News
Talking Turkey
November 24, 2010
| Forget buying real estate for a day, we're clucking happily that the cost of Thanksgiving dinner is only up 1.3% from last year to $43.47 to feed 10, according to Grubb & Ellis chief economist SVP Robert Bach. So, go ahead and grab a second stuffing-filled plate before you plop down to watch the Cowboys take on the Saints. | |
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| Our NYC reporter snapped Bob (and took some Photoshop liberties). He tells us the rising commodity prices due to demand from China and other emerging markets have yet to impact the cost of Thanksgiving dinner. The American Farm Bureau reports that the average cost of the ingredients for a turkey dinner this holiday season is about the same as the 1.4% gain in food prices for the 12 months ending in October and barely ahead of the 1.2% gain in the CPI for All Urban Consumers, according to the U.S. Bureau of Labor Statistics. Farmers are doing better than office and industrial landlords (probably because corn and soybeans aren't asking for concessions), who have been unable to push through any rent increases this year. | |
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| The average asking rental rate for a square foot of office space in the US fell from $26.60 full-service gross in the Q3 '09 to $26.10 in the Q3 '10, a decline of 1.8%, while a square foot of industrial space fell from $5.38 to $5.35 NNN. Nevertheless, sales prices of the associated real estate have risen sharply during this period. Irrigated cropland in the territory served by the Federal Reserve Bank of Kansas City rose in value by 9.6% while the average per-square-foot sales price of office and industrial properties increased by 13.2% and 8.2%, respectively, according to Real Capital Analytics. Some analysts have expressed concern that prices for income-producing real estate, whether prime agricultural land or core office buildings, are getting ahead of market fundamentals due to a combination of very low mortgage rates and investor concerns over inflation down the road. | |
