Dia Sies.
More interesting topics were discussed in class today.
There are non-judicial foreclosures in Texas.
A hearing by a judge is not necessary to proceed with the foreclosure process in Texas.
Deed of Trust- effectively officiates in case a tenant stops making payments.
Workouts- the Lender decides to work out a deal with a troubled tenant’s ability to service debt.
The lender may lower payments and push back the principal payments.
The lender may also get shared appreciation for a property if it is sold.
New foreclosure notices need to drop, not just stay at around at their near-record highs. Banks do not want to be homeowners, and they do not want spend cash for repair and maintenance services. Banks hold on to foreclosure inventory, but in a few cities, they're getting a big incentive to let it go. According to an article discussed in class, L.A. last week passed a new city ordinance that fines banks, servicers, whoever owns the foreclosed property, up to $100,000 for letting the property fall into disrepair. There are many run-down, stripped homes with overgrown lawns that are examples of what is not recovering in the housing market. .
"There is a commercial real estate crisis on the horizon, and there are no easy solutions to the risks commercial real estate may pose to the financial system and the public," says a report issued by the Congressional Oversight Panel.
But in a sign of the government's unpreparedness, Warren notes that last year's stress tests were overly limited. The largest loan losses are projected for 2011 and beyond, but the stress tests conducted on big Wall Street banks last year examined their stability only through 2010."
Some banks have a special technique for dealing with business borrowers who can't repay loans coming due. The banks give them more time, hoping things improve and they can repay later. Banks believe this is a wise strategy, but we have learned in class this is simply called "extend and pretend." Banks are simply prolonging the inevitable by doing this.
The following example was discussed. In Atlanta, Georgian Bank lent $13.5 million to a company in late 2007, some of it to buy land for a 53-story luxury Mandarin Oriental hotel and condo development. The loan came due in November 2008, but the bank extended its maturity date by a year. The bank extended it again to May 2010, with an option for a further extension to November 2010, according to court documents.
Atlanta has more loans in special servicing than any other city and it is yet another sign the region is a poster child for risky real estate deals. The No. 1 issue is that values have fallen as vacancy has risen. The average loan to value was up to 80 percent. When many owners didn’t put a lot of equity into their deals, there wasn’t much of a margin for error. Many borrowers will be unable to get refinancing without injecting a large amount of equity. And, many are going to be unwilling to infuse equity into a loan that is already under water.
Thursday, July 15, 2010
Thursday, July 8, 2010
July 8, 2010 - Hospitality Markets / Travel / Resorts / International Property Markets Trends and Issues
Dia Cinco.
One reason the hospitality industry has weakened is due to families scaling back on destination trips which would require hotel lodging. Families are cutting down on expenses during this weak economy. Hotels revenues have also weakened due to new technologies that allow business meetings over the internet in lieu of having face to face meetings at hotel conference rooms. This technology helps companies reduce traveling expenses which effectively allow savings on operating costs. Technology such as webinars and teleconferences are alternatives to face to face meetings and they reduce a company’s traveling expenses significantly. In addition, business team members that are located in different parts of the country may monitor real time progress of development projects via live web video feeds.
It is important for hotels to discover new ways for generating revenue. Some ideas shared in class were that hotels should provide the following: dry cleaning service, restaurants, selling toiletries, new release movies, late night eatery, etc. Providing these simple items may help attract clients. However, I believe Wi-Fi internet should be free at hotels. I stayed at the Marriot Renaissance hotel recently and I was disturbed to find out there was a $12 dollar internet access fee per day, so I used my cell phone to access the internet instead.
Hospitality businesses are suffering from the damage the Gulf Coast oil spill. Most of the people lodging at hotels are the environmental cleanup crews. The environmental crews are primarily in the Gulf Coast to work, so they are not spending money on entertainment attractions like tourists would.
Real estate property values in China are increasing and there is belief by some experts that it is headed toward a real estate bubble.
