Hong Kong Developer Confident

China's Q4 GDP growth was 7.7%-the slowest growth in 14 years,although more than the expected 7.2%.Nonetheless,Citigroup remains bullish on China.The Chinese New Year is generally when shares rally.It is on January 31 this year.*
I think the property market will continue to be strong,said Irene Lee of Hysan Development Company Limited in Hong Kong.We will not stop enhancing our properties.We will not stop making sure that every single building is updated and enhanced.
We are very confident in Causeway Bay.We are very resilient.We will continue to look at opportunities.At Causeway Bay,we make sure we have diverse offerings and are focusing on our locals as well as visitors.*
Listed on the Hong Kong Stock Exchange and having a US ADR programme,Hysan says it is a leading property investment,management and development company.It has an investment property portfolio of over four million sqaure feet of high quality office,retail and residential space,and is the largest commercial landlord in Causeway Bay,a vibrant 24-hour district of Hong Kong.
Typical of Hysan's projects is the landmark Hysan Place tower,which is a mixed use,LEED-certified building with 15 levels of office space and 17 of retail.Located at 500 Hennessy Road,it is directly linked to public transport.*
Hysan is a member of the Dow Jones Sustainability Indexes;the FTSE4Good Index and Hang Seng Corporate Sustainability Index.The company minimises impact to the environment by emphasising energy efficiency;indoor environmental quality;and waste management across its portfolio of buildings.
Hysan also owns and manages some 1200 car parks.*
Hysan Development Co Ltd(OTN:HYSNF)

Commercial Real Estate Trends

We're seeing technology change how we do business and real estate is used,said Richard LeFrak of The LeFrak Organization.We're seeing clicks taking the place of bricks.It turns the shopping center more into entertainment and less retail activity.You have to be a little cautious about it-whether,in the long term,they're still gonna be in business.
Tech isn't a bad thing;it's just intruded in the business.It has disrupted the real estate business a little bit.The placement of columns and the power grid have to be rethought now.The traditional model may not apply.
In the Northeast,multifamily residential has very strong demand.Occupancy rates and rentals are going up.
If the Empire State Building goes public,its shares will have an emotional premium.It's an iconic building that symbolises New York.The ESB has been in the families of some of the current owners for a long time.They have an emotional attachment to it.
Miami has had a tremendous resurgence in a very short period of time,confounding the pundits.It's Latin American money and conversions to rentals.The inventory in general is pretty low.They are all-cash buyers now.There is very little new product.Miami is a young place,an exotic city in a first world country,international in character.
The LeFrak Organization owns an extensive portfolio of real property in New York,Los Angeles and London,concentrated in residential and office,but with significant hotel and retail assets as well.It develops and builds the majority of its own portfolio.Founded in 1901,the company also owns oil and gas properties.

Commercial Real Estate Consultancy Jobs

CoStar Group,the number one provider of research and analytics to the commercial real estate industry,has extensive opportunities available in several areas of its consulting business,specifically in
Research
Sales
IT
CoStar offers you comprehensive training,generous benefits and great perks in downtown D.C.
Help clients find,market and analyze property,optimizing the performance and maximizing the returns of their commercial real estate portfolios.For more information,visit costar.com/careers
CoStar:Innovate,Learn,Grow.

Advantage View:The Outlook For Commercial Real Estate

Commercial real estate investment trusts have done very well the past year.Brian Stutland of Stutland Volatility Group thinks they continue to do well.
Although rising long term yields may challenge commercial REITs,foreign investors may help boost commercial real estate.Watch the yield on the 30 year Treasury bond.
The commercial real estate supply is starting to come off the market,pushing prices higher.That would tend to favor commercial REITs such as Boston Properties and Brookfield Office Properties.
Stutland Volatility Group creates wealth by capitalizing on market volatility,using options to control risk and grow assets.It is based in Chicago.
Boston Properties(BXP),Brookfield Office Properties(BPO)

