Tuesday, March 22, 2011

Point of maximum risk in investment vs. Point of maximum opportunity. Whats your perception?



If Your Goal Is to Buy Low, Buy Now!
There is a very famous saying which asserts “Sell High, Buy Low”. It is obviously great advice no matter what the investment. Below is a graph showing the cycle of investments. It shows the points of maximum risk and maximum opportunity when purchasing. We want to sell high (point of maximum risk) and buy low (point of maximum opportunity).
The challenge is how to determine when we have hit bottom if you are a purchaser. The only time you can guarantee a bottom is after you pass it.
However, there is more and more evidence that the COST of a home has in fact hit bottom. Notice we have used the word COST. Unless you are an all cash buyer, you must take into consideration the expense of financing a property to determine the true cost of purchasing the home. Interest rates have increased over the last quarter; and the rise in rates has counteracted any fall in prices.
Let’s look at an example:
Let’s say you were going to take out a $200,000 30-year-fixed-rate mortgage in November of 2010. At that time, interest rates were 4.17% (as per Freddie Mac). Your principle and interest payment would have come to $974.54. According to the most recent report from Case Shiller house prices fell 3.9% in the 4th quarter of 2010. The most recent report from the Federal Housing Finance Agency shows a 0.8% fall in prices. Let’s use the larger percentage decrease: 3.9%.
For the sake of keeping the math simple, we will now say you can get the same house with a $192,000 mortgage (4% discount from November price). Interest rates are now 4.95% (as per Freddie Mac).
Your principle and interest payment would now be $1,067.54.
By waiting to pay less for the PRICE of the house, the COST increased $93 a month. That adds up to $1,116 a year and over $33,000 over the life of the loan.
We realize that there are other things to consider (ex. the mortgage tax deduction, etc.). This example is just a simple way to show that there is a difference between COST and PRICE.

Bottom Line

If you want to buy low, buy now. It appears COST has hit its lowest point.

Email rgoldstein@rubloff.com for more info. on wealth mngmt. and to buy/sell your residential/commercial properties.

Monday, March 14, 2011

Americans Confident in Recovery of Real Estate Market


 

 

