Dr. Sam Chandan

About The Author

An irreverent take on the macroeconomic environment. Dr Sam Chandan is President and Chief Economist of Chandan Economics and an adjunct professor in real estate and public policy at the Wharton School of the University of Pennsylvania.

  • Do Weak Expansions Last Longer?

    September 28, 2015

    Do weak recoveries last longer? Measured in the most general terms, there is a correlation. But contain your excitement; growth that falls short of the economy's potential is hardly cause for celebration.

  • Economy

    Goldilocks Jobs Report

    May 11, 2015

    April's jobs report fell squarely in the goldilocks zone. Employment gains strengthened, but not enough in the minds of investors to bring forward the timing of a rate hike.

  • Declining Labor Participation Remains a Key Qualifier

    April 07, 2015

    The March employment report surprised to the downside. The US economy added 126,000 jobs during the month, the smallest net increase in two years. Beyond the headline, the persistent decline in labor participation remains one of the major qualifiers of the jobs recovery.

  • Capital Markets

    Threat of Deflation

    February 24, 2015

    The sharp decline in oil explains a great deal about the direction of prices, but it is not the whole story. Narrower measures of core inflation point to underlying weakness in demand that will constrain monetary policy (and real estate) should it persist.

  • Employment

    Waiting for Wage Growth

    January 12, 2015

    The December jobs report capped a banner year for the US labor market. Still, the momentum remains uneven absent a meaningful acceleration in earnings growth.

  • Economy

    Stagnant Wages Qualify Stronger Jobs Report

    October 06, 2014

    There was plenty to cheer in last Friday's employment report. But even a cursory review of the data reveals improvements that are uneven along dimensions that matter for real estate.

  • Market Sentiment Runs Ahead of Growth Outlook

    July 16, 2014

    Is the US economy on a roll? Sentiment in the commercial real estate market – as well as the direction of underwriting standards – suggests exactly that. The data does not.

  • Bank Default Rate Declines as Lending Rises

    June 04, 2014

    The default rate across banks' multifamily and commercial real estate mortgages declined to 1.6 percent in the first quarter. In the case of the former, the default rate is now at its lowest point since before the financial crisis and recession.

  • The Next Recession

    April 25, 2014

    Nearly five years into the current expansion, history suggests many of today's originations will mature in recession.

  • Economy

    The Problem With the Labor Market in Seven Charts

    January 17, 2014

    The industry outlook for the economy has turned bullish. But perceptions of a recovery in jobs have only modest support in the data. It's not just a matter of time; the structural problems with our labor market won't solve themselves.

  • Positive Growth Outlook for 2014

    January 02, 2014

    Barring an uncontrolled shock, the outlook for the US economy is modestly positive. After two years of underperforming versus potential, growth will quicken to just short of 3.0 percent during 2014 and 2015.

  • Capital Markets

    Banks Continue Measured Push Into Construction Lending

    December 02, 2013

    Banks increased net construction lending by $3.6 billion during Q3 2013. The legacy default rate on their construction loan balance sheets dropped to 4.9 percent. It's a welcome trend, though some institutions are taking risks as competition ramps up for stabilized property lending.

  • Economy

    The Death of Rate-Induced Price Inflation

    August 19, 2013

    Less intrusive monetary policy and rising interest rates are no surprises. Absent the related distortions of the capital marketplace, investors can expect weaker price momentum.

  • Economy

    Starting to Think (or Write) About Interest Rates and CRE Values? You're Late.

    June 26, 2013

    The last week has seen an amazing proliferation of researchers and journalists cogitating on the impact of rising interest rates on commercial property values. It's a critical issue for our industry. But it's hardly unexpected or unexplored. The red flags are in the rearview mirror, even if it's only now becoming good copy.

  • Underwriting a Housing Recovery

    September 25, 2012

    National housing trends show a tentative recovery is underway. While not true for every neighborhood, some segments of the market will see rental demand tempered by housing's mollified risk profile.

  • Capital Markets

    Misplaced Hopes for Further Fed Interventions

    September 01, 2012

    Property investors are listening closely for any subtle shifts in the Fed's signaling its next moves. But this focus is largely misplaced. At least for now, the practical effectiveness of the Fed toolkit in supporting real economic activity is debatable.

