Having trouble putting money out, sustaining a decent yield? Who isn't? It's been a consistent theme too much capital chasing too little quality real estate product, and the smart money is holding onto stabilized, core product in the top-tier, 24-hour markets.
So investment managers and private equity players find themselves stretching—their investment parameters, the range of markets they consider, the property types they seek, and the ultimate deals they do—to keep their clients and partners happy, and most of all to increase their short-term fee revenues. If you do not put money to work, the bottom line weakens and your investors start to look elsewhere. So what if the chronically slow growth U.S. economy lives off artificially-sustained low interest rates, consumers are hamstrung without easy credit, wages for most Americans have stagnated, corporate earnings really do not support stock prices, inflation for everyday items like food is rising, and the Middle East energy region (on which the world economy still depends) descends into a perilous state of greater dysfunction.
Now clearly, the real estate markets do not resemble the overheated 2006-2007 period of sky's-the-limit deal making, but here are some of the concerning indicators of over-reaching:
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