Americans Confident in Recovery of Real Estate Market

RISMEDIA, March 14, 2011—The majority of America’s potential homebuyers and sellers—68 percent—believe that the real estate market and property values will recover in the next year or two, according to a survey released recently by Prudential Real Estate and Relocation Services, Inc., a Prudential Financial, Inc. [NYSE:PRU] company.
This exceeds the 47 percent of Americans who expected house prices would rise in a similar survey conducted in April 2010, underscoring a more bullish outlook for the real estate market today.
In addition, 86 percent of Americans believe real estate is a good investment despite the market volatility of the past few years. The Prudential Real Estate Outlook Survey of 1,253 Americans between the ages of 25-64 in the market for buying a home was conducted Jan. 20-27, 2011.
The survey reveals that six in 10 respondents are more interested in buying real estate (58%) and are optimistic about buying given the momentum of the economic recovery (59%). It also shows that although the price of many Americans’ homes declined during the recession, 89 percent recognize they can also buy a new house at a lower price.
“This survey clearly demonstrates that Americans continue to be optimistic about the real estate market and believe that home prices will rise,” said James Mallozzi, chief executive officer of Prudential Real Estate and Relocation Services, Inc. “A key take away from the survey is although consumers recognize that it is a good time to buy, they are concerned about their ability to sell their homes. This is one of the reasons the market is still struggling to recover.”
For those on the fence about buying, uncertainty about selling an existing home (77 percent), concern about getting a fair price for the home (67 percent) and emotions (58 percent) are holding them back. For those who have sold homes in the past year, despite the down market 78 percent report that they were satisfied with the sale. Of these, 32 percent were very satisfied with the final price of their home and 46 percent were grateful they were able to sell given market conditions. A relatively small number, 22 percent, indicated that they were disappointed or resentful about the price they received for their home.
The survey highlighted Americans’ interest in trading up their homes. Of the 45 percent looking to trade up, 64 percent wanted more space or property, 49 percent a nicer house and 41 percent a better neighborhood. Only 21 percent surveyed said they were looking to scale down, and 34 percent said that they wanted a similar home.
The survey highlighted the importance of getting the right price in today’s market —74 percent of buyers believe that many homes could meet their needs and that price is a significant differentiator, while 26 percent stated that they were willing to pay top of market for a home that specifically suits their needs. In setting the right price, however, sellers were split—with 53 percent wanting to price right at or slightly below market to attract more bids and 47 percent wanting to price slightly higher than market and hoping to find a buyer willing to pay more.
The majority of respondents highlighted the importance of real estate agents in the process of buying or selling their home. Seventy-five percent of those surveyed said that an agent is very important or essential to this process, with only 24 percent saying agents are helpful but not imperative.
“Americans continue to see real estate agents as having a very important role in helping them price, buy and sell their homes,” added Mallozzi. “Although the data underscores the value real estate agents provide, it also shows that the industry needs to continue to work hard to meet clients’ unique needs.”
The Prudential Real Estate Outlook Survey was conducted online. The margin of error is +/- 3 percent. A more detailed breakdown of the data is available, as well as supporting charts and visuals, at www.news.prudential.com.
The survey results were also presented at Prudential Real Estate Affiliates’ (PREA’s) 2011 Prudential Sales Convention held in San Diego, CA last week. Company President Earl Lee addressed attendees there, echoing the survey statistics and stressing the importance of homeownership.
“Over the past four years we have fought, persevered and overcame because we believe in homeownership,” Lee said. “Consumers have incredible opportunities now. We are moving to a better time and people are spending more money.”
He also noted the NAR housing affordability index is “at an all-time high, but we aren’t out of the woods yet.” He added that while consumers are focusing on their monthly spend rather than overall home prices, “there are golden opportunities for buyers today that won’t last. Consumers believe that the brighter days in real estate are still years ahead, but they believe that real estate is a good investment. Homeownership is still essential and real estate is an economic keystone.”
Mallozzi also introduced “Nextwork,” an online virtual community for Prudential agents where they will be able to access coaching programs, coach others, share referrals, ideas and more.
“Nextwork is going to take Prudential to a whole, new level and offer a new way to challenge ourselves by seeing what’s next and what works,” he said. “It will offer a fresh perspective and tie the network together.”
The company also released this year’s list of Gibraltar Circle recipients. The Gibraltar Circle Award is presented to the Top 50 companies in the Prudential Real Estate Affiliate Network. Here is a list of this year’s awardees:
1. Prudential Douglas Elliman
2. Prudential California- Southern California and Central Coast
3. Prudential Fox & Roach
4. Prudential Connecticut
5. Prudential Florida Realty
6. Prudential Rubloff Properties- Chicago

Commercial sales jump locally in 2010. Carpe Diem. Time to buy..

  -  -  — Local commercial property sales rebounded in 2010, a trend that's continuing this year amid an improved economy and lending climate.
Sales of Chicago-area commercial properties totaled nearly $5.1 billion last year, a 164% gain from 2009, according to Real Capital Analytics Inc., a New York-based research firm. Investors have become especially aggressive bidding up prices of trophy properties like the Hyatt Center, a 49-story West Loop office tower that the Pritzker family sold for $625 million in December.
“For the best assets in Chicago, I've never seen more fierce competition than right now, including 2006-2007. It's amazing,” says Dan Fasulo, a managing director and head of research at Real Capital Analytics.
Deep-pocketed institutional investors, real estate investment trusts and equity funds came charging back into the market last year, tempting some owners of big high-end properties to sell out.
At the same time, activity is picking up at the bottom of the market, as more lenders unload distressed properties at steep discounts. Brokers chatter that buyers today either want “trophies or trash.”
The most dramatic sales surge occurred in the office sector, where the 46 properties sold represented more than double the transactions that took place in 2009. Volume, which jumped from $493.6 million to $2.7 billion in 2010, surpassed 2008's total of $2.2 billion and accounted for more than half of all commercial property sales in Chicago last year.
In addition to Class A downtown properties like the Hyatt Center, the total included a vacant 209,000-square-foot office building in Rolling Meadows that Chicago-based Imperial Realty Co. bought for $4.5 million, about 15% of the outstanding debt on the property.
Fewer Chicago-area apartment properties sold last year — just 20, compared to 47 in 2009. But a few big deals helped push the dollar volume of transactions up by 84%. In the biggest local apartment deal in the past three years, J. P. Morgan Asset Management paid $182 million for a majority stake in the 474 apartments and other commercial space in the Aqua near Millennium Park, one of the most expensive apartment buildings in the city.
The apartment market is the healthiest real estate sector by far, one reason prices have surged over the past year. But with occupancies and rents continuing to rise, some landlords are reluctant to give up future income growth for a quick cashout.
“A lot of people are indecisive as to whether they'll sell or hold,” says Mark Stern, a senior vice-president with Waterton Associates LLC, a Chicago-based apartment investor.
Sales of Chicago-area warehouses and manufacturing facilities lagged behind other commercial property types, posting just an 8% increase by volume year over year.
Amid rebounding prices, first-year returns, or capitalization rates, on local properties fell for each of the four main property types, dropping by as much as 150 basis points for office properties. As values increase, lenders are dispensing with “pretend and extend” tactics and bringing more properties to market. Mr. Fasulo says the wave of distress that has plagued the market has finally subsided and predicts loan resolutions will significantly outnumber any new distress going forward.
While lenders remain cautious about real estate, the availability of debt to finance property acquisitions continues to increase, and interest rates remain extremely low. The big question is interest rates, and what happens to sales volume if they jump.

