Green Street: Commercial Property Values Up 30% Over 2009

It wasn’t more than two years ago that commercial real estate began a brutal downhill slide with no apparent end in sight, as investors and developers braced for an avalanche of mortgage defaults and foreclosures.

But, in another sign the dog days maybe coming to an end, property values have risen nearly 30% since the industry lows in 2009, according to an index by Green Street Advisors, a firm based in Newport Beach, Calif., specializing in research of real estate investment trusts.

According to the Green Street Advisors Commercial Property Price Index, almost half of the decline that occurred from the brutal industry downturn between 2007 and 2009 has evaporated, but values remain roughly 20% shy of their peak. Meanwhile, the index, comprised of $300 billion worth of commercial properties and assets owned by 53 REITs, rose 3% in September.

Expectations that commercial property values are on the mend and will see a robust recovery next year have fueled sharp gains in real estate stocks that have consistently beat the broader stock indexes like the Dow Jones Industrial Average and S&P 500 since last year.

“The rebound in pricing that began in earnest about a year ago has been impressive in terms of both its vigor and durability. Sellers are feeling less pressure to act, the outlook for fundamentals has improved, well-capitalized buyers are plentiful, and financing markets are recovering,” said Mike Kirby, Green Street’s Director of Research.

International buyers see deals in Florida real estate

Well, at least Florida's struggling real estate market has been good for some.

Apparently, plummeting values combined with a weak U.S. dollar is making Sunshine State real estate a little more desirable for international buyers, according to a survey from the Florida Realtors.

Two out of every three Realtors in the state had at least one international transaction within the past year, and that's helped offset declines in home sales.

The National Association of Realtors and the Florida Realtors recently conducted a survey of Florida agents. A total of 936 responses were received about their experiences with International buyers.

Here are some of the highlights:

•Sixty-five percent said they worked with an international client in the past 12 months. One in five worked with two international clients, and 18 percent working with three or more.

•Half of the respondents said international clients accounted for 25 percent or less of their business; 15 percent said international homebuyers accounted for more than half of their business.

•One in three said that international clients were an increasing share of their customers in the past two years, while just under half noted that their share of international clients stayed about the same.

•Canada had the largest share of buyers, accounting for 36 percent of recent sales. Buyers from the United Kingdom accounted for 15 percent, and the rest of Western Europe accounted for an additional 14 percent.

Latin America, defined for the report as Mexico, the Caribbean, Central America and South America, accounted for 16 percent. Specific countries with a small but significant share of sales included Germany (5 percent), Venezuela (3 percent), Brazil (3 percent) and France (3 percent).

Dean Graziosi Creates New Breed of Real Estate Entrepreneurs

The collapse of the real estate market is creating a new way of thinking for real estate entrepreneurs across the United States. The money is no longer going to "real estate investors." It's going to a new breed of entrepreneurs called- "real estate marketers."

Many entrepreneurs are learning this new investment strategy from books written by real estate investor, Dean Graziosi, or from "Dean's Real Estate Success Academy." The new class of entrepreneurs are practicing a simple approach in an industry that was once extremely complex.

The latest property statistics show that roughly 30 percent of all real estate sales involve cash deals. Many of these new real estate investors are professionals, like dentists, lawyers and working mothers who no longer want to invest in the stock market. "Real Estate Marketers" are helping these cash buyers find the best properties at the best prices in cities across America, and profiting along the way.

Carol Stinson enrolled in "Dean's Real Estate Success Academy" two years ago after her husband's business began failing. At the time, her family was close to losing their home to foreclosure. Since then, Carol has rehabbed two properties and closed on 22 deals. She's expected to close on four properties in October 2010, earning more than $100,000 in only two years.

Teachers Retirement System of Texas Joins USAA Real Estate Co. in the US Government Building Fund, LLC

USAA Real Estate Company is pleased to announce the closing of Teachers Retirement System of Texas ("TRST") into the US Government Building Fund, LLC. This commitment together with USAA and other investments by large foreign and domestic pension plans and insurance companies now brings the total equity commitments for the Fund to $546 million.

