So, welcome to the future, aka the third quarter of 2011. First of all, can you believe the passage of time? But I'll leave that for another day. Because we're in an industry that measures a lot of performance and activity by quarter, I thought I'd talk about that for a minute. Real Capital Analytics (RCA) had this to say at the end of May in their U.S. Big Picture Report:
May marked an important benchmark as sales achieved their highest monthly total so far in 2011, rising to $15.6b and notching a remarkable 124% gain over the year-earlier month. The growth trend was broad, as every property type registered its most active month this year and both pending deals and new offerings point to a strong June. Still, wide variances in momentum persist both among and within property sectors. CBD office, garden apartments, and full-service hotels continue to drive growth at present, although regional malls are quickly gaining currency, as evident not only in recent transactions but also in a spate of new offerings, including Westfield’s 17-property US portfolio. Suburban office sales remain lackluster, but surprising strength is emerging in secondary and tertiary markets for retail and apartment properties as yield-seeking investors scour markets for more.
This is a very encouraging report but then there's the debt side to any deal as only a few cultures has enough to pay cash for buildings these days. Talking to some commercial lenders recently they told me that, yes, they are lending, still selectively but with a bit more aggressiveness (can you say compromises in underwriting, maybe?). And, talking about the infamous "Lessons Learned" from the 'last down so low it looks like up to me cycle' I'm still concerned about the flood of institutional money chasing core deals and driving prices up and cap rates down, way down. Hey, we're now in that time where we're creating the next cycle and, just like trying to call the bottom of the market, we won't know what this cycle will look like until the next one.
Congratulations to, Jeff Gandel and his colleagues who have successfully lifted out their team from Fidelity and have formed Long Wharf Real Estate Partners in Boston.
The other interesting things occurring are the continued moves of some senior people to different firms...seems like a lot of this is in Asia but in Europe as well. The "Asian" market seems to be more and more the topic of discussion of global players but there are also excellent opportunities closer to home, wherever your home might be.
Knish-Nosh has been in Forest Hills, NY since 1952. My friends and I have been eating their knishes for a long time. Serendipitously I was walking through Central Park in New York last Monday. At the sailboat pond there’s a little concession stand that I’ve walked by hundreds of times, always thinking that one day I’ll stop there, sit and relax and have a coffee like I’ve seen many people do (often with their dogs which I admire for being able to behave off-leash). Anyway, it was a holiday and I wasn’t going anywhere so I stopped for coffee and a bagel and I see something on a high shelf that says Knish-Nosh. As I return my tray I see a guy there and ask him if this place is run by Knish-Nosh. He says yes and I tell him about growing up in Forest Hills, blah, blah, blah. He says that that type of thing happens twice a day. He also tells me that they’re moving locations in Forest Hills and will be next to the Midway Theatre (also an old haunt of ours). In addition, he tells me that they ship knishes (mostly to people who can put the sizable shipping cost on their corporate expense statement). But, the most important part of this story is that they’re going to start distributing Knish-Nosh Knishes through places like Costco on a nationwide basis (well, maybe not nationwide as I’m not sure that knishes would ‘play’ in some markets). Anyway, watch out for them in your neighborhood Costco soon.
Congratulations to, Tim Shine, who has recently joined Parmenter Realty Partners.
YouTube of the week: I didn’t know that Daryl Hall wrote, “Every time you go away”. I always liked that song but here it is played the way I think he envisioned it when he wrote it.
Congratulations to the folks at Pearlmark Real Estate Partners (formerly Transwestern Investment Company) on their snazzy new name.
Restaurant of the week. Tatra restaurant, 24 Goldhawk Road, London. Disclaimer: I have not yet visited this restaurant. I met the husband and wife team that own and operate the restaurant at my friends’ wedding last week. I just have a good feel that this is excellent Mediterranean food.
Photo: Recently discovered: my mother swimming with her father at a resort in New Jersey (August 17, 1936)
Congratulations to Chris Gerra, who has just made an internal move and joined Thomson Reuters Tax and Accounting division.
On the road....(taking it a little easy over the summer):
July 10-12: Beverly Hills for the NMS Real Estate/Real Assets Roundtable
July 18-22: New York
August 8-12: New York
Sept. 20-21: Amsterdam to moderate a panel at the PERE Global Forum
Nov. 2-5: Washington, DC to attend the CRE Annual Convention and perform with the CREatures of Havoc Band
Nov. 9-10: New York to moderate a panel at the PERE Forum-New York
These are my views and not that of my employer.