Thursday, March 3, 2011

If Your Goal Is to Buy Low, Buy Now!

There is a very famous saying which asserts “Sell High, Buy Low”. It is obviously great advice no matter what the investment. Below is a graph showing the cycle of investments. It shows the points of maximum risk and maximum opportunity when purchasing. We want to sell high (point of maximum risk) and buy low (point of maximum opportunity).
The challenge is how to determine when we have hit bottom if you are a purchaser. The only time you can guarantee a bottom is after you pass it.
However, there is more and more evidence that the COST of a home has in fact hit bottom. Notice we have used the word COST. Unless you are an all cash buyer, you must take into consideration the expense of financing a property to determine the true cost of purchasing the home. Interest rates have increased over the last quarter; and the rise in rates has counteracted any fall in prices.
Let’s look at an example:
Let’s say you were going to take out a $200,000 30-year-fixed-rate mortgage in November of 2010. At that time, interest rates were 4.17% (as per Freddie Mac). Your principle and interest payment would have come to $974.54. According to the most recent report from Case Shiller house prices fell 3.9% in the 4th quarter of 2010. The most recent report from the Federal Housing Finance Agency shows a 0.8% fall in prices. Let’s use the larger percentage decrease: 3.9%.
For the sake of keeping the math simple, we will now say you can get the same house with a $192,000 mortgage (4% discount from November price). Interest rates are now 4.95% (as per Freddie Mac).
Your principle and interest payment would now be $1,067.54.
By waiting to pay less for the PRICE of the house, the COST increased $93 a month. That adds up to $1,116 a year and over $33,000 over the life of the loan.
We realize that there are other things to consider (ex. the mortgage tax deduction, etc.). This example is just a simple way to show that there is a difference between COST and PRICE.

Bottom Line

If you want to buy low, buy now. It appears COST has hit its lowest point.

Wednesday, March 2, 2011

HOME LIGHTING: 7 THINGS YOU DIDN'T KNOW BUT SHOULD

 
 Feature Photo
HOME LIGHTING: 7 THINGS YOU DIDN'T KNOW BUT SHOULD
Lighting is a significant expense for many of us, and it also affects how we work, play and feel. The good news is that new advances in technology are providing more comfort, flexibility and efficiency.

