Posts Tagged ‘New York’
Thursday, January 28th, 2010
London has overtaken Washington, D.C., as the preferred city for commercial real estate investment, primarily because investors believe that prices have bottomed out and the time to get into that market is now. The British capital has overtaken the previous favorites of Washington, D.C., and New York, according to a survey conducted by the Association of Foreign Investors in Real Estate (AFIRE).
“London currently offers investors the advantage of a ‘re-priced’ market,” says James Fetgatter, AFIRE’s CEO. “The re-pricing began sooner than it did in other cities.” London’s score is 31 points higher than the perennial favorite Washington, D.C., and 40 points ahead of New York City. A year ago, London occupied second place, ranking four points behind Washington. The survey of the association’s approximately 200 members was taken in the fourth quarter of 2009 and represents ownership of more than $842 billion of commercial real estate. Of that, $304 billion is invested in the United States.
London, along with the rest of the United Kingdom, has rebounded with investment rising 56 percent from the first to the second half of 2009. Property values rose 2.4 percent in November, the largest monthly increase in 15 years. Savills, the real estate advisory firm, is predicting London will eclipse New York as the fastest growing global financial center.
Despite London’s success, the United States is still preferred as the “most stable and secure real estate investment environment,” according to 44 percent of survey respondents. This is the first time the United States ranked below 50 percent in the survey. It ranked 53 percent in 2008 and 57 percent in 2007. Germany occupies second place with 21 percent. In terms of price appreciation, the United States ranks first, followed by the United Kingdom and China.
The preferred property for investment is multifamily residential, followed by office, industrial, retail and hotel.
Tags: Boston, China, financial crisis, Germany, London, Los Angeles, New York, Real Estate Roundtable, San Francisco, United Kingdom, United States, Washington DC
Posted in Industrial, Office, Residential | No Comments »
Tuesday, December 1st, 2009
As well-known national retailers like Circuit City and Linens ‘n’ Things go out of business, one high-profile merchant saw its profits fall just one percent during the third quarter of 2009. Venerable Tiffany & Co. — renowned for its signature blue box - recently raised its year-end forecasts after reporting an uptick in domestic and foreign sales.
Tiffany’s - like the rest of the luxury retail sector - had seen its sales fall significantly during the recession as customers shied away from purchasing expensive jewelry. Now that the economy is starting a long and likely slow recovery, Tiffany’s quarterly performance is a positive sign. The firm earned $43.3 million, or 35 cents per share, for the quarter ending October 31, 2009. Revenues fell three percent to $598.2 million. The results clearly beat Wall Street expectations, which predicted a profit of 24 cents per share based on sales of $575.1 million.
Domestic sales are still down nine percent, with revenues at the flagship New York store down eight percent. Overseas results were more positive, with Asia-Pacific sales up 10 percent and European sales rising 12 percent.
The trend bears out a report by Bank of America/Merrill Lynch that luxury goods sales next year will increase by five percent with a spike of 13 percent in net profits expected. (Baum & Company is a little more cautious, predicting a one percent sales growth next year.) Part of the issue is cost cutting and efficiency by the retailers and part maybe renewed confidence because of the rebounding stock market - something that correlates closely with personal spending.
Tags: Circuit City, New York, Tiffany, Wall Street
Posted in Economics | No Comments »
Thursday, November 19th, 2009
There’s a rather odd correlation between the New York Yankees winning the World Series and Wall Street. A Yankee win historically has coincided with a bull market. An analysis by Standard & Poor’s Capital IQ reveals an average of double-digit yearly returns from stocks when the Yankees win the World Series. By contrast, the stock market tends to fall in years when the Yankees lose the championship.
An analysis of the 22 years since 1936 in which the Yankees won the World Series found that the Standard & Poor’s 500-stock index rose a minimum of 10 percent over the previous year. By contrast, when the Yankees lose the World Series, stocks fell 13 percent on average. Additionally, when the series ends after six games (as happened this year), the average return rises to 15 percent. The average fell to just eight percent if the series goes for seven games.
Despite the Yankees’ record, Wall Street tends to prefer National League victories versus the American League. An analysis of the 30 World Series wins by National League teams since 1936 show that the stock market rose an average of 15 percent the following year.
