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More Income-Based Returns in 2014

Sat, 08 Jun 2013 13:05:28 +0000

Nothing really meaningful is going to happen until we fix the job situation, said Sinkuler.

Part 2 of 2

SAN FRANCISCO-In an earlier story, GlobeSt.com reported on ULI Real Estate Consensus Forecast from ULIs Real Estate Finance and Investment conference here, noting that real estate is much safer for investors than it has been for some time. It is an attractive environment, agreed panelists.

The discussion then moved on to the topic of returns, where David Lynn, EVP and chief investment strategist of Cole Real Estate Investments, predicted that, going forward, a majority of returns will come from income. According to Lynn, the 8% to 10% total return range is probably there.

Andrew Nelson, director of research and strategy at Deutsche Asset Wealth Management, added that We will see increasing NOI growth starting in 2014. We expect to see more income based returns.

Attendees watch the opening panel discussion at the ULI Real Estate Finance and Investment Conference.

Drilling down to each property type, Richard Sinkuler, partner and global real estate markets leader at Ernst Young, forecasts a big demand in warehouse. Office is having a sluggish time recovering, he said. Retail is doing well at the high end and the low end, but the folks in the middle are having a tough time.

In terms of unemployment, there is no more national average, said Sinkuler. Nothing really meaningful is going to happen until we fix the job situation.

To be considered unemployed, you have to be looking, he continued. That cuts behind all the numbers. Dont look at the flat percentage as a national average Look at the various places where the unemployment growth is taking place. That growth, he said, is where the demand is coming from. Demographics is playing more of an important role than it ever has before.

When discussing the 10-year treasury, Lynns prediction is that the Fed will scale back gradually because we have been in this period of free money for four years. But the change has occurred, he said, but it has to. They cant continue to stimulate the economy forever, and it will have an effect on cap rates, but that will be gradual as well.

According to Sinkuler, The Fed isnt going to do anything drastic. We are going to have stimulus for some time to come, but the question is whether you are going to get the central banks and everyone on the same playing field because everyone is at a different stage in the game and that remains to be seen.

Check back with GlobeSt.com for more from the ULI Investment conference.

Article source: http://www.globest.com/news/12_620/sanfrancisco/finance/Panelists-More-Income-Based-Returns-in-2014-334130.html

Real Estate, No Longer a Dirty Word

Fri, 07 Jun 2013 00:50:18 +0000

The opening panel at the ULI Real Estate Finance and Investment conference at Dean Schwanke, SVP of Urban Land Institute.

Part 1 of 2

SAN FRANCISCO-Real estate is no longer a dirty word; it is a well-performing asset class. So said David Lynn, EVP and chief investment strategist of Cole Real Estate Investments, during a discussion about the CMBS market here yesterday at the ULI Real Estate Finance and Investment conference. Real estate is much safer than it has been for some time and for the borrower and lender, it is an attractive environment.

The CMBS market, Lynn said, was scarce two years ago, but is now much more broadly available. There is a real need for it and investors want the yield … CMBS makes sense.

It makes sense, Lynn continued, particularly in the secondary and tertiary markets where there has been a financing gap, but it doesnt necessarily make sense in the primary.

The conference brought together both providers and users of capital to explore key trends that are driving successful real estate investing today. Lynn was a panelist on the opening panel, moderated by Dean Schwanke, SVP of Urban Land Institute.

The panel began with a reviewed ULIs recent consensus forecast, a three-year forecast for 27 economic and real estate indicators. The survey was undertaken from March 4 to march 25, 2013.

Industry experts gather at UCSFs Mission Bay Conference Center for a networking break.

Among other things, the consensus predicted that: Real GDP Growth will continue getting better; showed inflation will increase up to 3% by 2015; cap rates are expected to fall this year and then rise up to 6.2% next year; transaction volume is expected to rise; strength continues on the industrial and warehouse side, with rental rates expected to grow; rental rates for office is expected to grow for the next three years; hotel occupancy rates will continue to rise over the next few years; and home price increase are expected to be stronger, well above inflation.

Richard Sinkuler, partner and global real estate markets leader of Ernst Young,commented on the consensus GDP growth prediction, noting that there are still a lot of headwinds if you look at things globally. There is still some uncertainty and that uncertainty is our enemy because it is still making people who make decisions say, oh well, we will wait and see. And it is four years now of a slowdown.