1. $1 Invested in Efficient Lighting Can Pay Back up to $6 in Energy Savings
The standard incandescent bulb – what we typically think of as a "basic light bulb" – is a pretty inefficient piece of technology, wasting 90 to 98% of its electrical use as heat rather than useful light. Much better are fluorescents, including the now-ubiquitous compact fluorescent lights (CFLs), which are roughly 75% more efficient for the same light output.
By now, many people are aware of this fact, but few have taken a moment to actually calculate how much money they could save if they switched out their high-use bulbs to CFLs, as the commercials instruct us. In his book Wind Power for Dummies, Ian Woofenden calculates that a family using a 75-watt incandescent for six hours per day would spend about $54 a year on energy (at 32 cents per kWh, which admittedly is higher than most current prices, although experts expect utility rates to climb in the near future), including the costs of replacement bulbs at 75 cents each. If they replaced that instead with a 20-watt CFL, to produce the same amount of light, it would cost $14 a year to power. That fluorescent probably cost $6 but should last them four years at a use of six hours a day (without rapid switching), leading to a total expenditure of $15.50 per year over that time – $38.50 less per year than using incandescents. That's a simple return on investment (ROI) of 642% per year.
That kind of ROI is hard to beat, which explains why heavy energy users, such as the managers of large commercial buildings, are switching to greener lighting in droves. Few technologies provide such a rapid payback on investment, and this blows away potential rivals like generating your own solar or wind power.
One caveat: lighting tends to make up only about 9% of the typical American home's annual electricity use, so switching out your bulbs isn't necessarily going to make you rich (though it is certainly great for the planet). For commercial facilities, however, lighting makes up an average of 38% of electricity use.
2. Not All Compact Fluorescent Bulbs Last a Long Time
Some discount brands of compact fluorescents have disappointed consumers with short lives and relatively poor light quality. It is true that rapid switching is especially hard on them, so they often aren't good candidates for closets. Cold temperatures also decrease their lifespans.
But to ensure quality, look for Energy Star-certified models, since they must meet a range of criteria that go beyond energy efficiency. They must come with a two-year warranty, have a minimum rated lifespan of at least 6,000 hours and cannot emit an audible noise. They must turn on in less than one second and reach at least 80% of their output within three minutes. They can't have more than five milligrams of mercury.
3. Spent Fluorescents Shouldn't Be Tossed in the Trash
All fluorescent bulbs contain a small, and decreasing, amount of mercury, which is toxic. They actually result in less mercury released into the environment than incandescents, since those use so much more energy, much of which is generated from coal (which releases mercury). You can opt for low-mercury and safety CFLs, which have a protective outer dome to contain the contents in case of breakage.
If a fluorescent light breaks, ventilate the room for at least 15 minutes, keeping everyone away. Carefully scoop up all fragments with a piece of cardboard and use sticky tape to pick up any remaining residue. Then wipe the area with damp paper towels and place everything in a sealed container (glass is best). Take everything to your local hazardous waste dump, or find a location at lamprecycle.org. Same goes for spent but unbroken CFLs – it is illegal to throw them in the trash in many places. Luckily, many retailers, such as Home Depot, are sponsoring collection spots as well
4. Installing Dimmers Could Save More Energy Than Changing Bulbs
We interviewed some lighting experts who argued that if you are going to change one thing about your lighting, add some dimmers rather than switch to CFLs or LEDs. More efficient bulbs certainly have benefits, but they do require some adjustment on the part of users, because they are not exactly the same as the incandescents we're used to. Dimmers, on the other hand, require no learning curve, and provide added flexibility, comfort and beauty.
"Even if you never use the dimmer you installed, it saves about four percent of the energy for that light," Michael Smith, a VP of dimmer maker Lutron, told us. This is because today's electronic dimmers, which have dominated the market over recent years, have circuitry that optimizes efficiency. Any time you dim the lights down, you use less energy.
Many modern dimmers come with remote controls, and they can be readily tied in to whole-house systems, or programmed for security and convenience.

5. Halogen Bulbs Are Often the Best Choice for Dimmers
When we started working on Green Lighting, we didn't think too much of halogen bulbs, since they are only 10 to 40% more energy efficient than incandescents, and last only two to three times longer (versus more impressive CFLs and LEDs). But through our research and experimentation, we gained more appreciation for them as affordable and convenient stopgap options for the next few years, particularly when it comes to dimming.
Halogens are really incandescents with some added technology, and they dim like incandescents, in a very steady, smooth progression from 100% down to zero. Dimming them actually makes them last longer and saves energy, and the small size of halogens means they work great for track lighting, under cabinets and many other applications. In contrast, normal CFLs cannot be dimmed. Those models offered with a dimmable ballast are more expensive but don't perform as smoothly as what people are used to; they dim in stages and must be started over each time they are switched off. LEDs can be nicely dimmed with the proper circuitry but the market isn't quite there for most practical applications.
6. Standard Overhead Lighting Is Worse than Alternatives
Most of us grew up with a single overhead light in each room (or a bank of lights in the case of classrooms and work spaces), since that's the easiest for builders to install. But as interior designers know, a single overhead light is about the least flattering and least comfortable scheme there is. It tends to produce glare and harsh shadows that can be unpleasant and hurt productivity, since it can lead to eye strain.
It's always advisable to have at least two sources of light for each space, and preferably not a central overhead. Architectural lighting can work wonders, and it's not difficult or expensive to install. Place small lights called coves on the tops of cabinets, shining up toward the ceiling, to make your kitchen look larger and more inviting. Place a valence on a wall, which shines light up and down, or use a sconce for elegance. If you've ever been to a Hollister clothing store, note the dramatic effects that can be achieved with spot lighting.
For bedrooms, soften the light with recessed downlights (ideally aimed at the foot of the bed), paired with a table lamp or directional lights at the head of the bed for reading. In offices, use diffusers with fluorescents to soften them and pair them with wall lights or ample daylighting. Brighten a basement by angling a few recessed ceiling lights against a lightly colored wall.

