|
|
Marcus & Millichap's Jackman Group Releases Student Housing Bulletin
Marcus & Millichap's premier Student Housing Investment team, The Jackman Group, has released the 4th Edition of the student housing investment industry's most widely used quarterly publication, The Student Housing Bulletin. This issue covers topics such as: Click here to see the latest version of The Student Housing Bulletin. Labels: cap rates, price per bed, price per unit, student housing, Student Housing Bulletin, student housing construction, Student Housing Investment, student housing lending, student housing properties
Obama's Ambitious Plan for Community Colleges Raises Hopes and Questions
The former pastry chef studying for a fresh start as a clinical therapist. The professor who gets so many calls from laid-off autoworkers he can recite them by heart. The college president coping with 300- person waiting lists. Their struggles framed the backdrop on Tuesday as President Obama visited Macomb Community College here, outside Detroit, to propose an unprecedented federal infusion of dollars for two-year colleges. “All too often, community colleges are treated like the stepchild of the higher-education system,” Mr. Obama said. “They’re an afterthought, if they’re thought of at all.” Read more here...Labels: community colleges, stimulus
Savings Are Good, But May Slow Recovery
Mark Gongloff recently reported in the Wall Street Journal an interesting piece which may affect the long-term valuation models of many real estate investors. In our discounted cash flow models, we must assume a certain stabilized growth rate and over the recent years, those growth rates were likely higher than we expect to see going forward, according to Gongloff. The article references a recent San Francisco Fed Paper which predicts as much as a 75bps drop in consumption growth each year due to increased savings rates. The latest personal-income and personal-spending data is reported at the BEA website. Below are some highlights of the article: 
- Strength of the recovery dependent upon savings accounts
- Combination of falling incomes and higher spending means consumers' savings will likely fall after surging to 6.9% in May
- Long-term path for savings is inevitably higher
- Ratio of household net worth to disposable income is at its lowest level since 1992
- Current net-worth figures are consistent historically with savings rates of between 6% and 10%
- If savings merely rise to the low end of that range, $700 billion in consumer income could be removed from GDP next year
- A 10% savings rate between now and 2018 would shave three-quarters of a percentage point from consumption growth each year
- High savings rates could spur demand for Treasury bonds and short-term corporate debt, keeping interest rates low
Labels: personal consumption, personal savings, recovery, savings rate, spending
Small GDP Contraction Signals the Recession is Winding Down
 - During the second quarter, gross domestic product (GDP) beat consensus expectations, declining at a far more modest rate than in preceding quarters. The economy is still contracting; however, the recent data suggest that the recession is nearing an end and that a recovery could begin to take shape in the coming months. GDP fell at an annualized rate of 1 percent in the second quarter, compared to annualized declines of 6.4 percent in the first quarter and 5.5 percent in the fourth quarter of 2008. While the more subdued decline is a welcome sign, the depth of the downturn has been significant; GDP has now contracted for four consecutive quarters for the first time since the government started tracking the data in 1947.
- The economic stimulus has begun to kick in, limiting the recent decline in GDP and likely supporting modest growth in the coming quarters. Government spending increased by an annualized rate of 5.6 percent in the second quarter, compared to a 2.6 percent drop in the first quarter.
- In contrast to the acceleration of government spending, consumers are holding back. Personal consumption expenditures, which account for approximately two-thirds of GDP, fell at an annualized rate of 1.2 percent in the second quarter, after ticking slightly higher in the first three months of the year. Severe job losses and persistent weakness in the housing market have weakened consumer demand, which will likely result in a slower recovery than in past cycles. A “U-shaped” recovery, or one where the economy comes out of a recession with an extended period of low growth before posting solid gains, is increasingly likely.
- In response to softer consumer demand, businesses are scaling back inventory levels. While a reduction in inventories is a drag on GDP, it also can provide fuel for a recovery. When spending begins to gain momentum, businesses will have to crank up production, rather than pull from existing stockpiles of goods, to meet the new demand. The industrial sector will be the primary commercial real estate sector to benefit from increased production.
- Reduced consumer demand is weighing on retailers. During the first six months of 2009, negative net absorption of retail space topped 30 million square feet, and vacancy increased 110 basis points to 9.5 percent. With demand softening, property owners have dropped rents and offered greater concessions, resulting in decreased investment activity and rising cap rates, particularly among multi-tenant properties.
Labels: cap rates, commercial real estate, concessions, consumer demand, gdp, government spending, multi-tenant, net absorption, personal consumption, rents, retail space, retailers, stimulus, vacancy
More Cuts for Colleges Are Likely Even After States Pass Budgets
A few weeks after wrapping up their budgets for the new fiscal year, lawmakers in some states already expect a new round of spending cuts, including to higher education, as tax revenues continue to fall. Estimates of states’ revenue shortfalls have grown worse since the spring, reaching a total of nearly $143-billion when most states began the 2010 fiscal year, on July 1, according to a survey by the National Conference of State Legislatures. But at least 11 states are already expecting to make midyear cuts, totaling more than $22-billion, according to the Center on Budget and Policy Priorities, an advocacy group... Read more here...
Uncertain Summer - Colleges Try to Control Enrollment Melt
The Chronicle of Higher Education recently released an article discussing enrollment "melt" and the efforts many colleges are taking to counter this difficult phenomenon. The unstable economy has caused university administrators to plan for more attrition than usual, and they are taking extra steps to minimize the effects. Read more here...
Hessam Nadji on Commercial Property News
|
|
RSS Feed
Follow on Twitter