Latin America scores low in transparency according to John Lang LaSalle. This is essentially due to Latin American markets not having market performance data. However, this is changing since Brazil just two years ago enacted in indexes market.
One reason the hospitality industry has weakened is due to families scaling back on destination trips which would require hotel lodging. Families are cutting down on expenses during this weak economy. Hotels revenues have also weakened due to new technologies that allow business meetings over the internet in lieu of having face to face meetings at hotel conference rooms. This technology helps companies reduce traveling expenses which effectively allow savings on operating costs. Technology such as webinars and teleconferences are alternatives to face to face meetings and they reduce a company’s traveling expenses significantly. In addition, business team members that are located in different parts of the country may monitor real time progress of development projects via live web video feeds.
It is important for hotels to discover new ways for generating revenue. Some ideas shared in class were that hotels should provide the following: dry cleaning service, restaurants, selling toiletries, new release movies, late night eatery, etc. Providing these simple items may help attract clients. However, I believe Wi-Fi internet should be free at hotels. I stayed at the Marriot Renaissance hotel recently and I was disturbed to find out there was a $12 dollar internet access fee per day, so I used my cell phone to access the internet instead.
Hospitality businesses are suffering from the damage the Gulf Coast oil spill. Most of the people lodging at hotels are the environmental cleanup crews. The environmental crews are primarily in the Gulf Coast to work, so they are not spending money on entertainment attractions like tourists would.
Real estate property values in China are increasing and there is belief by some experts that it is headed toward a real estate bubble.
Latin America scores low in transparency according to John Lang LaSalle. This is essentially due to Latin American markets not having market performance data. However, this is changing since Brazil just two years ago enacted in indexes market.
Thursday, July 1, 2010
July 1, 2010 - Industrial Markets / Low-Income Housing / Taxes / Governmental Trends and Issues
Dia Cuatro...
In today's collaborated discussions we reviewed industrial markets, low income housing, taxes and governmental trends and issues.
An article discussed pertained to HUD community development block grants that are being awarded to the City of Dallas. Dallas is receiving millions in federal grant money for housing; however, Dallas is rejecting certain affordable housing development projects to limit the amount of affordable housing in downtown. Affordable housing developers are frustrated because they believe Dallas city hall is favoring a select number of developers which are building a mix of upscale developments with a minimum amount of affordable housing units. One developer in particular is very upset after losing millions of dollars due to their project not being awarded HUD funding which was required to make their project feasible. This developer believes Dallas officials are favoring upscale developments with minimum amount of affordable housing units for the downtown area. The article suggested that Dallas officials may want to portray an upscale scene for their downtown and this might be the reason why Dallas is rejecting development projects with a high count of affordable housing units in downtown.
Lack of diversity in communities was discussed and how it can affect its residents. A community needs diversity to provide a healthy environment to have a good level of interaction. Affordable housing is required for teachers, police men, fire fighters, nurses, cleaning and cooking personnel, etc.
We discussed if developers should be responsible for relocating others that are displaced from buying the low income land and building it up to be a nice place? The class consensus was yes, developers should have a responsibility to relocate these people. Relocation assistance should be required to move residents when a new development needs to be built.
The US is broke, so removing the capital gains tax of 15% and changing it to a 30% + tax rate is being proposed in order to generate more tax dollars. Hedge fund guys are making their money on trading funds whether it is hedge funds, real estate, etc. If real estate is taxed higher than liquid investments, why would you invest in real estate? Pension funds and other retirement funds invest indirectly and chasing really cheap real estate deals. If you take players out of the real estate market, you raise the cost of real estate financing. Congress can make this retroactive or not. Congress can back date this date a year or two. Real estate has been skewed by policy by transferring risk from individuals and corporations and lenders to society.
Restoring Neighborhoods
Developers diversify and improve neighborhoods. Gentrification is a good thing. However, the number one issue is that it will raise property taxes.
