CRE Cliffnotes (9.6.11)

Well, look at it this way….we didn’t lose any jobs in last week’s report.  I am a silver lining guy and we did have 4% growth in chain store sales and increased auto sales in spite of a hurricane shutting down most of the east coast.  I am stretching here aren’t I?

 Hope the following is a quick, helpful, and easy to read overview of some Commercial Real Estate stories from the past week:

 Remembering 9/11

ü  Link

ü  Two Sentence Overview:  This Sunday is the 10^th anniversary of the largest attack on US soil in our nation’s history in New York City, Washington DC, and Pennsylvania.  Incredible to recall all of the acts of heroism that occurred that very dark day. 

ü  One Sentence Takeaway:  This great interactive picture from the ground of the new development reminded me of the great honor and responsibility we have as real estate people to finance, develop, and operate buildings that are both symbolic and imperative to our great nation. 

Job Report:  “Disturbing”

ü  Link

ü  Two Sentence Overview:  For the first time in nearly a year we had no net increase in jobs.  Economists were looking for an increase of around 75K, but unemployment held steady at 9.1% with a bad consumer confidence report to boot. 

ü  One Sentence Takeaway:  The importance of job growth cannot be overstated for the nation in general and commercial real estate in particular – this report and all the surrounding data was disheartening. 

Zell’s take on US Real Estate

ü  Link

ü  Two Sentence Overview:  Some great takeaways from Zell as he cites that the volatility we are experiencing in the equity market is largely due to political uncertainty.  Specifically as it relates to buying opportunities in US real estate: low cost of capital and pretend and extend loans from lending institutions has led to fewer buying opportunities in the US and prices for fully occupied assets closing in on 2007 levels. 

ü  One Sentence Takeaway:  On the upside, Sam reminded us that Real Estate fundamentals are all about supply and demand – and in the US, we really have not added any significant supply since 2007. 

Time for Energy M&A?

ü  Link

ü  Two Sentence Overview:  Expect to see more and more oilfield service and equipment providers being bought.  This is something for us all to keep our eyes on with valuations becoming more feasible and seemingly more demand from the larger players.   

ü  One Sentence Takeaway:  Merger and acquisition activity is always a risk for Houston office space absorption and I would underwrite some considerable M&A activity this fall. 

Stats for the Water Cooler:

·         Texas added 688,483 people in the past year, the most of any other state in the nation (Stat)

·         August Consumer Confidence is lowest in 2 years. (Stat)

·         Oil finished the week down $1.45 to $84.05.  (Stat)

·         US Rig Count lost 7, down to 1,968 last week (up 315 from this time last year however) (Stat)

·         Houston is second only to Silicon Valley in year-over-year job growth in the nation with 2.6 % growth (Stat)

·         Retailers are finding shoppers where they live (Stat)

 Houston CRE News:

·         Litton Loan is Sold to Atlanta-based Ocwen for $263.6 million  (Link)

·         Houston adds 5,900 retail jobs (Link)

·         Community Bancorp, LLC signs lease at Williams Tower (Link)

·         Burns & McDonnell Expands at 1700 Younan West Loop (Link)