Real Estate Fundaments “The Facts of Life” Real Estate Fundamentals The facts of Life.
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Transcript of Real Estate Fundaments “The Facts of Life” Real Estate Fundamentals The facts of Life.
Real Estate Fundaments
“The Facts of Life”
Real Estate FundamentalsThe facts of Life
UNEMPLOYMENT AND RETAIL SALES
NOI forecast to decline 15% peak to trough
National Office Direct Class A Asking Rental Rates
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
2Q00
4Q00
2Q01
4Q01
2Q02
4Q02
2Q03
4Q03
2Q04
4Q04
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
2Q09
4Q09
CBD
Non-CBD
National Office CBD & Non-CBD Overall Absorption
7
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
1994 1995 1996 1997 1998 1999 2000* 2001* 2002 2003 2004 2005 2006 2007 2008 2009**
CBD
Non-CBD
US Sales Volumes by Property Type 2007 - 2009
$51.5
$83.6
$61.4
$101.4
$208.2
$21.9
$12.1
$21.0
$38.3
$52.9
$3.5
$2.0
$3.5
$4.7
$5.6
$0 $50 $100 $150 $200 $250
Industrial
Hotel
Retail
Apartment
Office
Dollar Volume (billions)
2007 2008 2009Q2
NCREIF CAP RATES
CRE prices down 43% peak to date
CRE Debt Maturities and Equity Gap
Mirror, mirror on the wall….
• Mark Buono, Managing Director, Goldman, Sachs & Co.
• David Dorros, Managing Director, CB Richard Ellis
• Michael McDonald, Managing Director, Eastdil Secured, LLC
• Peter Muoio, Senior Principal, Maximus Advisors
• Marc Rosenberg, Executive Vice President, Cushman & Wakefield
U.S. Market Cycles CBD Office - Major Mkts (2009)
13
Growth Weakening
LA Central
Boston, Houston, Washington, D.C.
Market Equilibrium
Philadelphia
RecoveringSlow Growth
DallasDowntown NY, Minneapolis
Midtown Manhattan, San Francisco, Seattle,
CBRE thinks we might be 80% thru the cycle…