Search
 

Deals Move On But The Risks Remain

Deals are going forward but underwriting needs to give consideration to the macro risks

By Joel Ross | Updated on January 14, 2013

It seems that many people in our business have determined to just ignore Washington and much of the rest of the world, and just assume all will be OK and we should just move on. Maybe that will be OK, but more likely not. Others feel politics has nothing to do with us and I should ignore that aspect. I believe Washington and politics and the world at large will determine the future success of our business and the ability to obtain well priced leverage, the level of cap rates, and the ability to get investors to move ahead.

It is pretty likely that interest rates will begin to move up from here. Slowly, but inexorably. It is also almost certain that there will be no good resolution to the fiscal mess the US is in. Neither Obama nor the leading Democrats seem to have any real interest to tackle the deficit or entitlement reform. They say pretty clearly they think it is all about raising taxes even further, and Obama clearly has no intention to sit with the Republicans and negotiate a grand bargain. This does not seem to be a negotiating position, but it appears they really believe there is no need to reform entitlements and that they can just limit deductions on top of raising rates. Boehner has stated he refuses to continue to talk to Obama. Harry Reid proved he is unable to even work with McConnell. That is really disappointing as that is how deals always got done in Congress.  The leaders sat down and worked it out. The president got directly involved and acted like a leader. We have none of that now.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.