Saturday, April 27, 2013

RCA U.S. Capital Trends / Park Avenue Sculpture Tours / You Never Know!


RCA (Real Capital Analytics) U.S. Capital Trends
RCA’s U.S. Capital Trends First Quarter 2013 reports were just published.  Here are some of my takeaways: 

Hotels
  • Sales of significant hotel properties are up 84% from a year ago
  • The hotel sector is increasingly becoming dependent on CMBS (Commercial Mortgage Backed Securities) as its primary source of debt capital
  • Sales volumes rose significantly in secondary and tertiary markets
Apartment
  • Sales of significant apartment properties totaled $31.7Bn, a new record high although this included the sale of Archstone properties in two portfolios sold to Equity Residential and Avalon Bay
  • Senior housing is also off to a strong start in 2013 with transaction volumes doubled from a year ago
Retail
  • Sales of significant retail properties were down 30% versus last year
  • Positive trend in strip center transactions
Industrial
  • Sales of significant industrial properties were up 16% compared to the same period in 2012
  • Sales volumes in tertiary markets rose significantly
Office
  • Sales of significant office buildings up only 2% from a year earlier
  • Acquisitions in secondary markets posted positive trends with volume in tertiary markets up the most 
RCA’s data mirrors what several industry friends mentioned to me just this week.  They and their partners are seeing prices starting to over-heat, even on ‘so-so’ properties in secondary and tertiary markets.  They have been out-bid by as much as 33% and don’t understand how the winning bidders can underwrite to those prices.  While sellers are benefiting, this is another indication of the next real estate bubble starting to inflate.  

Park Avenue Sculpture Tours
Last week I wrote about Alexandre Arrchea’s “No Limits” exhibition along Park Avenue.  Two OTR readers took me up on my offer to view the abstract real estate artwork together. It was such a nice experience to stroll the streets and hear different perspectives.  The weather was beautiful and sharing with others is what made this special for me. 

The real estate person in each of us chose to notice how the artist dealt with the scale of each building and the sense of animation attached to inanimate objects. There is no right or wrong way in which to experience the arts:  it’s all our individual appreciation. The exhibit is located on Park Avenue between 54 and 67 Streets and runs through Sunday, June 10.  My offer to join you on the tour is still open! 

Outdoor Public Art in New York
On a similar note, a friend forwarded me this link which is a terrific roadmap to ‘discovering NYC’s range of al fresco art…from expansive graffiti murals and obscure 19 century statues to iconic public artworks and secret New York treasures.’  Looks like a great spring / summer adventure is unfolding!

You never know….
(Note:  An apology to those of you who think baseball is boring!)
On Thursday a long-time real estate friend took me to Yankee Stadium to watch the Yanks play the Toronto Blue Jays.  There had been some excitement early on but nothing like what happened in the seventh inning. Yankee Ben Francisco was called out on a close play at first base.  There was no dispute of the call yet a few minutes later the umpires gathered for a conference.  The outcome of the pow-wow was a reversal of the call!  No one seated around us had ever seen such a thing. The crowd cheered wildly.  The Toronto manager argued with the umpires to such a degree that he got tossed out of the game.  You can read all about it here.  

Why do I mention this??  Simply to suggest that we never know when something totally unexpected and unusual will happen.  Perhaps the unexpected should be something we actually expect from time to time…  Hopefully the unexpected occurrence will be a good one but that’s not always the case.  When something bad happens we need to choose how to manage the situation.  It’s all about our attitude.  We can argue, like the Toronto manager and get ‘tossed out of the game,’ or just accept what has happened and deal with it in a positive way.  I think that embracing the unexpected and making the best out of the situation is often the healthiest response for us.  Don’t you think?

Congratulations…
  • Jaap van der Bijl, Director Investor Relations, Syntrus Achmea Real Estate and Finance. 
  • John Bottomley, Executive Vice President - Capital Markets, Berkshire Group.
  • Drew Butler forming Butler Global Partners.

On The Road…

May 16:  Annual meeting of The Hoyt Fellows, North Palm Beach, FL

May 29 – 30:  IMN (Information Management Network) U.S. Real Estate Opportunity Fund and Private Fund Investing Forum, New York, NY 

June 4 – 5:  PERE Summit (Private Equity Real Estate Magazine), London, UK 




Disclaimer  
All content in this blog is created for informational purposes only. Content, which includes all text, photos, video and graphics is not intended to malign any religion, ethnic group, club, organization, company or individual.  Steve Felix makes no representations as to the accuracy or completeness of any information on this site or other information as a result of following any featured link to or from this site.  The intention of this blog is to do no harm in regards to injury, defamation or libel. What is written or shown is not to be taken as fact or absolute.  Steve Felix will hold himself harmless for any errors or omissions in this blog’s information; including but not limited to external link information, translation or interpretation of content or incorrect grammar or punctuation. 



