So, Bin Laden was not on the CRE Cliffnotes distribution list (he did not have internet in his compound, nor do I believe he had any interest in non-cave/”hidden compound” related real estate). There are however, so many questions I have regarding his recent “retirement” and the incredible troops that carried out the mission. To name just a few:
+ Given the decision to bury Osama Bin Laden at sea, could we have at least set up to a dunk tank?
+ Where can I get a SEAL war dog, is it true that they really have “Kanye teeth”, and will my lovely wife let me have one (a SEAL dog, not the teeth)?
+ Was finding the secret Osama compound any easier than finding the “top secret” Houston Exxon Mobile Campus on Google maps?
All kidding aside, I am thankful beyond words for our heroes who carried out the mission and appreciate all our men and women overseas…and their moms.
Let the Office Recovery Begin
+ Link
+ Two Sentence Overview: Friday’s job report was positive showing 244,000 jobs added in April (With an average of 233,000 in each of the last three months). New demand combined with a general lack of new supply should help tighten office markets and help support rent growth in the Gateway and Secondary markets.
+ One Sentence Takeaway: We should all cheer that 1Q 2011 brought the first US vacancy improvement in 4 years, but bear in mind we have a long way to go on the demand side -- If we averaged 233,000 jobs a month from here on out, we would get to pre-recession job levels sometime in mid-2013.
Houston Props
+ Link
+ Two Sentence Overview: Houston has been getting a lot of great publicity lately – and for good reason. Houston is in the top 3 in the US for fortune 500 HQ’s (beating my old home of LA), Fast Company’s City of the year, in top 5 for gross metropolitan product in the US, was the LIFO (last in first out) to the recession party, and finally its state just won the best state for business for the seventh year straight (which may have something to do with a Governor who will send letters to California to get businesses to migrate).
+ One Sentence Takeaway: I may be a little biased, but isn’t it time we officially call Houston a Gateway Market?
Chevron is thinking of paying what?
+ Link
+ Two Sentence Overview: While not confirmed, the WSJ reported that Chevron is considering buying the former Enron HQ for a hefty sum of $380 million. This $309 PSF figure would set a new benchmark in Houston after Brookfield’s bought Heritage Plaza at the end of 2010 for approximately $280 PSF.
+ One Sentence Takeaway: “Trash or Trophies” baby … and the trades that have occurred in late 2010 and early 2011 all point to the pent up demand for the well leased Class A buildings causing some low cap rates and high price tags for the trophy properties in top markets.
Foreign Dough
+ Link
+ Two Sentence Overview: Foreign investment in US Real Estate doubled in 2010 (13.37 billion in ’10 from $5.6 billion in ’09) and this is only the beginning. Investors outside the US (to include sovereign wealth funds) have their eye on US CRE primarily because of its fundamentals with a minimal amount of new supply and rental rates that are trending upwards.
+ One Sentence Takeaway: Initially these foreign buyers were looking at the Gateway Markets, but this foreign cash should begin to find its way into secondary and tertiary markets by year’s end.
Upsurge in Property Sales
+ Link
+ Two Sentence Overview: As indicated in the articles above, office property sales have come on strong in the 1Q of 1011 with investors who are beginning to look for more value. Velocity of sales for assets with minor leasing exposure is beginning to pick up.
+ One Sentence Takeaway: While demand for the Class A properties in gateway markets remains high, maybe this is the beginning of the end to the “barbell effect” as more distress comes on the market, the discount for distress starts to gradually narrow, and the demand for more value add properties picks up.
Thanks for reading. Hope all the moms had a very happy mother’s day and hope you have a great week.
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