CoStar Research Jobs

CoStar Group,a NASDAQ-listed company,is hiring Research Associates and Research Managers for their state of the art Washington,D.C. headquarters.They need enthusiastic,customer-focused people for their dynamic,fast-paced industry.
CoStar is the #1 commercial real estate information company,producing and maintaining the largest and most comprehensive database of commercial real estate information.They also analyze and forecast commercial real estate markets.
CoStar offers base pay plus performance compensation;extensive paid training;company subsidized health benefits;and a 401(k) with company match.For more information,visit COSTAR.COM/CAREERS
CoStar Group(CGSP)

Re-purposed Real Estate Sees Demand

Real estate magnate Anthony Malkin is seeing a real demand for re-purposed properties.Mr.Malkin,President of Malkin Properties and Malkin Holdings,says that their Empire State Building,for instance,is the leader in energy efficiency.Being targeted for LEED-certification and to be an Energy Star showplace,it has been upgraded to serve the needs of the discerning and conscientious business while remaining a tourist mecca.
Our portfolio is leasing from the low 40s to the high 50s.They are all pre-war buildings with new hallways,lobbies and baths.Buyers are finding our offering very appealing.
You're probably 20-30% below peak rents today.By mid-2010,life insurance companies and banks were more willing to lend.Collateralized mortgage-backed securities are back now,the Harvard-educated Mr.Malkin noted.
The Malkin family has been active in real estate acquisition,management,construction and marketing for four generations.Mr.Malkin's father,Peter Malkin,is Chairman of the family businesses.

Rental Apartments Reveal Facts

Richard LeFrak,head of The LeFrak Organization,a major developer,says he deals with consumers at an interesting level.In certain markets,there's an increased demand for rental apartments.It means the sale business has been tainted,but it also means people are able to deal with their necessities.
Mr.LeFrak thinks there's some recognition by the government that the flailing of the past 18 months didn't achieve what they wanted to achieve.This coming election is gonna have to do with people's attitude about the future:optimism or pessimism.Hiring follows optimism.We'll have to see what November brings.
The LeFrak Organization,which is privately held,was founded by Mr.LeFrak's grandfather,Harry,in 1901.Besides large scale residential and commercial real estate development and management in New York,Los Angeles and London,it holds onshore energy assets and a securities portfolio.

Commercial Real Estate Today

Commercial real estate magnate Sam Zell observes that there's a lot of activity going on.Eventually all that space will get filled.In apartments,they're getting very successful numbers,very rapidly getting back to the figures of 2007.There's a lot of demand for office space,but at 20-30% less than peak rates.It has to fill first.A lot of tenants want to lower square footage per employee.There's opportunity there to get much more efficient.Each segment of the commercial real estate market has to be viewed separately.
Equity International,part of Equity Group Investments,Mr.Zell's holding company,is investing in Brazil.Brazil is self-sufficient,growing,and has solved inflation.It's likely to be one of the fastest growing countries in the world over the next 5-10 years.The country as a whole has about 8% debt compared to 70% in the U.S.EGI's investment philosophy in the emerging markets is about that whole aspirational population and how they're gonna get serviced.
China's a more difficult environment to work in than Brazil.There can be very strict government control there,conforming to a goal they're trying to achieve.
In the U.S.,we're still soft on the demand side.There's a lot of obsolescent real estate,such as anchorless centers-most of them are dying-or office centers in ex-urbia.The issue in the U.S. today continues to be confidence and the unpredictability of the administration.The health care bill is a huge economic time bomb for this country,and it's gonna have to be modified,in Sam Zell's opinion.
Mr.Zell is Chairman of Equity Group Investments,the multi-billion dollar,diversified holding company which he co-founded in 1968.It is based in Chicago.

