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  • Fred Schmidt (National Perspective) - 2010 Kootenai County Market Forum

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    Mike King
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    Global Forecast US recovery will start slowly y y Europe and Japan will rebound even more slowly Interest Rates in the G-8 economies will remain low Fiscal stimulus will begin to ease Commodity Prices will move sideways Inflation should not be a problem US 2009 Was a Year of Severe Correction in Commercial and Residential Demand Driven Downturn Job Loss Current Unemployment is 9.7% US Property Sales Office, Industrial, Retail, Apartment Properties $5m+ Real Capital Analytics Decline 75% in 2008 over same period in 2007 Job Loss

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    Global Forecast US recovery will start slowly y y Europe and Japan will rebound even more slowly Interest Rates in the G-8 economies will remain low Fiscal stimulus will begin to ease Commodity Prices will move sideways Inflation should not be a problem US 2009 Was a Year of Severe Correction in Commercial and Residential Demand Driven Downturn Job Loss Current Unemployment is 9.7% US Property Sales Office, Industrial, Retail, Apartment Properties $5m+ Real Capital Analytics Decline 75% in 2008 over same period in 2007 Job Loss

    Copyright:

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    Download as PDF, TXT or read online from Scribd
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    33 views27 pages

    Fred Schmidt (National Perspective) - 2010 Kootenai County Market Forum

    Uploaded by

    Mike King
    Global Forecast US recovery will start slowly y y Europe and Japan will rebound even more slowly Interest Rates in the G-8 economies will remain low Fiscal stimulus will begin to ease Commodity Prices will move sideways Inflation should not be a problem US 2009 Was a Year of Severe Correction in Commercial and Residential Demand Driven Downturn Job Loss Current Unemployment is 9.7% US Property Sales Office, Industrial, Retail, Apartment Properties $5m+ Real Capital Analytics Decline 75% in 2008 over same period in 2007 Job Loss

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    Download as PDF, TXT or read online from Scribd
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    of 27

    F d Schmidt

    Fred S h idt

    President & COO


    Coldwell Banker Commerical
    Agenda

    • Overview of Global Economy &


    Commercial Real Estate markets
    •M
    Market
    k ViView off M
    Major
    j PProduct
    d T
    Types:
    Office, Industrial, Retail, Multi-family
    • Market Direction and Forecast
    “May you li
    “M live
    in interesting times”
    GDP Growth

    • US 5.6%
    • China 10%
    • India 8%
    • EU / Japan <1%
    Real GDP Forecast
    Equally Strong Tailwind –
    Headwinds
    • Strong Tailwinds
    • Government Stimulus, Improved
    Fi
    Financial
    i l Conditions,
    C di i P
    Pent U
    Up D
    Demand
    d
    • Strong Headwinds
    • Unemployment
    Unemployment, Remnants Housing
    Bubble, Financial Crisis.
    Global Forecast
    • US recoveryy will start slowlyy
    • Europe and Japan will rebound even
    more slowly
    • Interest Rates in the G-8 economies
    will remain low
    • Fiscal stimulus will begin to ease
    • Commodity Prices will move sideways
    • Inflation should not be a problem
    US

    2009 Was a Year of Severe Correction in


    Commercial and Residential

    Demand Driven Downturn

    Commercial Lagging Indicator


    Commercial: Avg.
    Avg Price/SF 2001-
    2001-2007

    * Real Capital Analytics


    Commercial Mortgage
    g g Backed
    Securities Issuances 2005-
    2005-2009

    * Real Capital Analytics


    Decline 75% in 2008 over same period in 2007
    Job Loss

    Current Unemployment is 9.7%


    US Property Sales
    Office, Industrial, Retail, Apartment
    Properties $5m+

    * Real Capital Analytics


    C
    Commercial
    i l Real
    R lE Estate T
    Today
    d
    • Not expected to turn until
    2011

    • Job picture is improving

    • Significant debt set to


    refinance
    fi
    Multi-
    M lti-Family
    Multi F il
    2009 2010
    Vacancy 8 0%
    8.0% 8 0%
    8.0%

    Rents $1,026 $995

    Absorption -8.5% -

    Source: Reis.com
    Multi--Family
    Multi

    Feb 10’ Sales - $1B

    Listings Outpaced
    Closed Transactions 2:1

    Cap Rate 7.0%


    Industrial

    2009 2010
    Vacancy 10 2%
    10.2% 11 4%
    11.4%

    Rents $4.96 $4.71

    Absorption -39.1% -0.4%

    Source: Reis.com
    Industrial

    Jan 10’–$624m Closed

    Over $3B in newly


    li d properties
    listed i

    Cap Rate 8.75%


    (highest since 03’)
    Retail
    2009 2010
    Vacancy 10 6%
    10.6% 12 0%
    12.0%

    Rents $19.52 $19.13

    Absorption -3.5% -4.0%

    Source: Reis.com
    Retail

    2009’–$11.6B Closed
    44% Reduction Year over
    Year

    Close to $2B in newly


    listed properties

    Cap Rate 7.75%


    86 BPS Increase
    Office

    2009 2010
    Vacancy 17 6%
    17.6% 18 6%
    18.6%

    Rents $29.18 $26.58

    Absorption -1.5% -0.6%

    Source: Reis.com
    Office
    2009’–$15.8B
    $ Closed
    71% Reduction

    Almost $3B properties


    came to market YTD

    Cap Rate 9.2%


    215 BPS Increase
    Opportunities
    pp
    • Keep an eye on your market

    • Lots of Purchasing
    g Opportunities
    pp Student housing
    g will
    continue to perform

    • Health
    H lth care will
    ill continue
    ti tto h
    have d
    demand
    d

    • Other Federal Government related business

    • Tenants
    – Blend and Extend
    – Move-up in Quality
    Opportunities
    pp

    “there have been more


    millionaires created in a
    recession than any other time in
    an economic cycle"
    y

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