There are exceptions to the rule. When the Yankees won the 1936 World Series, the stock market declined 34.7 percent over the next year. The worst record belongs to the Boston Red Sox, who saw the stock market decline by 37 percent after their 2008 World Series victory. Coincidence or not, it will be interesting to see if this yardstick proves true this time around.
Tags: New York, Standard & Poors 500, stock market, Wall Street
Posted in Economics | No Comments »
Monday, August 3rd, 2009
More than $108 billion of commercial properties in the United States are now in default, foreclosure or bankruptcy. That preliminary statistic is nearly double the amount reported at the start of 2009, according to New York-based Real Capital Analytics, Inc.
At the end of June, 5,315 buildings were reported to be in financial distress. Hotels and retail properties are the most “problematic” assets after bankruptcy filings by mall owner General Growth Properties, Inc., and Extended Stay America, Inc. The lack of credit is spurring property defaults throughout the country and among every type of investor.
“Perhaps more alarming than the rapid growth in the distress totals is the very modest rate at which troubled situations are being resolved,” according to Real Capital Analytics. The good news is that approximately $4.1 billion of commercial properties have emerged from distress. “In far more situations, modifications and short-term extensions are being granted, but these can hardly be considered resolved, only delayed,” the report notes.
Tags: assets, bankruptcy, commercial properties, credit, distressed asset, Extended Stay America, financial default, foreclosure, General Growth Properties, hotel, New York, Real Capital Analytics Inc, retail, United States
Posted in Development, Financing | No Comments »
Friday, July 17th, 2009
America’s financial capital is now Washington, D.C. With Congress and the White House acting forcefully to stop the bleeding resulting from the worldwide financial crisis, numerous investors and brokers are relocating from New York to Washington because that’s where the action is these days.
One of the nation’s healthiest metropolitan areas, Washington is benefiting from government hiring as the Obama Administration works to strengthen the nation’s financial system. The collapse of prominent investment banking firms such as Lehman Brothers and Bear Stearns has triggered increased scrutiny of large banks and created a need for additional workers with auditing and investment expertise in government regulatory offices.
The government’s deep involvement in the financial sector is bringing in investment that in other times would have gone to Manhattan. German banks, for example, are investing significant dollars in hotels and office buildings.
According to Ramon Kochavi, regional manager of Marcus and Millichap, “The government will grow.” Kochvai foresees declining defense contracting and an expansion of biotech firms under the Obama administration. New R & D firms are opening facilities in Rockville, MD, and along Virginia’s Dulles Corridor to support the National Institutes of Health in Bethesda, MD. Medical services growth is also expected as access to healthcare is a national priority.
Tags: banks, Bear Stearns, biotech firms, Dulles, financial capital, financial system, German banks, government, Healthcare, hotels, investment banking, Lehman Brothers, Manhattan, Marcus and Millichap, MD, medical services, national, National Institutes of Health, New York, Obama administration, office buildings, R&D, Ramon Kochavi, Rockville, Virginia, Washington, Washington DC, White House
Posted in Financing | No Comments »
Friday, June 5th, 2009
The opening of the new Modern Wing of the Art Institute of Chicago spurred me to finally trek out to the other great piece of museum architecture in the Midwest, Santiago Calatrava’s Quadracci Pavilion, a sculptural addition to the Milwaukee Art Museum which opened in 2001, and cost approximately $121 million. The museum initially hired Calatrava to design a 58,000 SF addition to the existing Eero Saarinen and David Kahler buildings in 1994. When fundraising exceeded all expectations, the scope of the project was expanded to 142,000 SF, increasing the gallery space by 30 percent. It was Calatrava’s first building in the U.S.
In many ways, the Quadracci is a perfect counterpoint to Piano’s Art Institute. Where the latter is Prairie-style 
horizontal, a symmetrical glass and limestone box that sinks into the earth, Calatrava’s is an expressionist sculpture that ascends and twists into the lakefront air. The signature Calatrava move (similar to his El Alamillo Bridge in Seville) is the pair of beautifully articulated wings that frame the new building, called the Burke Brise Soleil. With a wingspan rivaling a Boeing 747 and weighing 90 tons, they open and close with the museum (and also with the ebb and flow of the wind load). But Calatrava’s greatness is that his wings aren’t merely wings — they are part of a vocabulary of organic shapes that converse with Lake Michigan, echoing waves and stingrays and even skeletal shapes. “The project responds to the culture of the lake: sailboats, the weather, culture, the sense of motion and change,” he said.