US Government Building Fund, LLC has begun to assemble a geographically diverse portfolio of properties and provides attractive, risk-adjusted returns generated by the acquisition and operation of buildings leased to federal and state governments. The Fund continues to target Class A core assets across the U.S. with the total size of the Fund expected to exceed $1 Billion.

"We are very pleased to have TRST as a co-investment partner. Together with TRST and our other partners, we have pooled our resources to generate a very large and significant portfolio which we feel provides excellent risk adjusted returns," states Pat Duncan, Chairman and CEO of real estate operations and investments for USAA Real Estate Company. "This commitment by TRST marks the second investment with USAA in the past few years and we look forward to more opportunities in the future."

Washington Real Estate Investment Trust Tops $31.72: Enters New Trading Range (WRE)

Washington Real Estate Investment Trust traded in a range yesterday that spanned from a low of $31.66 to a high of $32.19. Yesterday's high of the day pierced the 3-day high of $31.72 on volume of 381,000 shares.
Shares of Washington Real Estate Investment Trust have been range bound for the past 3-days between a high of $31.72 and a low of $30.39 and have traded with a 30-day average daily volume of 496,000 shares.
Look for shares of WRE to trade within a new higher trading range with support at $31.72 and move along with its peers in the REIT- Diversified SmarTrend industry.
SmarTrend is bullish on shares of Washington Real Estate Investment Trust and our subscribers were alerted to Buy on July 26, 2010 at $30.16. The stock has risen 6% since the alert was issued.

Tiger Woods Buys Real Estate in Jupiter Island, Florida with help from $54 Million Mortgage

Pro Golfer Tiger Woods, has been rumored to be looking at real estate in New York City and parts of Florida since his divorce settlement with Swedish Supermodel Elin Nordegren was resolved on August 22nd.

It looks as though the new bachelor has found the ultimate bachelor’s pad in Jupiter Island, which is a town in Southeast Florida. The new piece of real estate that Tiger has purchased, will partially be paid for with a $54 million mortgage that he filed for on August 27th. Tiger plans on paying off the mortgage by 2016 according to reports.

Jupiter Island, Florida is a very small town with a population under 800. It is on a barrier island, and is known as a place where a lot of wealthy people reside. The per capita income is the 2nd highest out of any other place in the United States.

Also living in Jupiter Island are fellow golfers Nick Price and Gary Player. They are joined by other notable names such as Celine Dion, Nelson Doubleday, Alan Jackson, and Burt Reynolds. Whether Tiger will make this his main home, or just a seasonal place to stay is not known.

Dubai Real Estate dense Sued by Lehman Over exchanges agreement

Dubai Investment Commercial Operations Group LLC, a real estate and hospitality group owned by the emirate’s ruler, was sued by Lehman Brothers International Europe in excess of the worth of exchange transactions.

LBIE, which is in management in the U.K., filed the lawsuit in London, according to courtyard papers. The case is “a straightforward financial dispute concerning the valuation of convinced swap transactions enter into between theparties,”LBIE’sadministrators, Pricewaterhouse Coopers LLP, said yesterday in an e-mailed declaration.

The worth of the transaction is $24 million, Dubai Holding Commercial said in a statement today. The company said it “disputes LBIE’s maintain” over the “close out worth of convinced swap transactions that have been finished” and “intends to energetically guard the case.”

Dubai Holding Commercial reported a full year loss of 22.8 billion dirhams on June 1, compared with a year previous profit of 10 billion dirhams after property prices there fell. The company last month got a two month conservatory on its $555 million recognition line that was about to mature. Its parent, Dubai Holding LLC, and its units owe banks $12 billion and began talks to roll over some of the loans, a person with acquaintance of the matter who decline to be recognized said in May.

LBIE’s parent, New York based Lehman Brothers Holdings Inc., had more than 900,000 plagiaristic conventions dazzling when it filed insolvency in 2008 listing $613 billion in debt.

Reuters speaks profitable Real Estate at rest soreness Banks

In an account from Reuters, profitable real estate may yet lastly hurt banks lending, chiefly small, collection of populace banks where lending has been mostly physically powerful this year.

Even though the mega banks, such as Citigroup and Bank of America aren't lending, small domestic banks have enjoyed expansion in their finance portfolios. They now make up about 40 percent of U.S. saleable and industrial loans, more than at any point in the past twenty five years.