  • Aggregate (external)

    Too Soon to Call a Rebound in Jobs

    August 06, 2012

    July's employment report showed private sector job creation rising to its highest levels since February. Underlying weaknesses persist, however, demanding a cautious evaluation of the labor market outlook.

  • Capital Markets

    Euro Crisis, Fed Accomodation, and Underassessed Risks to CRE

    June 25, 2012

    Navigating the recovery's fault lines, the Federal Reserve committed last week to continuing the maturity extension program. Already at implausibly low levels, institutional borrowing costs are supporting property prices in segments of the market where fundamentals cannot. That is a dangerous trend.

  • Weak Drivers of Retail Spending Demand Attention

    April 08, 2012

    Weary of deleveraging and in search of a road back to the shopping mall, American consumers have closed the gap between spending and weak income growth by lowering their savings rates and drawing more heavily on credit.

  • Aggregate (external)

    Athens is Burning

    February 12, 2012

    The Greek parliament passed wide-ranging austerity measures on Sunday, paving the way for Eurozone finance ministers to approve the latest rescue package on Wednesday. An important step, it leaves the sovereign debt crisis' underlying drivers unresolved.

  • Aggregate (external)

    Q4'11 GDP Estimate Not as Good as it Seems

    January 29, 2012

    At the conclusion of a disappointing year, the expansion of the US economy accelerated in the fourth quarter of 2011. But the headline result reflects a large contribution from private sector inventory buildup that will not carry forward into 2012.

  • Aggregate (external)

    Where the Jobs Are

    January 15, 2012

    Data on job openings suggest that the market's upside can be found in generally lower-paying occupations, which support smaller increases in discretionary spending, and in areas that exhibit a weaker relationship with office demand.

  • Aggregate (external)

    The October Jobs Report

    November 06, 2011

    Last Friday's employment report offered little evidence that firms are poised to accelerate the pace of hiring. Particularly in sectors related to demand for office space, payroll gains remain frustratingly slow, once again qualifying the near-term outlook for property fundamentals.

  • Aggregate (external)

    Signs of Inflation

    October 24, 2011

    Even as measures of economic growth have slowed, inflationary pressures have been rising in the United States. If core inflation accelerates before occupancy rates rise, real estate's traditional inflation hedge will prove less effective in lagging markets. At the same time, the requisite tightening of monetary policy implies higher refinancing costs than prevail in today's commercial real estate market.

  • Aggregate (external)

    Details of September Jobs Report Disappoint

    October 09, 2011

    Last Friday’s employment report surpassed economists’ baseline expectations but still fell woefully short in bolstering confidence that we are on the cusp of a more robust jobs recovery. For investors in the office sector, the frustrating pace of improvement in professional employment contrasts with sustained price improvements for core assets.

  • Capital Markets

    Nothing for CRE in Operation Twist

    September 27, 2011

    Whether Operation Twist will push rates any lower, and whether marginally lower rates matter for the economic outlook, are questions for debate. In fact, the Fed's latest action is unlikely to offset any of the economy's most serious headwinds.

  • Aggregate (external)

    Why the American Jobs Act Will Fall Short

    September 10, 2011

    The positive impact of the proposed American Jobs Act is overstated by its proponents. In the near term, the proposal could have a negative effect on hiring trends. Given the potential for Congressional gridlock, some firms will postpone plans for payroll expansion until the time frame and exact provisions of new measures become clear.

  • Aggregate (external)

    Hurricane Irene and the Economy

    August 29, 2011

    In the context of a fragile economic recovery, questions about the impact of the hurricane on activity are prudent and necessary. The immediate impact of the hurricane will be a decline in economic activity. In the short and medium term, however, activity may rebound as capital and labor resources are deployed in rebuilding.

  • Aggregate (external)

    Updating the Economic Outlook

    August 14, 2011

    Updated assessments of the economic outlook have been colored by the last week's wild swings in the stock market. If Washington makes an about face and works to support an environment conducive to private investment, conditions could change for the better.

