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alternative investments, real estate and politics. emerging technology and economics. inspirational quotes from smart sapiens... these are a few of my favorite things.
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Mezzanine lending is getting caught up in the same frenzy for yield that is sweeping the broader commercial real estate market. Competition is ramping up as new players―and more capital―continue to enter the sector. Even typically conservative lenders such as life insurance companies are pursuing mezz. lending in order to capture higher yields.
The split-roll proponents say they’re just raising $6 billion in needed government revenues by rejiggering the tax rates. Who do they think owns these buildings? Owners include hundreds of thousands of small investors in real estate investment trusts and other forms of collective real estate ownership. Retirees who depend on pension funds, insurance annuities and their own personal portfolios to supplement their incomes will lose revenue.
The split-roll proponents say they’re just raising $6 billion in needed government revenues by rejiggering the tax rates. Who do they think owns these buildings? Owners include hundreds of thousands of small investors in real estate investment trusts and other forms of collective real estate ownership. Retirees who depend on pension funds, insurance annuities and their own personal portfolios to supplement their incomes will lose revenue.
The Terrorism Risk Insurance Act, enacted a year after the 9/11 attacks, makes American taxpayers the backstop for private insurance companies in the event of such catastrophes. The legislation comes up for renewal in 2014. If Congress fails to extend the insurance program, it will become increasingly difficult for building owners to get new policies. That would raise the already steep cost of doing business in the post-9/11 world — in particular for the owners of iconic skyscrapers and hotels in New York that are logical terrorist targets — by raising premiums and affecting building values.
Real estate topped the list of sovereign wealth funds’ investments last year, overtaking commodities and financial services, according to Institutional Investor’s Sovereign Wealth Center.
“The best moat you can have is your own talent” - 32:47
An initial public offering for an unusual real-estate investment trust is set to test investor appetite for stocks offering the potential for higher yields and plays on the housing-price recovery.
Riskier real-estate projects are starting to move forward again, thanks in part to a resurgence of so-called opportunity real-estate funds, which are getting money from some big pension funds.
A new Jones Lang LaSalle (JLL) report reveals that companies that view real estate assets singularly as a source of short-term cost reduction are actually incurring hidden long-term financial and operational risks. The 2013 survey, which measures insights from more than 630 corporate real estate executives in 39 countries, points to the prodigious pressure corporate real estate decision-makers are under as 68 percent of respondents recognize increasing demand from senior business leaders to enhance productivity of the real estate portfolio. JLL addresses the outcomes of these increased pressures in its Global Corporate Real Estate Trends report, which details the top five risks and rewards corporate real estate users are facing in 2013:
Commercial properties are taking on larger and larger loans relative to their stabilized income—and that could mean trouble down the road, according to a review by Moody’s Investors Service of commercial mortgage-backed securities issued in the first quarter. “We are beginning to see some signs of credit slippage,” says Tad Philipp, Moody’s director of commercial real estate research. However, because of low interest rates and strengthening property fundamentals, they shouldn’t have much trouble making their monthly mortgage payments.
American International Group Inc. is increasing investments in commercial real estate, with a focus on apartment buildings as U.S. rental demand climbs.
Corporations find a friend in the Supreme Court.
The Commercial Real Estate and Economic Development (CREED) Act, originally enacted as part of the Small Business Jobs Act of 2010, was operational for only eight short months last year before it expired. It allowed small business owners to use Small Business Administration (SBA) 504 loans to refinance certain existing commercial mortgages. The program is based on a proven formula: Small Business + Commercial Real Estate = Job Growth.
A number of studies demonstrate that global pension plans have steadily increased allocations to private market investments in the past few years. According to Towers Watson’s 2013 Global Pension Assets Study, assets under management dedicated to alternative investments reached record levels (19%) at the end of 2011, up from 5% in 1995, outpacing net new allocations to traditional asset classes for institutional investors around the globe. This growth is expected to continue in 2013 and beyond.
According to a recent McKinsey and Co. report data show that alternative investments doubled to $6.5 Trillion between 2005 and 2011 and experts believe the trend will continue, and even increase, throughout 2013. The prospect of higher yields, tax efficiency benefits and greater stability is what makes these investments so attractive. Unlike bonds, real property retains value and invested tenants offer added security. For more on this continue reading the following article from National Real Estate Investor.