Since many suppose that more marketable real estate losses are to come, solutions to the problem are currently being batted around in Washington to help relieve this issue. One solution would see the creation of a European style covered bond market to loosen up real estate lending. The other answer is to warranty the loans, guaranteeing $25 billion in new loans.

Not all of the news neighboring the CRE market is bad. Apartment vacancies are dropping, and rents are stabilizing and in many cases on the rise. Sales of large marketable properties rose to $9.7 billion in June, the highest level seen in nearly two years, according to Real Capital Analytics.

Florida Real Estate Developer Sues Halliburton well-versed by Gulf Spill

Due to the BP oil spill. ,the major landholder in the Florida Panhandle is anguish enormous losses.

St. Joe Company, a real estate developer in Florida that possess 577,000 acres of land in front of the Gulf Coast, filed a ensemble against Halliburton Co. on Aug. 4, asking for more than $1 billion in injures. St. Joe filed the grievance against the oil services company, it said, because Halliburton, which helped to construct the oil well, "ignored multiple warning signs" that the rig was unsafe and could have help to avoid the disaster.

St. Joe said in the protest that Halliburton's work encase the well in cement was not properly managed, "allow oil and gas to escape the well, which caused the catastrophic blowout."

St. Joe claims the fallout from the spill has consequences in lost business at its resorts. The company has suffered an enormous diminish in its stock price which fell by 40 percent shortly after the explosion and a $1 billion drop in market capitalization.

In China, a real estate effervesce built on contradictory strategy

The Anhui Salt Industry Corporation is a position owned business admittance to government salt mines and a Communist Party boss. Now it has swagger into a new-fangled line of trade as real estate.

The business is increasing a multifaceted of lavishness lofty rises here called Platinum Bay on a parcel it acquired last year by outbidding two other developers to win a restricted government land auction. Anhui Salt is barely unaccompanied among big state owned companies. The China Railway Group is developing inhabited complexes in Beijing after endearing the auction for a gigantic quantity of land there.

China’s biggest land deals yet, the state sprint shipbuilder Sino Ocean paid $1.3 billion last December and March to acquire two giant tracts from Beijing’s municipal government to extend suburban communities.

Land documentations demonstrate that 82 percent of land auctions in Beijing this year have been won by big state owned companies outbidding private developers up from 59 percent in 2008.

National real estate cluster estimates 11% glide in inventory for Alberta

The national association of realtors alleged today that weaker than predictable sales movement throughout the critical spring home business season in Canada's four most energetic regional markets encouraged the revision.

"The decline is dependable with the fatigue of pent up demand from postponed purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in advance regulations," said CREA.

In Alberta, CREA is predict total MLS sale of 51,300 this year, down 10.8 per cent from the earlier year and a further 3.2 per cent annual reject in 2011 to 49,650 sales. It is forecasting the normal MLS sale price this year will amplify by 2.5 per cent from 2009 to $349,600 but fall by 0.3 per cent in 2011 to $348,500.

In its earlier forecast unconfined in early June, CREA forecast MLS sales of 55,900 this year with usual price of $348,400 and sales of 55,400 in 2011 with an average price of $350,800 in the territory.

At the national level, sales commotion is forecast to accomplish 459,600 units in 2010, representing an annual decline of 1.2 per cent. CREA is also predicting a 7.3 per cent decline in 2011 to 426,100 units. As for average sale prices, the association sees a 3.5 per cent gain this year to $331,600 followed by a 0.9 per cent refuse next year to $328,600.

In its June forecast, the involvement was predicting sales of 490,600 this year and 448,700 next year with standard sale prices of $325,400 in 2010 and $318,300 in 2011.

Real Estate in rising Economies Outperforms Eurozone and UK; U.S. viewpoint develops

The Survey suggests that real estate presentation in the United States has shown a marked development while in Latin America the profitable property market continues its bull run.

Respondents in Peru and Brazil were most upbeat, topping all in the Americas for both leasing and capital cost expectations. Survey respondents in Canada currently view the market as stable.

