Long Beach Commercial Real Estate Council. Trends in the Real Estate Industry

Transcription

1 Long Beach Commercial Real Estate Council Trends in the Real Estate Industry 1

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3 Goals of Presentation Trends in Lending Trends in Interest Rates Real Estate Market Trends Real Estate Investor Trends (send to Randy Jones for copy of this presentation) 3

4 Coming Change in Lending - New Risk Rating Platforms Basel Accord - Risk Based Lending Estimated Default Frequency (EDF, DP, PD) X Loss Given Default (LGD, LR, ) = Expected Loss (EL ) What are the drivers? Your answer is your Risk Rating Model 4

5 Loan Delinquencies Other Measures Market Risk Banking Industry Real Estate Industry Interest Rate Risk Operational Risk Originator Bias Property Type Location of Collateral Strength of Borrower Guarantee Ability to Exit 5

6 CMBS Delinquencies - Vintage Figure 1: Performance Distribution by Vintage (%) Data / analysis from James Stouse,, CFA 6

7 CMBS Delinquencies - Property Type Figure 2: CMBS Delinquency by Property Type Data / analysis from James Stouse,, CFA 7

8 Interest Rates Treasury Yield - Recent Spot Rates Date 1 m 3 m 6 m 1 yr 2 yr 3 yr 5 yr 7 yr 10 y 20 y /1/ /2/ /6/ /7/ /8/

9 Interest Rates Treasury Yield Long Term Trend Rates 10-Year Tresury Yields

10 Rent Vacancy Data Sources Torto-Wheaton Research REIS Property & Portfolio Research CoStar CB Commercial Grubb & Ellis Cushman Wakefield RealFacts (Apt Only) 10

11 Rent Vacancy Data Sources Torto-Wheaton Research REIS Property & Portfolio Research CoStar CB Commercial Grubb & Ellis Cushman Wakefield RealFacts (Apt Only) 11

12 Rent Vacancy Data Sources Torto-Wheaton Research REIS Property & Portfolio Research CoStar CB Commercial Grubb & Ellis Cushman Wakefield RealFacts (Apt Only) 12

13 Rent Vacancy Data Sources Torto-Wheaton Research REIS Property & Portfolio Research CoStar CB Commercial Grubb & Ellis Cushman Wakefield RealFacts (Apt Only) 13

14 Rent/Vacancy Who has Projections? Torto-Wheaton Research - YES REIS - YES Property & Portfolio Research - YES CoStar - NO CB Commercial - YES Grubb & Ellis - YES Cushman Wakefield YES RealFacts (Apt Only) - NO 14

15 Sale Comps - Data Sources CoStar Comps REIS Real Capital Analytics LoopNet 15

16 Expense - Data Sources IREM (Office, Retail, Apt) NAIOP CoStar Comps REIS Your Firm s Files! 16

17 Cap Rate - Data Sources Real Capital Analytics RERC Investor Survey CB National Investor Survey Cushman Wakefield Grubb & Ellis - Outlook Korpacz Report CoStar Comps 17

18 Rent Vacancy Sources Strong Suits IREM (Office, Retail, Apt) CoStar Comps REIS Real Capital Analytics 18

19 Real Estate Loss - Data Sources FDIC Whole Portfolios Only Peer Groups Annual Reports Trepp CMBS data Conquest CMBS data Intex CMBS data 19

20 Expense - Data Sources IREM (Office, Retail, Apt) CoStar Comps REIS Real Capital Analytics 20

21 From this point on, the presentation is ½ PowerPoint and ½ Web. There is a live presentation of each data source. here! 21

22 Economy.com Precis Metro Report Economic/Demographic data 22

23 RealtyRates.com Capitalization Rates 23

24 RealtyRates.com Includes more class B & C than other surveys 24

25 RealtyRates.com Survey Counts 312 for Investor and 366 for Developer 25

26 Property & Portfolio Research Rent Index, Vacancy, NREI data Three major reports Derived Market Return Fundamentals 4-Pager 26

27 REIS Metro Page 80+ markets Supply, Rent, Vacancy, Absorption, Completions (up to 37 submarkets) 27

28 REIS MetroTrend *.xls 28

29 REIS Rent Comps Query Results 2 Check off the desired comps This search resulted in 17 comps. Pre 99 & non-east Dallas dropped results to 12 comps 29

30 REIS Rent Comps CompTrend 30

31 REIS Rent Comps CompQuote Expense & Lease Term Information 31

32 REIS Rent Comps CompQuote 32

33 Conclusions There are many data sources available today. Only national sources were demonstrated. Certain market have excellent local data providers. Several data sources were demonstrated in the web portion of this presentation that are not in these slides. Information and the proper use of data is the key to making smart decisions. The resources demonstrated today can help you avoid mistakes and concentrate resources in the most profitable metros/sectors. Keep a list of available resources. Set up accounts with providers so you can quickly access the data when needed. People frequently spend more time and resources searching for free data than the cost of purchasing the data. 33