presentation: commercial real estate trends and outlook

8/10/2019 Presentation: Commercial Real Estate Trends and Outlook

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COMMERCIAL REAL ESTATE:

2015 INVESTMENT OUTLOOK

LAWRENCE YUN, PhD

Chief Economist, Sr. VP

National Associationof REALTORS

DONALD E. HUFFNER

Managing Director,Head of Americas

AIG Global Real Estate

RICHARD M. GATTO

Executive VicePresident

The Alter Group

ANDREW H. TROTTER, III

Chief InvestmentOfficer

Centennial HoldingCompany

COMMERCIAL ECONOMIC ISSUES & TRENDS FORUM


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Commercial Investment Sales of LargeProperties

(Properties valued at $2.5 million and over)


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Federal Reserve Commercial PropertyPrice Index


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GDP Still not Robust Below 3% for 9 straight years


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Household Net Worth at All-Time High


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Monetary Policy by Federal Reserve(zero rate policy for 6 years!)

%


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Federal Reserve Balance Sheet fromQuantitative Easing

$ million


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10-year Treasury Yield


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Non-worrisome CPI Inflation YetCOLA of 1.7% in 2015


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Rising Renters and Homeowners RentGrowth

(Above 3%)


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Oil Price


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U.S. Dollar Strength vs Euro


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U.S. Dollar Weakness vs Chinese Yuan


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Monetary Policy

Quantitative Easing Finished

Fed Funds Rate hike in 2015 Q1/Q2

Earlier Move to Tighten because ofInflation Pressure

Long-term Steady State Rate (2016

onwards) .. 10 year Treasury at 5.0% Mortgage Rates reaching 6% by 2016


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Jobs(8 million lost 10 million gained) In thousands


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Weekly New Unemployment InsuranceClaims

In thousands


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REALTOR Markets & Deal Size(Not $2.5 million Properties)

21%

22%

26%

17%

12%

1%

2%

< $250,000

$250,000 - $500,000

$500,000 - $1,000,000

$1,000,000 - $2,000,000

$2,000,000 - $5,000,000

$5,000,000 - $10,000,000

> $10,000,000

2013 CRE Lending Survey: Value of most recent sales transaction

Source: NAR


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8%

17%

25%

7%

6%

4%

18%

1% 11%3%

Current sources of financing for commercial dealsNational banks (Big four)

Regional banks

Local banks

Credit unions

Life insurance companies

REITs

Private investors

Public companies

Small Business AdministrationOther, please specify

Source: NAR

Small Banks Important to REALTORS


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REALTORS Help Small Businesses

16%

25%

25%

17%

10%

4%

3%

< $250,000

$250,000 - $499,999

$500,000 - $999,999

$1,000,000 - $1,999,999

$2,000,000 - $4,999,999

$5,000,000 - $10,000,000

$10,000,000

presentation: commercial real estate trends and outlook

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