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Capital Consortium: Lowering the Barriers for the CMBS Market 

At the height of the 1992 real estate capital crunch, the Real Estate Roundtable at Harvard University formed an offshoot, the Capital Consortium, to aid the development of a broader based commercial mortgage backed securities (CMBS) market. The Capital Consortium

Real Estate's Performance Over Time 

The risk and reward profile of an investment differs significantly by asset category. Research performed by Ibbotson Associates indicates that the overall rate of return varied widely among different investment categories between 1975 and 1995. During this period, large company

U.S. Real Estate Titans Merge With Global Partners 

In reaction to the ever shrinking marketplace and the globalization of the U.S. economy, the commercial real estate industry has rushed to increase its international presence. Over the past two years, several real estate titans have teamed with foreign real

Taking Steps toward REIT Reform 

Although the performance of real estate investment trusts (REITs) has been stellar in the past several years, the tax code governing REITs is long overdue for an overhaul. In fact, the last substantive change in the tax code involving REITs

Life Insurance Companies Reposition to Increase Market Share 

Over the past five years, life insurance companies have lost ground in both the equity and debt commercial real estate markets. Competition from commercial mortgage backed securities has slowed life companies' mortgage originations, and because real estate investment trusts dramatically

Legislative and Regulatory Outlook 

Now that President Clinton has been re elected and the Republicans have managed to hold on to Congress, it is time to examine the legislative and regulatory landscape for commercial real estate in 1997. Precisely handicapping future legislative activity is

Office Construction Lending: Proceed with Caution 

The dramatic improvement of the office market during 1994 and 1995 has beenthe subject of much discussion in the real estate investment community.Attesting to its recovery was the decrease in the national office vacancyrate from 19.4 percent in 1993 to

Pension Funds Compete with REITs and CMBS for Market Share 

After being stung by the severe real estate downturn during the early 1990s, pension funds gradually have increased their investment in institutional real estate. But other players, primarily real estate investment trusts, continue to gain on pension funds. Pension funds

CMBS Market Developments 

The emergence of the commercial mortgage backed securities (CMBS) market during the 1990s is rapidly changing how commercial real estate is financed. The CMBS issuance activity level has experienced nearly a ninefold increase from $5 billion in 1990 to $44

Clouds Are on the Horizon of the Retail Market 

The improved economy has allowed the national retail market to improve steadily over the past several years. The vacancy rate declined from 10.5 percent in 1992 to 8.1 percent in 1995. In addition, effective lease rates increased by 2.9 percent

CMBS Slowdown Restores Financial Market Balance 

After issuing a record $78 billion in commercial mortgage backed securities in 1998, the CMBS market is expected to end this year well below that mark, at between $60 billion and $65 billion. Three factors are responsible for the market's

CMBS Market Turmoil Opens Door for Commercial Banks 

Tumultuous world financial markets sent the commercial mortgage backed securities market into a tailspin in September and October 1998. Spreads for AAA rated CMBS to 10 year Treasuries spiked to 200 basis points in October from less than 100 basis

Capital Gains: It's a Brave New World 

The good news about the capital gains tax cut is that every property will experience a lower capital gains tax rate. The bad news is that the effective capital gains tax rate could vary by up to almost 5 percentage

Foreign Investment Tide Shifts 

As Asian investors continue to divest of U.S. real estate, Canadian and European interests quietly have increased their U.S. holdings, gradually offsetting the sharp decline in Asian investment. According to the Labor Department’s Bureau of Economic Analysis, direct foreign investment

CPI Reforms Could Affect Commercial Real Estate 

In December 1996, a Senate Finance Committee appointed commission of economists suggested that the U.S. Consumer Price Index (CPI) overstates cost of living increases by about 1.1 percentage points annually. The CPI currently is rising at an annual rate of

How Electric Industry Restructuring Could Affect Your Business 

Along with the telecommunications and natural gas industries restructuring, electric utility restructuring will bring dramatic changes in the way electricity is bought and sold. The $210 billion a year electric utility industry is one the nation's largest, most vital industrial

Insurance Companies Cut Direct Real Estate Assets 

With the start of Prudential Insurance Company's three year divestiture plan for its $5.6 billion real estate portfolio, life insurance companies' quiet disposition of real estate over the past several years has dramatically accelerated. Prudential, however, does not plan to

FDIC Raises Concerns about Construction and Real Estate Lending 

The rapidly escalating construction and real estate lending volume by commercial banks has not gone unnoticed by the Federal Deposit Insurance Corp. (FDIC). The FDIC, which is responsible for insuring deposits at the nation’s 11,191 banks and savings associations in

Life Companies Seek Survival in Commercial Finance 

The explosion in the issuance of real estate investment trusts (REITs) and commercial mortgage backed securities (CMBS) since the early 1990s has many people questioning the future of life insurance companies in the commercial real estate mortgage industry. With total

Get Ready for the Euro 

With the implementation of the Economic and Monetary Union (EMU) on January 1, 1999, Europe will enter a new monetary era, when the currencies of 11 European nations permanently will be pegged to the new euro. The charter nations are

FASIT: A Potential New Source for Commercial Real Estate Finance 

In March 1996, the commercial mortgage backed securities (CMBS) market reached a new milestone $100 billion in total issuance. The viability of the CMBS market has demonstrated investor willingness to invest in relatively new forms of asset backed securities on

The Incredible Shrinking Office 

The advancement of computer and telecommunications technology has been the catalyst for the rapid evolution of the office environment. As many companies go through the re engineering process, the reduction of office space helps to improve the bottom line. Even

Greater Liquidity for Private Commingled Equity Funds 

The emergence of real estate investment trust (REIT) initial public offerings (IPOs) helped to sustain the investment real estate market through the credit crunch of the early 1990s. A major factor behind the success of the REIT market was the

Foreign Investment in U.S. Is Looking Up 

With commercial real estate market conditions improving dramatically over the past three years, foreign investment interest in the United States has increased steadily. Surging lease rates, strong employment conditions, a robust economy, and low interest rates have made U.S. real

Value Retailing Puts the Squeeze on Regional Shopping Centers 

Although retail market indicators and retail sales have improved steadily in the past several years, many underlying conditions could dampen the retail market's prospects for continued improvement. In the majority of regions, retail market conditions are solid. Paradoxically, the performance