Greenspan Grapples With Crisis

Alan Greenspan,former Federal Reserve Chairman,clearly has continued to wrestle with financial issues,if his recent comments are any guide.The stock market is not merely an indicator,he points out;it's a cause of economic activity.The data show that most people do not distinguish between paycheck income and their 401k appreciation.And upper income persons account for 45% of personal income expenditure.
Because of this effect,an underperforming stock market tends to crimp the consumer spending so vital to economic health,it has been observed.
The problem is,industrial production rose fairly steadily until the last week in May,and then it stopped dead.There is a normal pause in economic recoveries,but we are coming out of the greatest global economic crisis the world has ever seen.This recovery has continued to be dominated by large banks and big business.The small banks are loaded up with commercial real estate loans-the worst possible loans-so they aren't lending.
The problem in job growth is the extraordinary growth in productivity.It's still showing growth at a tremendous pace.This is much too much.There is surely a short term fear factor.The average hourly work week has been going up.
As long as that is the case,companies won't be hiring many new workers.It means they're just piling more work on the existing staff.
A big regulatory response to the financial crisis is appropriate,but you have to depend on the owners and managers to protect their equity.There is nothing that beats counterparty surveillance.A small little group of government auditors can't do much of any significance,in Mr.Greenspan's opinion.
Alan Greenspan continues to serve the nation long after he left office by applying his intellect to the current situation,clarifying it,or at least stimulating discussion with his comments.

Old Firm,New Executive

Hartford Financial Services Group is 200 years old.Its new CEO is Liam McGee,who thinks that what the European Union and European Central Bank did to help Greece was thoroughly appropriate.Hartford's balance sheet has enough capital to withstand any reasonable stress scenario.They are seeing good top line momentum in both their consumer and commercial businesses.
It is fairly clear we are beginning to see growth,but it will be at a slow pace.Hartford has largely moved on from lower tranche investments.They're selling that lower tranche commercial real estate.Hartford's portfolio is now oriented to high grade commercial debt,Mr.McGee indicated.
As of the close of trading last Friday,Hartford was paying a dividend of 0.20 a share,for a yield of about 0.80%.The stock was up 0.91 last week and had a price to earnings ratio of 9,with a closing price of 26.21.
Hartford Financial Services Group(HIG)

CNBC Regular May Run

Don Peebles,a real estate magnate who is a frequent guest on CNBC,is apparently contemplating running for mayor of Washington,D.C.,where he was born and served as a Congressional page in the 1970s,beginning a lifelong interest in government.Mr.Peebles,a regular on the "Squawk On The Street" early morning broadcast,is reportedly consulting with media and campaign advisors to assess his chances of unseating incumbent Adrian Fenty,who has come to be seen as aloof and divisive by many.Mr.Peebles has a home in the Cleveland Park neighborhood of the District,commuting between there and Miami,Florida,where his main business interests are located.Married and the father of two,Mr.Peebles,who is 50 years old, began his career in the real estate appraisal line,eventually serving on the District's tax appeals board under controversial Mayor Marion Barry,who continues to serve on the city council.
By 1986,Don Peebles had gone into commercial real estate development in the District,moving on to Florida when he came under intense criticism for cronyism with regard to a 48 million dollar deal he entered into with the Barry administration.He gravitated to city government in Miami Beach as well,jointly developing oceanfront and luxury property there with the municipality.
The primary election is on September 14.Mr.Peebles says he is prepared to spend 8 million of his own money on his prospective candidacy.He is believed to be worth around 350 million dollars.Mr.Peebles was a supporter of the Obama presidential campaign,which he discussed on his CNBC appearances.