7. LEDs Will Become More and More Common
Light emitting diodes (LEDs) have been around for decades, but they have really only recently become bright enough to work as general lighting. Their development is progressing rapidly, and their cost is dropping. Several major manufacturers (GE, Philips, Sylvania, Lemnis) are poised to offer "retrofit" bulbs that work in standard fixtures, replacing a 60-watt bulb for around 12 watts, for surprisingly competitive prices.
LEDs are widely seen as the future of lighting, and they are an exciting technology that is now being embraced by first adopters. However there will be some adjustment period. Although they are getting closer to replacing other bright lights, they are still not as good at projecting illumination in 360 degrees. This is why they have historically been used more for directional lighting (as in flashlights and desk lamps), and they can cause shadowing. LEDs also thus far produce cooler light, although quality is improving. In general, it's a good idea to stay away from discount brands, which have had some early quality issues. Go for something with a decent warranty.
LEDs are expected to last for tens of thousands of hours, they are highly efficient, and they are resistant to water and mechanical shock. So there are many good reasons to support them now, as well as look forward to the future.

Thursday, February 17, 2011

Green Details: Do the Eco thing in Salvaged Style

Reclaimed materials give these sustainable homes a distinctive touch.

 
Reclaimed and recycled materials add charm to a home while saving resources. Builders, remodelers, and architects are incorporating everything from used bricks and salvaged wood to chalkboard slate and old vinyl siding into their sustainable projects. Here are five homes that make salvage ultra-stylish.

Green Details

  • a salvaged door was scraped, re-painted, and hung from an old douglas fir beam to be used as a bathroom door.

    Trash to Treasure

    Reclaimed materials add character to architect Frederick Hyer's residential projects.
  • Looking Up

    Pine and oak trees from the site were used in the kitchen ceiling.
  • hand-hewn cypress beams salvaged from the ringling towers hotel flank the fireplace.

    Hidden Gems

    Reclaimed materials are a hallmark of custom builder Josh Wynne's projects.
  • rough-hewn douglas fir ceiling beams were reclaimed from an old factory.

    Reclaimed Beauty

    This California home owes much of its rustic good looks to reclaimed materials.
  • windows and doors were salvaged from area buildings and incorporated into the energy star home.

    Old Is New Again

    The Flip House remodel re-used nearly all of the materials deconstructed from the original 1924 home.

Tuesday, February 15, 2011

positive news on the Chicago commercial RE mkt..Love to share.Carpe Diem.Great time to purchase

email me@rgoldstein@rubloff.com if interested in learning more re: wealth mngmt.

 