Sunday, April 21, 2013

Hot Air or Helium? / "No Limits" Real Estate Sculptures / Over-thinking / Five Fruit Feedback


Hot Air or Helium?

From far and wide capital is flowing into U.S. commercial real estate. My long-time friend, Ed LaGrassa, of Chilton Realty in New York said, “I’m concerned that a bubble is once again forming. Prices for individual properties are really heating up.”  

Whether it’s hot air or a helium bubble really makes no difference.  Prices for prime properties in gateway cities are pushing cap rates down.  Availability of cheap debt is also contributing to the current state of affairs.  Many people I speak with are looking deeper into secondary and even tertiary markets for ‘sensible’ deals and those areas are benefiting from the appearance of previously absent brand names in real estate. As a result, these markets may experience a bonus of new job creation and the reestablishment of their economic foundation. ‘Wouldn’t that be loverly?’ (From Wouldn't It Be Loverly by Alan Jay Lerner and Frederick Loewe, written for the 1956 Broadway play My Fair Lady).

“No Limits” Real Estate Sculptures

While walking down Park Avenue this week I was stopped dead in my tracks by a unique structure; I paused for a moment to figure out exactly what I was looking at.  There was a building incorporated into a piece of art.  Once home I did an Internet search and must share the results with my real estate community.

The “No Limits” exhibit is found on Manhattan’s Park Avenue, between 53 and 67 streets and is totally mesmerizing. Ten sculptures are based on well-known NYC buildings.  I shot the photo below on Wednesday, April 17 and plan to walk the entire ‘show’ very soon.  

The artist is Alexandre Arrchea.  Mr. Arrechea says he's tried to position his representations as close as possible to the actual building.  Taken from his website, “The Seagram Building sculpture, like the Chrysler one, appears to unravel from a giant coil, a fire hose with sinuous lines, and looks like it's almost dancing in front of the building itself.”

If you are in the New York area, and especially if you are in the real estate industry, this is a ‘must see.’   The exhibit runs through Sunday, June 10.  Hey, if you’re going to do the tour - let me know…I’d love to walk it with you!



Over-Thinking

Dr. Susan Nolen-Hoeksema, a psychologist and writer, died at 53 on January 2, 2013.  She conducted work that helped explain why women are twice as prone to depression as men.  This resonated with me. 

Her studies, first in children and later in adults, exposed a pattern of rumination - the natural instinct to dwell on the sources of problems rather than their possible solutions. “The way I think she’d put it is that, when bad things happen, women brood — they’re cerebral, which can feed into the depression,” said Martin Seligman, a professor of psychology at the University of Pennsylvania, who oversaw her doctoral work. “Men are more inclined to act, to do something, plan, beat someone up, play basketball.”

“We are suffering from an epidemic of over-thinking,” Dr. Nolen-Hoeksema wrote in 2003. 

As a man, I can relate to the concept of 'over-thinking.'  I’ve seen this in myself at times. Sometimes it drives me crazy.  I’ve found it helpful to go out and play – tennis, music, take a walk. These things feel good and help get my mind off thinking for a while.  I can then refocus brain activity with a healthier outlook later. I’m wondering if anyone else uses a different technique of distracting your mind from over-thinking…

Five fruit feedback

Many thanks to those who sent me helpful suggestions for increasing my daily fruit intake. The most popular suggestion was, by far, the fruit smoothie.  Now that I own a serious blender, I will be experimenting with this drink (or is it a food?). This is just one facet of me taking better care of myself.  I believe you will agree that knowing what to do - and actually doing it - are two completely different things.   But, I’m working at it.  As I like to say, we are all works in progress.

On The Road…

April 27:  Noon to midnight jam session with Sound Counsel comprised of fellow Counselors of Real Estate (CRE) members, New York, NY

May 16:  Annual meeting of The Hoyt Fellows, North Palm Beach, FL

May 29 – 30:  IMN (Information Management Network) U.S. Real Estate Opportunity Fund and Private Fund Investing Forum, New York, NY 

June 4 – 5:  PERE Summit (Private Equity Real Estate Magazine), London, UK 




Disclaimer  
All content in this blog is created for informational purposes only. Content, which includes all text, photos, video and graphics is not intended to malign any religion, ethnic group, club, organization, company or individual.  Steve Felix makes no representations as to the accuracy or completeness of any information on this site or other information as a result of following any featured link to or from this site.  The intention of this blog is to do no harm in regards to injury, defamation or libel. What is written or shown is not to be taken as fact or absolute.  Steve Felix will hold himself harmless for any errors or omissions in this blog’s information; including but not limited to external link information, translation or interpretation of content or incorrect grammar or punctuation. 














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