What BlackRock Sees

The tone of regulators in the U.S. and Europe is pretty consistent:a more secure banking system with more capital,according to Laurence Fink,CEO of BlackRock,the world's largest money manager.In Europe,they're talking about Basel III,with lots of capital,and it's similar in the U.S.Most certainly banks are more reluctant to lend, because they're not certain about capital requirements in the future.Corporations are not hiring;not building factories;and not buying equipment.Huge pools of money are sitting in banks and corporations.This is the problem we're seeing today in our economy.They're seeing what the new regulations will be.
BlackRock is seeing increased appetite for mutual funds and exchange-traded funds.We're seeing renewed interest in equities,as opposed to fixed income.We're not concerned about our competition at all,Mr.Fink insisted.The etf market needs a lot of liquidity and research.It is our belief the etf market will continue to grow from both institutions and individual investors.
There's a healing in commercial real estate going on,Mr.Fink believes,but not fast enough.He's not terribly worried about it,although some of the regional banks will be destabilized.The Federal Reserve is aware of this.
Mr.Fink is one of the more forthright executives in the financial industry.His colleague at BlackRock,Bob Doll,follows the same path of openness.

Commercial Real Estate Outlook

The recovery of the commercial real estate market is years away,according to magnate Sam Zell,Chairman of Equity Group Investments.We haven't had a major commercial real estate asset committed since July of 2007,Mr.Zell says,and it will be another 12-36 months before that happens again.I don't think normalization will provide equity to the current owners.The bottom line is,there's more debt than value.You're not gonna get anything if you do sell,Mr.Zell pointed out.
In his own case,Mr.Zell sold Equity Office for 39 billion dollars in 2007,at the top of the market.Somebody made him a Godfather offer,he jokes,and when you're not buying,you're selling.
I don't believe commercial real estate is the next leg down,Mr.Zell stated.The kind of real estate that regional banks loaned against was smaller,local-not institutional.Condominiums do not qualify as institutional real estate,Sam Zell indicated.Some observers have been warning that commercial real estate will likely cause a double dip recession when owners fail to get the refinancing they need as their loans come due.

Commercial Real Estate Check

The CEO of Vornado Realty Trust,Steven Roth,has been analyzing the sector's prospects.After a vicious,very sharp downdraft,Mr.Roth says,we are in the process of seeking a bottom.That will take 3-5 years.There's no doubt that commercial real estate has re-priced lower.Brokers and tenants now feel that we're in a bottom.We want two-year leases;tenants want long term.This is the traditional sign of a bottom.
The last cycle,in the 1990s,lasted 10 years peak-to-peak.From 1988-91,there was a vicious downdraft.We're exactly on track with the historic 90's cycle.That downdraft lasted three years,with re-equitizing and base-building for the next 3-6 years.That's the best time to do acquisitions and load up on capital,which is what Vornado is doing now,Mr.Roth pointed out.
The government's TALF program is going to finance the AAA portion of a real estate loan.By historical standards,that's a fairly low amount.Vornado is in the TALF queue for refinancing.It's a very slow process,Mr.Roth observed.

Commercial Real Estate Needy

Dan Tischman,whose businesses are involved in construction,hospitality and realty,says it's refreshing the government is getting concerned about commercial real estate.The roll-over is going to have to be refinanced,and the capacity just isn't there.The Term Asset-backed securities Loan Facility,or TALF,needs to be extended.The total outstanding is 3.4 trillion dollars,while in a good year there was only about 40 billion available for lending.
Overall,Mr.Tischman observed,it's still a good time to build because of lower costs.Real estate investment trusts are actually doing quite well.Most of the major REITs have done money-raising to meet their obligations.I suspect there was a bubble of values created by an over-eagerness of lending.We're certainly not gonna see the values come back in a year or two or three,Mr.Tischman feels.

