About This BlogUnvarnished truth. Consultant Jonathan Miller (Miller-Ryan) has compelling views on the market, and he shares them with GlobeSt.com subscribers.
Wary About Office--Tenants Edge
We are six years into recovery and the national office vacancy rate is hovering somewhere around 15%. Is this the new equilibrium? Ten percent or under vacancy used to be the rationalized comfortable zone for relative supply-demand balance, but not many office markets can boast those numbers, especially out in the suburbs where much of the vacancy concentrates. Now, spec projects ramp up in many downtown markets beyond the relatively safe 24-hour cores like in…Read More
Our Exceptional US Infrastructure
Just before I left for a trip to England last month, an Amtrak train left the tracks north of Philadelphia, killing eight and injuring more than 200. It was not a high speed train—we don’t have those in the U.S. In fact we don’t have many passenger train lines in this country, and the accident ironically precipitated another round of let’s cut funding to Amtrak from a Congress which has chronically underfunded passenger train service.…Read More
The Five Cap Rate Rule
I was talking to a portfolio manager last week just as he was reviewing the latest benchmark quarterly return for open-end diversified funds from the NCREIF-ODCE. The total return for the first quarter on the highly followed index was 3.39%, including a hefty appreciation component of 2.20%....Read More
Private Equity Firms: The Curse of Success
Blackstone’s $14 billion acquisition of GE’s real estate holdings highlights again the concentration of institutional property assets among a relative handful of global private equity players, who mostly trade among themselves, driving up prices.Read More
About 15 years ago, I was out in Phoenix and a local was telling me about the unlimited supply of water available from regional aquifers. I had been questioning how the city could maintain all its vernal golf courses in the middle of cactus filled deserts, let alone the rampant suburban development stretching to the horizons. …Read More
Potholed Thinking: What's More or Less
More and Less The monthly jobs report tells a familiar story—the unemployment rate heads down, lots of new low wage jobs are created, the overall labor force has not grown appreciably as more baby boomers retire, and the small minority of people at the high end of the education scale (with graduate degrees) have the greatest opportunity to secure most of the wage gains, while everyone else treads water or loses ground… Employees of Wal-Mart,…Read More
The Real Threat To Malls
America’s malls could be terrorist targets… That’s according to the head of U.S. Homeland Security… And this is supposed to be news as we approach 14 years after 9-11? Of course, Secretary Jeh Johnson was trying to make a point to a recalcitrant Congress that his agency needs to be funded to protect the country properly. Throwing a little scare into Americans might get their representatives to act. In particular, the warning signaled--watch out at…Read More
Productivity Without Wage Gains
It’s always something, isn’t it? Now, the strong dollar restrains economic growth… Exports are off, imports are up… The trade gap widens... Savings from lower gasoline and heating prices offers some offset, but since a majority of Americans have little cushion in their bank accounts or retirement plans with many living pay check to pay check, spending is better but not off the charts. After lagging in the post-recession malaise, car sales finally spurt. But…Read More
What is a Secondary Market?
You know we are in the mature part of the cycle when institutional investors start hashing over just what is a secondary market. What they are really concerned about and trying to rationalize is buying assets in higher risk markets with suspect tenant depth and limited exit strategies if times go bad. And oh by the way that’s just about everywhere outside the leading 24-hour cities. It’s just a matter of degree of how risky…Read More
The Perennial Question: When Will Interest Rates Increase?
It’s a new year (BTW a very Happy New Year to you) and the markets face the same question confronting them and us since recovery began.Read More