  • Aggregate (external)

    Parsing the Market’s Slide

    August 05, 2011

    Investors are increasingly concerned about the potential for a relapse into global recession, internalizing weak US economic data that was overlooked in the days and weeks preceding the resolution of the debt impasse.

  • Aggregate (external)

    Disappointing June Jobs Report

    July 08, 2011

    The Bureau of Labor Statistics' report of June employment offers few silver linings for the commercial real estate industry. While the outlook is restrained, the resolution of policy uncertainties has the potential to stimulate a return to more stable job growth.

  • Distressed Asset Investments

    Wide Spread in Banks' CRE Default Rates

    June 29, 2011

    The default rate on banks' CRE mortgages has come off its 2010 peak. More than 40% of institutions now have CRE default rates of 1% or less. At the other extreme, 75 banks with a total of $12.8B in CRE loans have default rates exceeding 20% as of Q1'11.

  • Distressed Asset Investments

    Banks' CRE REO by the Numbers

    June 19, 2011

    Billions of dollars in bank-held commercial real estate are spread over thousands of institutions. For many distressed investors (and for policymakers) only a small share hold CRE REO that warrants interest (or serious concern).

  • Capital Markets

    Quantitative Easing Revisited

    June 09, 2011

    We should not bemoan QE2's end upon its June sunset. Another round of Fed bond-buying would serve to distort property prices while constraining the medium-term flexibility of US monetary policy. The corresponding benefits would be limited at best.

  • Before ICSC's RECon, a Consumer Health Check

    May 17, 2011

    Consumer activity is picking up, in spite of headwinds ranging from the inflation outlook to the slow pace of income growth. To pay for it, Americans are borrowing again. The Great Deleveraging? Apparently not.

  • Capital Markets

    A Decade of Defaults

    November 29, 2010

    Leading up to the peak of capital inflows to commercial real estate, the assessment of lending risks adjusted in favor of current metrics and away from long-term cyclical measures.

  • Aggregate (external)

    The Latest Bank Failure Fits An Emerging Pattern

    June 21, 2010

    Hundreds of banks are grappling with commercial mortgage defaults matching or exceeding the profile of the last two year’s CRE-related bank failures. The most recent bank closing - Nevada Security Bank on Friday, June 18 - is consistent with the findings of our new analysis.

  • Aggregate (external)

    Senate Forgoes Action on Fannie and Freddie

    May 19, 2010

    Senate Forgoes Action on Fannie and Freddie For Now Sam Chandan PhD FRICS Real Capital Analytics and the Wharton School The government-sponsored enterprises, Fannie Mae and Freddie Mac, reported their first quarter 2010 financials earlier this month. Fannie Mae reported a net loss of $11.5 billion...

  • Aggregate (external)

    Employment Trends Portend Mixed Fundamentals Outlook

    April 12, 2010

    Employment Trends Portend a Mixed Outlook for Fundamentals Sam Chandan PhD FRICS Real Capital Analytics and the Wharton School Patrick Therriault Real Capital Analytics In its monthly update of apartment sector trends, Axiometrics reported that effective rents increased for the second consecutive...

  • Aggregate (external)

    Interest Rate Outlook

    March 28, 2010

    Interest Rate Outlook Treasury Yields are Rising; and Why America's Relationship With China Matters for the Analysis Sam Chandan PhD FRICS Real Capital Analytics and the Wharton School Following a lukewarm response to last week's Treasury note offerings, rates closed on Friday near their highest...

  • Aggregate (external)

    Foreign Investors Eyeing US Real Estate

    March 18, 2010

    Foreign Investors Meeting in Cannes, but Eyeing US Real Estate Sam Chandan PhD FRICS Real Capital Analytics and the Wharton School Even while congregating in Cannes for this week's MIPIM conference, foreign investors remain keen on acquiring high-quality assets in the most liquid US real estate...

  • Aggregate (external)

    Are there Systemic Risks from Rising Defaults?

    February 16, 2010

    The Congressional Oversight Panel Releases Its Report on Commercial Real Estate Market Conditions Sam Chandan PhD FRICS Real Capital Analytics and the Wharton School Andrew Florio and Ben Thypin Real Capital Analytics For a moment, Washington has turned the weight of its attention to commercial real...