Philly Fed Chief Reflects

Charles Plosser,President and CEO of the Federal Reserve Bank of Philadelphia,has been analyzing the problems in the economy.Our survey in Philadelphia shows manufacturers are more optimistic,Mr.Plosser said.Unemployment is clearly the big problem.The other issue that we're waiting to worry about is commercial real estate.The exit strategy for the Federal Reserve is quite simple:we have to shrink our balance sheet,or we could be setting the fires of inflation in the next year or two.Monetary policy works with some fairly long lags,and that means we have to look toward the future,making some politically undesirable decisions,Mr.Plosser observed.
Credit is not flowing at the easy rate it was a few years ago.That's gonna take some time.It's a balancing act between the demand for credit,and the supply of credit.In 2010,we will see the economy gaining traction,but there are still some risks out there,such as commercial real estate-also with fiscal policy.
We've had a very massive shock to this economy.The idea it's going back to where it was before is probably not true.There will perhaps not be the strong rebound we sometimes see after a recession,Mr.Plosser suggested.He was formerly an economics professor at the University of Rochester and a visiting scholar at the Bank of England.

Early Edition:Ivanka Trump Assesses Situation

Ivanka Trump of The Trump Organization says she isn't totally sure the recent stock market gains are based on fundamentals.I just don't know how to believe this is a V-shaped recovery,as opposed to a W.Commercial real estate hasn't really entered the system yet.I have a feeling that we're going to be coming out of this very slowly.Our consumers are still coming,but people are much more tentative in real estate and jewelry.We launched our jewelry line two years ago,Ms.Trump noted,wearing some costume earrings from the collection.
A massive deleveraging has to occur in commercial real estate,Ms.Trump believes.There has to somehow be a rationalization of that system.When people aren't hiring,they don't need office space.There's much more vacancy in the New York midtown core.Bankers are starting to call again to solicit business,but nobody's making substantial or reasonable loans,Ivanka Trump observed.A willowy blond,Ms.Trump has appeared with her father Donald on The Apprentice reality T.V. show.

Starwood Likes TALF Prospects

Barry Sternlicht,Chairman and CEO of Starwood Capital,says he thinks everyone's pretty optimistic about Commercial Mortgage-Backed Securities,or CMBS,in the TALF program.I think we're closer to the bottom of the residential side,Mr.Sternlicht observed,so now we can focus on the commercial side.The commercial real estate market is gonna lag the economy.Companies are gonna have to be confident before they get back in.This recovery is gonna be longer,deeper and broader than the Resolution Trust Corporation cycle of the 1980s.There still isn't any debt,Mr.Sternlicht noted,though TALF will encourage some lending.
When we buy land,we're doing it unleveraged,Mr.Sternlicht revealed.We're buying debt in property.There's one in Las Vegas we're looking at,and something in Brazil right now.You've got to be patient.The bid-ask spreads are huge,Mr.Sternlicht feels.

The End or Beginning

The cost of credit has started to ease,Mr.Geithner informed the U.S. Senate.Businesses are finding it easier to raise money in the capital markets.This is all welcome news,but I want to emphasize this is just the beginning.We still face a prolonged repair and adjustment.The combined effect of the programs will help.We're working very closely with the Small Business Administration.Refinancing of commercial real estate is a major challenge.The best thing we can do is 1.provide capital where it is necessary;and 2.have the Federal Reserve extend lending to Commercial Mortgage-Backed Securities,or CMBS.These are two very important steps to take.
About half the AIG risk has been taken down.To be fair,the management of this firm is finding it incredibly difficult to disentangle the businesses.Our options were substantially constrained by the complexities of this firm,Tim Geithner pointed out.Wearing a charcoal suit,white shirt and blue striped tie,the Treasury Secretary maintained his composure and seriousness through the intense exchanges with the demanding senators.

How Things Have Changed

Concern about systemic risk has started to diminish,Mr.Geithner told the Senate Banking Committee,and there are signs that credit conditions have improved,but we still have a long way to go.The economy is still shrinking;the system is still damaged.We're gonna do no more than what it takes to fix the system.Leverage has declined;banks are funding themselves more conservatively.The vast majority of banks have more than enough to be well-capitalized.Restoring lending in the commercial real estate market is critical.Treasury will pick fund managers for the Public-Private Investment Partnership,or PPIP,in the next several weeks.Treasury still has 123.7 billion in Troubled Asset Recovery Program,or TARP, funds available.