For all the splendor of the wings, the arrival on the inside may be the architect’s greatest reach — the Cathedral-like entry, the Windhover Hall, that recalls everything from Gothic to Antoni Gaudi’s unfinished Sagrada Familia in Barcelona — complete with flying buttresses, vaulted ceilings and a nave shaped like a prow that extends into Lake Michigan. Like Piano, Calatrava is reaching back to the scared origins of art and expression to create a building that cloaks its exhibits in silence and suggestions of ancient ritual.
Calatrava has several other U.S. projects on the boards, including the Atlanta Symphony Center, 80 South Street in New York (a residential tower), the World Trade Center Transportation Hub in New York and the Trinity River Bridges in Dallas.
According to statistics provided by the Milwaukee Art Museum, attendance the year the Calatrava wing opened soared from 165,285 in 2000 to 373, 578 in 2001. The peak year was 2002, when 538,764 people visited the museum. Attendance was up in 2007 nearly 80 percent from 2000 - the year before the addition opened - but down about 45 percent from the year after the addition opened.
Tags: architecture, Art Institute, Art Institute of Chicago, Burke Brise Soleil, Calatrava, Calatrava wing, Cathedral-like, change, culture, Dallas, David Kahler, Eero Saarinen, El Alamillo Bridge, expressionist sculpture, gallery, gallery space, Gothic, Illinois, Lake Michigan, lakefront, limestone box, Midwest, Milwaukee Art Museum, motion, new building, new Modern Wing, New York, organic shapes, Piano's Art Institute, Prairie-style, project, Quadracci, Sagrada Familia, sailboats, Santiago Calatrava's Quadracci Pavilion, sculptural addition, Seville, signature Calatrava, skeletal shapes, symmetrical glass, Trinity River Bridges, weather, Windhover Hall, wings, World Trade Center Transportation Hub
Posted in General, Healthcare | No Comments »
Wednesday, April 22nd, 2009
Shipping activity has plunged as much as one-third at U.S. ports most heavily invested in the once red-hot but now declining Asia trade.
Freight rates from South China to Europe have slid as much as 42 percent from some ports since November, leading shipping industry authority Drewry Container Freight Rate Insight Report to speculate that this once-robust market is in freefall.
As freight rates fall to record lows shipping companies are playing hardball to remain competitive, even though relatively little product is being shipped these days. According to Drewry, container lines could see a $68 billion plunge in global revenues this year, compared with 2008 revenues of $220 billion. Drewry notes that global all-in freight rates fell to $1,681 per 40-foot box, down from $2,098 in November. That’s a steep $400 drop per feu (forty-foot equivalent unit) or 20 percent in just two months.
The ports of Los Angeles and Long Beach are slashing cargo rates to retain old customers and attract whatever new business they can. Spanning 10,000 acres, these vast ports typically handle $357 billion in goods every year. The ripple effect of this year’s overall 18.1 percent downturn is evident in California’s vital Inland Empire logistics market, where higher vacancy rates - now approaching nine percent — are translating to cheaper rents.
Conditions are slightly better at the East Coast ports of New York and New Jersey, because their diverse mix of trading partners include Asia, Europe, Latin America and South America.
Tags: Asia, California, cargo rates, Dewry Container Frieght Rate, Drewry, East Coast ports, Europe, feu, freight rates, global revenue, Inland Empire, Latin America, logistics market, Long Beach, Los Angeles, New Jersey, New York, ports, South America, South China, vacancy rates
Posted in Economics, Industrial | No Comments »
Monday, June 16th, 2008
One of the biggest issues we’ve faced is the stability of the capital markets, which are slow but showing some signs of life. You have to look closely, but there are some positive signs. At the end of March, two office properties sold for more than $500,000,000 each. These included the UBS Tower in Chicago, which Hines Interests purchased for $540 million and the Altria building in New York, which Global Holdings (the Ofer family) purchased for $525 million. Prices for office properties nationally are off just two percent from their peak during the second quarter of 2007, according to Moody’s/REAL Commercial Property Price index. One exception, after accounting for well over half of 2007 sales volume, portfolio sales are rare in 2008.
Tags: capital markets, Chicago, Illinois, New York, office properties, sales volume, UBS Tower
Posted in Economics | No Comments »