But Andrew Nelson, director of research and strategy at Deutsche Asset Wealth Management, thought there is a better picture to paint. Sure, the public sector is very much standing in the way right now, he said, but the private sector is recovering nicely. It is a normal kind of reaction to such a severe downturn. It is kind of a bamboo thing where it takes several years underground before it is going to shoot up. We are seeing some positive things like exports increasing and job growth, for example.

Lynn added that there are more positives than negatives. The private sector is in relatively good health. Exports are increasing for the US. We are becoming a major energy power and that isnt insignificantit is helping our economy is a variety of ways, he said. Consumers have been deleveraging over the past several years and are in better shape. They are beginning to re-lever again.

But the big worry is still the jobs picture, which Lynn said has been anemic. It is a new normal, said Lynn, but it is a pretty good environment for real estate. You are seeing fundamentals improve in all sectors. The debt part of this has been very attractive. The economy is gradually improving and the cost of capital is very attractive.

Check back with GlobeSt.com for part two of this panel discussion, where the panel touches on the 10-year treasury, and on a majority of returns stemming from income.

Article source: http://www.globest.com/news/12_619/sanfrancisco/finance/Real-Estate-No-Longer-a-Dirty-Word-334129.html

Kidder Mathews Gains 7 G&E Brokers

Fri, 01 Jun 2012 23:47:42 +0000

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Bill Kurfess, an office/RD specialist,
is the firm?s SVP in the Redwood
Shores office.

SAN JOSE, CA-Kidder Mathews continues to grow its Bay Area commercial real estate group, adding five brokers to its downtown office and one each to its San Francisco and Redwood Shores offices. The new hires bring the firm’s roster in this region to 73 agents, with all seven brokers hailing from Grubb Ellis.

The local office welcomes veteran brokers Joe Scuncio, an office/RD specialist; Nigel Keep, investment properties; Kristopher Blais, a retail specialist; and James Viso and Shaun Enferadi, both industrial brokers. Mike McCormac, an office specialist, joins the firm’s San Francisco office as VP, and Bill Kurfess, an office/RD specialist, joins the firm’s Redwood Shores office as SVP.

“The agents we’ve hired bring a varied mix of specialties to enrich and expand our service lines in each of our offices,” said Reed Payne, EVP of brokerage services for Kidder Mathews, in a prepared statement. “We are thrilled to have this caliber of brokers join our group.”

Payne tells GlobeSt.com that, while more new hires aren’t imminent, he is always seeking new agents to join the firm. In Northern California, the company is looking to grow its property-management and appraisal divisions, having in the last 60 days hired Nanci Vega as senior property manager, and Brad Paul as head of appraisal.

“The overall vision for the company is to be recognized as the premier provider of commercial real estate services in the Western U.S.,” Payne continues. “With that as the vision, the goal is to have the highest-quality agents we can get, and these hires definitely fit that goal. We’ve hired people in almost every specialty we deal with, and they are all very capable, very strong agents.”

As GlobeSt.com recently reported, earlier this month Kidder Mathews broke ground on Motion Water Sports’ 135,000-square-foot Pacific Northwest corporate headquarters in Snoqualmie, WA. Also, in April, Kidder Mathews and Binswanger were retained by Kimberly-Clark Corp. to sell its exceptionally rare waterfront industrial property in Seattle. Located on the central waterfront at 2600 Federal Ave., the property boasts more than 2,500 linear feet of deep-water industrial shoreline area and a total land area in excess of 66 acres. It is immediately adjacent to Naval Station Everett, home of the USS Nimitz carrier battle group, and the Port of Everett main terminal.

Categories:

West,
Industrial,
Office,
Retail,
Executive Moves,
San Jose

Carrie Rossenfeld Carrie Rossenfeld is a reporter for the West Coast region of GlobeSt.com and Real Estate Forum. She was a trade-magazine and newsletter editor in New York City for 11 years before moving to Southern California in 1997 to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics ranging from intellectual-property licensing and giftware to commercial real estate. She recently edited a book about profiting from distressed real estate in a down market and has ghostwritten a book about starting a home-based business.

Article source: http://www.globest.com/news/12_363/sanjose/office/-322045.html