"The real estate world continues to be crack, broadly speaking, between the emerging and urbanized economies," said RICS chief economist Simon Rubinsohn. "Strapping augmentation in many of the former, counting the likes of Brazil, Hong Kong and India, is continuing to boost demand for new space from occupiers as well as encouraging investment activity.

Occupier command is rising in the preponderance of countries transversely the globe with the notable exemption of the UK and Eurozone countries where the tough events that have been taken to reduce fiscal deficits appear to be having a more marked impact on the appetite of businesses to take up new space.

By way of dissimilarity, demand in the UK bowed negative for the first time in a year with the net balance diminishing from a positive 14 percent to a negative 4 percent while the net balances in Spain, Germany and Greece are all in negative territory.

Looking onward into the third quarter of 2010, sentiment toward capital principles is particularly strong in France, Peru and Brazil while property professionals are most optimistic on rental increases in Brazil, Hong Kong and Peru.

Philippines matured for real estate venture expectations – professionals

A bill surrendering tax perks to REIT firms, which will puddle in-come generating property possessions and hoist money by listing on the stock exchange, lapsed into law last December but has up till now to be implemented because REIT tax rules have yet to be cleared by the Bureau of Internal Revenue.

Mr. Sebastian said the lack of original public offering in the local bourse should persuade investors to put money in REIT companies. "Unless we augment the stocks, the traded volume will linger inadequate. REITs will be the IPOs that the Philippine Stock Exchange can anticipate to increase its business."

Property giants have uttered awareness in acquiring funds through the fresh venture vehicle. SM Prime Holdings, Inc., the country ’s largest mall operator, is looking to raise as much as $600 million through a REIT, while Ayala Land, Incdesires to raise a minimum $300 million. One of the tax benefits to be enjoyed by REITs is a 50% discount on documentary stamps for the transfer of real property to REIT companies. The law also excepted from tax any initial public offering and secondary offering of securities.

The Finance department estimates the REIT law to result in P2.7 billion in proceeds losses annually.

Mr. Purisima said the government was also looking at focusing on estate tax collections to shore up revenues. He noted that there are about 400,000 deaths recorded per year, but estate tax collections amount to only less than a billion each year. The government aims to assemble a total of P1.29 trillion in revenues this year.

The gurgle in the Chinese real estate market

A housing booms can soon enlarge into bubbles and become a source of great risk to the economy has been amply proved by the financial crisis. Everybody knows that the crisis started with a housing boom in the US. The Chinese government definitely believes that a similar bubble has developed in its country, which is why it has cracked down hard on its real estate sector. But how big is this bubble? How far have real estate prices gone up in China? These are the questions addressed by Jing Wu, Yongheng Deng and Joseph Gyourko.

Here are a hardly any startling facts the researchers have unearthed. Land values, adjusted for price rises and differences in quality, have shot up by nearly 800% since the first quarter of 2003, with half that rise occurring over the past two years. House prices, after adjusting for inflation, have enlarged by 225% in 35 main Chinese cities, with 60% of that, or 140 percentage points, being the increase since the first quarter of 2007. What’s more, prices have increased 41% this year. It’s no revelation then that the Chinese government is so troubled about overheating in real estate.

Price to rent ratios, too, have risen penetratingly in many cities, with the ratio mounting by almost 75% in the last three years in Beijing. Prices have risen faster than rents in all major cities and the ratio is a very high 45.9 in Beijing. The reason for such a skewed ratio is that home buyers are assuming large capital gains on their purchases.

This real estate bubble could have on the banking sector. From the end of 2008, outstanding loans on inhabited mortgages have increased by 38% and loans to real estate developers by 50%. While Chinese house owners have higher levels of their own money in their homes than Americans, the fact remains that “even modest declines in expected appreciation would lead to large price declines of over 40% in markets such as Beijing.”

And lastly, think about how imperative the housing market is for China’s economy. The manufacture industry accounts for “5.7% of Chinese GDP; it employs 14.3% of all workers in urban areas; and it consumes about 40% of all steel and lumber produced in China

Evaluating circumstances in Major Chinese Housing Markets - By Jing Wu, Joseph Gyourko and Yongheng Deng, NBER working paper