  • Seniors Housing Trends Evidence Stability

    December 13, 2009

    Standing Out From a Crowd: Seniors Housing Occupancy and Absorption Rise in the Third Quarter Sam Chandan PhD FRICS Real Estate Econometrics and the Wharton School Michael Hargrave National Investment Center for the Seniors Housing and Care Industry www.nicmap.org [Download PDF] Notwithstanding a resumption...

  • The White House and the November Jobs Report

    December 10, 2009

    The White House and theNovember Employment Report Speaking at the Brookings Institution on Tuesday, President Obama outlined new steps - prefigured by comments by Council of Economic Advisors Chair Dr. Christina Romer a week earlier - that the Administration will propose to spur job growth (watch the...

  • TALF, PPIP, and the Problem of Credit

    November 25, 2009

    TALF, PPIP, and the Problem of Credit A Discussion with McKenna Long's Brian Olasov Brian Olasov, Managing Director at McKenna Long & Aldridge, travelled from Atlanta on Monday to speak with Wharton's real estate finance students on issues relating to the government's interventions in support of commercial...

  • The New Placemaking: A Discussion With Matthew Kwatinetz

    November 21, 2009

    The New Placemaking A Discussion With Matthew Kwatinetz I recently sat down with Heartland's Matt Kwatinetz for a lively discussion about placemaking, whole-neighborhood development initiatives, and the potential for capturing positive externalities in the value of properties adjacent to anchor developments....

  • If It Doesn't Quack Like a Duck: Comments on the New CMBS

    November 18, 2009

    If It Doesn't Quack Like a Duck CMBS, CMBS TALF, and What the New Deals Mean for Credit Five months after the formal expansion of the Term Asset-Backed Securities Loan Facility (TALF) to CMBS in June, the Federal Reserve Bank of New York announced yesterday afternoon that it had received its first requests...

  • A Commercial Real Estate Dissection of the October Employment Report

    November 06, 2009

    A Commercial Real Estate Dissection of the October Employment Report A Review of the Household Data Shows Fewer Lost Jobs but Few Opportunities for the Unemployed The Bureau of Labor Statistics (BLS) released the Employment Situation Report for October on Friday morning, November 6. According to...

  • A Commercial Real Estate Dissection of Third Quarter GDP

    October 31, 2009

    A Commercial Real Estate Dissection of Third Quarter GDP While the formal dating of the recession's end is a privilege that resides with the NBER, news of the economy's expansion has trumped a formal announcement - The Bureau of Economic Analysis (BEA) released the advance report of third quarter gross...

  • Signs of Stability in the New York City Economy

    September 25, 2009

    Signs of Stability in the New York City Economy The last two years' nearly unprecedented economic and labor declines have encroached upon communities across the U.S. Over the past year, unemployment rates have increased in all 50 states and in each of the nation's 372 metropolitan areas. Coinciding with...

  • What Apartment Investors Should Look for in the Employment Report

    August 31, 2009

    Measuring Cohort R What Apartment Investors Should Look for in this Week's Employment Report Update | Friday, September 4 | This morning's Employment Situation Report shows a rise in the national unemployment rate to 9.7 percent as of August 2009. The net payroll contraction of  216,000 jobs is generally...

  • Ascending from the Undergloom II

    August 24, 2009

    Ascending from the Undergloom Part II: Implications for Commercial Real Estate and the Policy Response Thus Far [caption id="attachment_69" align="alignright" width="150" caption="Navigating the Storm | In this image by Doré, Charon negotiates the Styx."][/caption] A few weeks before the Federal Open...

  • Ascending from the Undergloom

    August 14, 2009

    Ascending from the Undergloom Part I: Update on the Economy Having plumbed the depths of Americans' confidence in the potential for recovery, the pace of contraction in the economy has begun to ease. However uneven, tangible signs of firming have materialized in key areas of activity, including the housing...

  • Aggregate (external)

    Where the Stress Falls

    June 24, 2009

    Where the Stress Falls As recently as a few months ago, federal policy makers failed to anticipate the full extent of the downturn. With implications for commercial real estate portfolios, the impact is manifest in state budgets. In preparing the federal budget proposal for the upcoming fiscal year,...

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