Chicago commercial real estate market dodges collapse, begins recovery

The local commercial real estate market is coming back, defying expectations of a prolonged collapse like the one that decimated the housing market.
Loan delinquencies are falling, property values are rising and leasing is picking up at the area's office buildings, shopping malls and warehouses, signs that the market is in the early stages of a broad-based recovery. Though it is far from reclaiming the ground lost in the deepest downturn since the early 1990s, Chicago clearly will avoid the devastating crash many predicted two years ago.
“Eighteen to 24 months ago, people were saying commercial real estate was the next shoe to drop,” says Bob Bach, senior vice-president and chief economist at Santa Ana, Calif.-based commercial real estate firm Grubb & Ellis Co. “We've come a long way from there, where the worst seems to have passed.”
For landlords struggling to make mortgage payments, the latest real estate data suggest that finding new tenants and keeping old ones will get easier. For businesses, it's an end to bargain-basement rents as the pendulum of power slowly swings back to landlords. For lenders, the figures show that the mountain of bad loans that piled up over the past two years is starting to shrink.
But the implications go beyond the real estate market, offering further evidence of a local rebound from the credit crisis and recession.
Delinquencies in two key categories—commercial mortgage-backed securities loans and bank loans—have fallen in recent months after rising for more than two years. The local delinquency rate on CMBS loans, which are packaged and resold, declined to 6.75% in January, the fourth straight monthly decline from a peak of 7.60% in September, according to New York-based research firm Trepp LLC.
The national CMBS-loan delinquency rate, meanwhile, continues to climb, hitting a fresh high of 9.31% in February. The Chicago area's rate is lower than metropolitan areas such as Philadelphia and Houston, although higher than premier markets like Washington, D.C., and San Francisco.
LOOKING UP
The delinquency rate on local commercial real estate loans held by banks also fell in the fourth quarter, to 7.3%, down from 7.7% in the third quarter, according to Foresight Analytics LLC, an Oakland, Calif.-based research firm.
Chicago's bank-loan delinquency rate is higher than the national average, which also fell in the fourth quarter, to 5.3%, from 5.5% in the third quarter.
The rates are falling as lenders resolve troubled loans faster than they stack up. With leasing slowly starting to pick up, more landlords once headed for trouble are now able to cover their loan payments. And more are showing a willingness to recapitalize their properties.
“As the market has turned, owners have gotten more bullish on their properties and more willing to invest their money to either restructure their loans at more favorable terms to the lender or offer more to the lender in a discounted loan payoff,” says real estate lawyer David Neff, partner in the Chicago office of law firm Perkins Coie LLP.
Many property owners slipped into the danger zone during the credit crunch of 2008-09 as plunging property values and a lack of lending made it impossible to refinance maturing loans. The biggest local victim was General Growth Properties Inc., the Chicago-based mall owner that emerged from Bankruptcy Court protection in November after defaulting on billions of dollars of debt.
The Allerton Hotel, above, is in foreclosure, but rising property values may allow its owner to pay off a $69-million loan. In retail, Meijer Inc. has agreed to open a store in Melrose Park's Winston Plaza, below, which lost its anchor tenant in 2008. Photos by Erik Unger
Today, rising property values and the return of lenders are saving some borrowers from the dire circumstances that existed just months ago. Included is the partnership that owns a half-empty, 540,000-square-foot office building at 111 W. Jackson Blvd. It defaulted on a $24-million loan last March after failing to pay it off at maturity. The 24-story building was appraised at just $21.7 million in January 2010.
Still, the story could have a happy ending: A group led by New York investor David Werner is buying the building for about $35 million to $40 million, sources say. The partnership, which includes north suburban investor Richard Colburn, is loaning money to finance the purchase.
GOING UPSCALE
Investors also have jumped back into the high end of the market, bidding up prices on some of the city's premier apartment buildings and office towers, like the Hyatt Center, a 49-story high-rise in the West Loop that the Pritzker family sold in December for $625 million. Unless interest rates jump, investment activity here is expected to stay on an upward path.
Yet it will take longer for leasing markets to fully recover. While the financial markets drive investment, demand for office, retail and industrial space is more closely tied to economic fundamentals.
“We're going to see continued capital flows (into real estate) and a continued healing,” says Bruce Cohen, chairman and CEO of Wrightwood Capital LLC, a Chicago-based real estate investment firm. “We obviously need job growth and consumer spending, the things that induce tenants to want to pay rent.”
To recover fully, ' We obviously need job growth and consumer spending, the things that induce tenants to want to pay rent.'
— Bruce Cohen
chairman and CEO
Wrightwood Capital LLC
That process has begun, according to recent data for the major property sectors—office, retail, industrial and apartments, which are leading the way. Rents at downtown Class A apartment buildings rose 7.2% in 2010 and may rise another 7% to 8% this year.
The 389-unit apartment tower at 215 W. Washington St., which opened in April, is more than 74% leased, ahead of a projected 71%, says Jerry Ong, a principal at Jupiter Realty Corp., its Chicago-based developer.
“Our partners are happy, our lenders are happy,” he says.
Other property types are turning around, too, although their recovery is fragile. Downtown and suburban office vacancies have fallen the last two quarters, while local retail vacancies have fallen for three quarters and local industrial vacancies have fallen two out of the last three.
Developers in most sectors won't get busy again until leasing fundamentals improve further, but the apartment market already is strong enough that as many as six downtown projects comprising more than 2,000 units could get under way this year.
Fear has not disappeared, however. Some observers worry about another wave of loan defaults in the next few years as a big batch of loans made during the boom come due and borrowers struggle to refinance them. Nationally, Foresight Analytics estimates that as much as half the loans maturing from 2011 to 2015 exceed the value of the property secured by them.
Others say the risks are overblown, comparing them to widespread predictions of computer meltdowns because of the 1999-2000 date change. “We've been calling for some time this ‘tsunami' of debt maturities Y2K,” Wrightwood's Mr. Cohen says.