As we ring in the New Year, it’s a good time to reflect back before we move forward. Here are a few key issues that may come into play this year:
Loans Coming Due:
The biggest item to watch this year is the coming due dates of the numerous five year loans from 2007. Will extend and pretend finally stop? Will this be the beginning of the transfer of assets that everyone has been waiting for? $55Bil in commercial mortgage backed securities (CMBS) alone are coming due this year. This may serve as a huge opportunity for buyers or perhaps lenders will choose to just kick the can down the road yet again. We should have some indications of which direction things are heading in by mid Q1.
Europe:
It’s not entirely clear what effect the crisis (es) in Europe will have on US commercial real estate. Hard assets like gold continue to be a popular hedge to risk in our volatile currency and interest rate environment. It’s likely that investment real estate, with credit tenants, will continue to be an attractive place for people to allocate capital.
FASB Leasing Changes:
A new FASB (financial accounting standers board) exposure draft will be reissued this year after the pushback of its previous one in 2009. The new draft should include some clarity to the commercial real estate world as to precisely what the new accounting regime will look like. Exposure drafts relating to fair market value accounting for REITs (amongst others) are on the table as well.
Regardless of what 2012 brings in the way of resolution to the above, we wish each of our readers and friends at GlobeSt a happy and prosperous new year!
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
