are no longer falling and debt markets are improving. |
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| We snapped AEW?s Pam Herbst (left), who says there's a strong appetite for core property compared to ?08, when there were ?lines to get out.? Demand is so intense, she says, ?This was the busiest summer of my career.? One major change, lenders are starting to move assets off the books. Investors looking at Boston worry about lease-up times and job growth, but the counterweight is the region?s high barriers to entry. Wells Fargo?s Susan Winston Leff says lenders will look at buildings filled with credit-worthy tenants. Forget about impressing them with replacement cost and don't expect to buy quality assets at deep discounts. Susan says market-rate multifamily cap rates are at all time lows. |
