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Investors Bullish about Commercial Real Estate

Investors are more bullish about commercial real estate than other investment classes, reported RERC in Commercial Real Estate Direct this week. "Institutional investors skittish about the slowing economy and the volatility and risk in the stock market are finding the diversification, stability and higher absolute returns of commercial real estate increasingly attractive," said Ken Riggs, president and CEO of RERC. click here to link to article

Apartment and Office Sectors Spark Investor Demand

RERC's investment conditions ratings for the institutional apartment and CBD office sectors jumped a full point during second quarter 2010, making them the two highest-rated property types that RERC surveys. The investment conditions rating for the apartment sector increased to 7.1, while the rating for the CBD office sector increased to...(click here for entire press release)

Summer 2010 RERC Real Estate Report Released

As the second half of 2010 gets underway, we are at an inflection point in this investment cycle and are facing the harsh realities of a risky world. Top-tier institutional real estate continues to be in great demand, despite the slowdown in the economy, and required returns are increasing slightly for some property types, while cap rates are mostly declining, as reflected in the summer 2010 issue of the RERC Real Estate Report, "Riding the Edge of Success." click here to purchase 2nd quarter report

Real Estate Recovery Dependent on Repricing and Deleveraging

Investors expecting to find bargains on distressed properties are finding instead that the amount of liquidity in the market and the ability of lenders to re-price assets to a level that will clear the market is more measured than most had predicted, explained RERC President and CEO Ken Riggs, in the Wall Street Journal's MarketWatch report. Riggs, who also serves as the CCIM Institute's chief real estate economist, stated that the process of refinancing debt serves as a guiding hand out of this severe and Draconian commercial real estate recession, and he doesn't see...click here to link to article

Kendall Kicks-off NCREIF Capital Markets Symposium

Del Kendall, managing director of RERC's Houston office, kicked-off the Capital Markets Symposium at the NCREIF Summer Meeting in Chicago on June 30. Held jointly with the Appraisal Institute, the session featured panel members Bob White, CEO of Real Capital Analytics (RCA), and Ken Riggs, CEO of RERC, who discussed the state of the commercial real estate market. Click here to access PowerPoint.

Emerging from the Rubble

This article authored by RERC's Ken Riggs and published in the newly released Real Estate Issues takes a close look at investment returns for commercial real estate for 2010 and 2011. Bid-ask spreads are starting to narrow and investment capital is becoming more available, but the challenge in bridging market pricing to market values amid the uncertainty that surrounds forecasting cash flow under stressful economic conditions remains. click here to download

False Bottom or Firm Foundation?

As discussed in Commercial Property Executive, RERC's Ken Riggs notes that commercial real estate investors, burned when the markets collapsed a couple years ago and who had been keeping their distance, have been returning to the fold as the risk and return metrics have moved in their favor--or, at least as far as they can see. The question is, however, whether what appears to be the bottom of the market is really a false bottom? The signals indicate...click here to read investment column

Recovery Gains Traction

Although there are more signs of recovery in the economy and in commercial real estate, the market remains bifurcated and the recovery will be very uneven. As noted in the spring 2010 RERC Real Estate Report, "Recovery Gains Traction," we are seeing lower cap and pre-tax yield rates as demand for institutional-level properties increases, but there is a lack of demand for second-tier properties, and returns remain...Click here to purchase first quarter report

Time to "Gear Up" for Institutional CRE Opportunities

RERC, with partners Real Capital Analytics (RCA) and Holliday Fenoglio Fowler (HFF), says that 2010 will be the best time in many years to buy well-priced institutional-quality commercial real estate. In the recently released annual forecast report, Expectations & Market Realities in Real Estate 2010: Crossing the Divide—The Passage to Recovery, the firms draw on their respective capabilities to thoroughly examine today's commercial real estate market. Click here to purchase.

Riggs Appointed Chief Real Estate Economist

Ken Riggs has been named chief real estate economist for the CCIM Institute. In addition to his continued role as president and CEO of RERC, Riggs will be responsible for addressing CCIM members at the annual fall meeting and through quarterly podcasts, conducting webinars through the CCIM Institute’s Ward Center for Real Estate Studies, providing analysis and forecast commentary to the media, and authoring the annual forecast article for the Institute's Commercial Investment Real Estate magazine.

Divisions Separate Investors from Opportunities

Despite forecasts of recovery in the commercial real estate market, there remain several factors that will limit a sustainable improvement in 2010, according to a report released by Real Estate Research Corp. (RERC) and the CCIM Institute, and as described in the Wall St. Journal's MarketWatch. Despite high unemployment, high vacancy rates, declining rents and other divides, RERC's Ken Riggs says, "Investors should view 2010 as a once-in-a-lifetime opportunity to snag key long-term...." To read the entire article, please click here.

Delinquent CRE Loans Could Sidetrack Recovery

Don Burns, CRE, FRICS, MAI, and managing director for RERC in the Atlanta office, reminded attendees of the Georgia Society of CFAs meeting that commercial real estate lags the economy, especially in the recovery phase. In a presentation to the group last week, Burns discussed how the deficit and high unemployment are already placing a huge drag on the economy, and that growing commercial real estate loan delinquencies put the economy at further risk. (Click here to access presentation.)

2010 Forecast Published in CIRE

Although the large institutions already have worked through a lion's share of repricing issues, the same cannot be said for the broader commercial real estate market. The year 2010 will be a year of reckoning for many investors who up to now have been able to defer their issues to a later date. Those playing the "blend, extend, and pretend" game may be forced to look ahead and see how daunting the road to recovery really is. "The Road to Recovery," by RERC's Ken Riggs as published in the Jan./Feb. 2010 issue of the Commercial Investment Real Estate magazine, discusses property trends and buy opportunities for 2010. (Click here to access article.)