In order to generate more tax revenue, San Francisco city officials are imposing a commercial rent tax on San Francisco tenants. This rent tax will hurt small businesses and it may cause many tenants to leave San Francisco.
The U.S. government is a big commercial real estate player.
The GSA is an owner of large real estate such as courthouses, agencies, etc. In terms of employment, they are progressively the better ones to work for. They are market oriented and have savvy employees.
The average discount according to an USA today article is that you can buy a foreclosure for a discount of 30% than a non foreclosure property.
Cloud computing
A growing number of government entities are improving citizen engagement by using social networking tools to communicate with each other. I think this is a great idea.
In today's collaborated discussions we reviewed industrial markets, low income housing, taxes and governmental trends and issues.
An article discussed pertained to HUD community development block grants that are being awarded to the City of Dallas. Dallas is receiving millions in federal grant money for housing; however, Dallas is rejecting certain affordable housing development projects to limit the amount of affordable housing in downtown. Affordable housing developers are frustrated because they believe Dallas city hall is favoring a select number of developers which are building a mix of upscale developments with a minimum amount of affordable housing units. One developer in particular is very upset after losing millions of dollars due to their project not being awarded HUD funding which was required to make their project feasible. This developer believes Dallas officials are favoring upscale developments with minimum amount of affordable housing units for the downtown area. The article suggested that Dallas officials may want to portray an upscale scene for their downtown and this might be the reason why Dallas is rejecting development projects with a high count of affordable housing units in downtown.
Lack of diversity in communities was discussed and how it can affect its residents. A community needs diversity to provide a healthy environment to have a good level of interaction. Affordable housing is required for teachers, police men, fire fighters, nurses, cleaning and cooking personnel, etc.
We discussed if developers should be responsible for relocating others that are displaced from buying the low income land and building it up to be a nice place? The class consensus was yes, developers should have a responsibility to relocate these people. Relocation assistance should be required to move residents when a new development needs to be built.
The US is broke, so removing the capital gains tax of 15% and changing it to a 30% + tax rate is being proposed in order to generate more tax dollars. Hedge fund guys are making their money on trading funds whether it is hedge funds, real estate, etc. If real estate is taxed higher than liquid investments, why would you invest in real estate? Pension funds and other retirement funds invest indirectly and chasing really cheap real estate deals. If you take players out of the real estate market, you raise the cost of real estate financing. Congress can make this retroactive or not. Congress can back date this date a year or two. Real estate has been skewed by policy by transferring risk from individuals and corporations and lenders to society.
Restoring Neighborhoods
Developers diversify and improve neighborhoods. Gentrification is a good thing. However, the number one issue is that it will raise property taxes.
In order to generate more tax revenue, San Francisco city officials are imposing a commercial rent tax on San Francisco tenants. This rent tax will hurt small businesses and it may cause many tenants to leave San Francisco.
The U.S. government is a big commercial real estate player.
The GSA is an owner of large real estate such as courthouses, agencies, etc. In terms of employment, they are progressively the better ones to work for. They are market oriented and have savvy employees.
The average discount according to an USA today article is that you can buy a foreclosure for a discount of 30% than a non foreclosure property.
Cloud computing
A growing number of government entities are improving citizen engagement by using social networking tools to communicate with each other. I think this is a great idea.
June 24, 2010 - Retail Markets / Technology / WWW / Social Networking / Software Trends and Issues
Clase numero tres! Class number three!
Unfortunately, I had to miss class Thursday night due to a work project that needed to be submitted Friday morning. With such a short time frame to work on this particular project, my team and I worked all day and night on Thursday in order to complete an estimate for a multi-million dollar adaptive re-use project in downtown Dallas.
Unfortunately, I had to miss class Thursday night due to a work project that needed to be submitted Friday morning. With such a short time frame to work on this particular project, my team and I worked all day and night on Thursday in order to complete an estimate for a multi-million dollar adaptive re-use project in downtown Dallas.