"Pure Determination" Needed

Economic issues like a deepening federal deficit, high unemployment, increasing pressure on state and city budgets, and more bank failures continue to weigh down the investment environment for commercial real estate. Even so, RERC's new required pre-tax yield rates increased slightly over the previous quarter's rates, while capitalization rates are mixed… (Click here to purchase 4th quarter report)

Hotel Investors Look to Cap Rates for Sign of Stabilization

With little good news in the hotel market of late, investors looking for any ray of light at the end of the tunnel may be seeing it in capitalization rates. According to data presented in the summer 2009 issue of the RERC Real Estate Report, unleveraged going-in and terminal capitalization rates on an institutional level declined slightly, to 9.8 percent and 10.4 percent, respectively, during second quarter.

The Gauntlet Continues...

With investors summoning the strength and courage to continue their quest for returns, look to the fall 2009 RERC Real Estate Report, “The Gauntlet Continues,”for the latest cap rates, yield rates, investment conditions ratings, and other criteria. (Click here to purchase.)

Courage and Conviction Needed to Survive

Although we may be starting to see signs of stabilization in the economy, there is more pain ahead for the commercial real estate market. As shown in the new issue of the RERC Real Estate Report, investors will be required to muster the courage, conviction, and decisiveness needed to survive in this environment. click here to purchase

The Road to Recovery: Challenges and Opportunities

RERC's Ken Riggs and Principal Real Estate Investors' Randy Mundt offered their overview for the economy and for commercial real estate investment at the University of Chicago Graduate School of Business (GSB) Real Estate Conference on Nov. 5, 2009. (See PowerPoint presentation here.)

Retail Pre-Tax Yield Rates Retreat

Sluggish sales do not bode well for retailers, or for investors in regional retail malls, retail power centers, and neighborhood/community retail centers, says Managing Director Don Burns, and reflected by data released in the summer 2009 RERC Real Estate Report.

"7 Come 2011"

Although most investors do not want to stand back up at the real estate table until prices have stopped declining and have stabilized, RERC maintains that life is a gamble, and "7 come 2011," commercial real estate is still a bet that you have to take. See Ken Riggs' recent column, as published in Commercial Property Executive. (Click here to read.)

Valuation Navigates Steep Cliffs

RERC CEO Ken Riggs take an in-depth look at how cap rates impact values of commercial real estate in Valuation Navigates Steep Cliffs. Based on RERC’s second quarter 2009 required returns, the article compares these rates with NCREIF realized returns during various recessionary periods. Click here to read.

CRE Moving from Stress to Distress

A year after the U.S. financial system nearly collapsed, the stress on the credit markets has been relieved somewhat. Unfortunately, the distress in the commercial real estate market is intensifying, as more and more investors who have over leveraged or have no equity are defaulting...(see Ken Riggs' column in Commercial Property Executive)click here to read.

NCREIF Valuation Committee Mtg. Notes Presented

An open discussion on “What Is It Worth Now?” and a panel discussion headlined as “Four Forecasts” were the highlights of the NCREIF Valuation Committee, as described by RERC Managing Director Del Kendall. A reproduction of Mr. Kendall’s article is reprinted with permission from The Appraisal Journal, Summer 2009, ©2009 by the Appriasal Institute, Chicago, Illinois. All rights reserved. click here to access

Demand and Supply Analysis Critical to Self-Storage

To better anticipate the dynamics of a market for self-storage properties, RERC places great emphasis on various supply and demand factors in each subject's market area. For more information about this specialized analysis, or to request a copy of a white paper detailing this process, contact RERC Managing Director Kent Steele at 630.430.3865 or ksteele@rerc.com.

Holistic Asset Strategies Offered for Today's Challenges

Today's commercial real estate investment conditions call for both a depth of experience and new strategies. RERC Real Estate Solutions, an affiliate of RERC, has built a team of highly-qualified managers and advisors to address the complex issues associated with the valuation, management, liquidation, or improvement of distressed real estate assets. According to RERC Managing Director Jules Marling, RERC Real Estate Solutions will maximize...click here for complete article

McCoy Book on Ethics Key in Today's Environment

Bowen H. "Buzz" McCoy wrote Living Into Leadership: A Journey in Ethics several years ago, but the principles he discussed are particularly relevant today. "Ethics is what you are willing to lose for," he explains. (Read Ken Riggs' review of McCoy's book by clicking here. (Reprinted from The Counselor, Fall 2007 issue, with permission from The Counselors of Real Estate.)

Lack of Trust, Confidence Exhibited in Economy

This zero-sum decade certainly has had its share of winners and losers (mostly losers). As Ken Riggs points out in the kick-off presentation to the NCREIF Summer Conference in Chicago, investors have lost both trust and confidence in the economy and the markets.... click here to access PowerPoint presentation

Investors Determined to Overcome New Depths

Commercial real estate has yet to see bottom, but investors committed to this asset class are determined to overcome the depths of this recession and the challenges facing the industry. As noted in the current issue of the RERC Real Estate Report, the losses in this recession appear to be more severe than what the industry suffered in the 1990s. click here to purchase

Riggs Elected 2010 Second Vice Chair: Headed for CRE Chairmanship

Kenneth P. Riggs, Jr., CRE, has been elected 2010 second vice chair of The Counselors of Real Estate, setting him on the path for the 2012 CRE chairmanship.

Real Estate Travels Uneven Road to Recovery

Despite some positive indicators in the economy, the retail property sector continues to struggle, as explained by Ken Riggs in Commercial Property News Online. Tied to consumers and reflecting their spending habits in this uneven road to recovery, the sector received the lowest return-versus-risk rating from institutional investors... see May 26, 2009 issue of CPNonline...