June 17, 2010-Office Markets/Sustainability/Green Development Trends and Issues
Clase numero dos! Class number two!
Sustainability was the key topic for today’s class. According to an internet article, ways of living more sustainably can take many forms from reorganizing living conditions, reappraising economic sectors, or work practices, using science to develop new technologies, to adjustments in individual lifestyles that conserve natural resources.
The three E’s were introduced and they are the following: efficiency, effectiveness and equitable.
Peter Drucker quotes were discussed.
"Doing the right thing" represents effectiveness and leadership.
"Doing things right" represents efficiency and management.
Employee satisfaction and building layout efficiency were talked about. More buildings are being built or retrofitted with energy efficient windows, better hvac systems and water conservation products. In addition, employers are providing employees with ergonomically correct work stations with comfortable chairs.
Regional malls were the next topic. Regional malls seem to be losing their popularity. It may be more comfortable walking in a regional mall during bad weather; however, it is still losing some of its customer base to shopping town centers. An explanation for this might be because the demographics are changing and today’s customers seem to prefer walking outside from store to store in lieu of walking in one large conditioned building.
Another growing trend is LEED certification.
LEED measures the following: sustainable sites, water efficiency, energy & atmosphere, materials and resources, indoor environmental quality, locations and linkages, awareness & education, innovation in design and regional priority.
Companies are becoming aware of sustainable initiatives and more businesses want to do their part. From my building work experience more owners are requesting green elements in their new construction or adaptive re-use projects. Higher construction costs may be incurred upfront; however, energy costs savings in operating expenses are enjoyed during the life of the building. LEED certified buildings are becoming popular. LEED certification shows that a company cares about the environment, but it also uses its LEED certification as a great marketing tool.
The final discussion was regarding the United States government’s role in making the U.S. green. In new construction, a building’s energy ComChecks are submitted to the city for approval before the building is constructed. New construction must comply with the energy building codes in order to pass building inspections and achieve a certificate of occupancy.
Sustainability was the key topic for today’s class. According to an internet article, ways of living more sustainably can take many forms from reorganizing living conditions, reappraising economic sectors, or work practices, using science to develop new technologies, to adjustments in individual lifestyles that conserve natural resources.
The three E’s were introduced and they are the following: efficiency, effectiveness and equitable.
Peter Drucker quotes were discussed.
"Doing the right thing" represents effectiveness and leadership.
"Doing things right" represents efficiency and management.
Employee satisfaction and building layout efficiency were talked about. More buildings are being built or retrofitted with energy efficient windows, better hvac systems and water conservation products. In addition, employers are providing employees with ergonomically correct work stations with comfortable chairs.
Regional malls were the next topic. Regional malls seem to be losing their popularity. It may be more comfortable walking in a regional mall during bad weather; however, it is still losing some of its customer base to shopping town centers. An explanation for this might be because the demographics are changing and today’s customers seem to prefer walking outside from store to store in lieu of walking in one large conditioned building.
Another growing trend is LEED certification.
LEED measures the following: sustainable sites, water efficiency, energy & atmosphere, materials and resources, indoor environmental quality, locations and linkages, awareness & education, innovation in design and regional priority.
Companies are becoming aware of sustainable initiatives and more businesses want to do their part. From my building work experience more owners are requesting green elements in their new construction or adaptive re-use projects. Higher construction costs may be incurred upfront; however, energy costs savings in operating expenses are enjoyed during the life of the building. LEED certified buildings are becoming popular. LEED certification shows that a company cares about the environment, but it also uses its LEED certification as a great marketing tool.
The final discussion was regarding the United States government’s role in making the U.S. green. In new construction, a building’s energy ComChecks are submitted to the city for approval before the building is constructed. New construction must comply with the energy building codes in order to pass building inspections and achieve a certificate of occupancy.
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