Blog

  This year I will remember as the year of our extended “Spring & Summer Tour” to visit with our most valuable clients, and to nurture future client prospects. So far, it has stretched from New York, Boston, Hartford and Washington DC to Los Angeles, San Francisco, Dallas, and with colleagues joining me in Chicago. In addition, I personally re-visited Abu Dhabi and Dubai and made a first visit to Oman and Kuwait. The atmosphere at all the meetings was filled with a common thread of “braving the current storm”. The combined investment of these clients represented hundreds of billions…

  For approximately 12 months, conventional wisdom has suggested that the wide bid-ask separation between sellers and investors would soon disappear and transaction activity would significantly increase at a lower pricing point. Continued deterioration of fundamentals as evidenced by a steadily increasing CMBS delinquency rate (now at 2.1%) would seem to support this forecast. But, as if defying gravity, transactional activity remains stagnant with capital ready to invest but not enough sellers willing to sell at price points required by investors. There seems to be several explanations for this continued paralysis. Existing assets (equity and debt) are generally held by…

Hedge funds, private equity funds and top-tier investment banks that inhabit or inhabited Midtown offices along the premier Avenues were the first companies in New York City to experience the tumult of the current recession. Of course, the declines in their respective businesses that began in the second quarter of 2008 were preceded by the burgeoning collapse of the residential housing market that began a year earlier in the rest of the country. When New York City’s financial sector started to contract in 2008, demand for office space in the Midtown market shriveled. As a result, the availability rate escalated…

Change Design – our pursuit of the moment.  In developing and designing buildings —  the act of creating buildings, by its nature, is a great expense of energy and materials dedicated to a moment in time, for the human activity of it’s time. Change is a constant state — how can we create buildings that are relevant today, and lead us into our changed future?  Between the economy, climate change, and the technology revolution, we must design for change.  Here are some of the change design tools that we are using, every day. Understand the past, listen to the present, design for the…

 The investment market held its collective breath late last week as the 10-year US Treasury touched 4% before settling at 3.79% on Friday. The sharp upward movement of the 10-year was a reminder of how important debt is to the overall economic recovery and our business in particular. Over the past twelve months, we’ve seen the continuation of a number of debt trends that are shaping the deals that close today: assumable debt that drives transactions; regional lenders filling a lending void for smaller (sub-$25MM) deals, and Fannie & Freddie drawing buyers to multi-family with attractive first mortgage financing. The…

The latest national forecasts by PKF Hospitality Research call for unit-level RevPAR declines in excess of 17 percent and a fall-off in profits of more than 30 percent.  In this depressed environment, cost control becomes even more crucial.  While savvy managers tend to keep a close check on their operating expenditures, one expense item that is not typically on management’s radar screen is property taxes. For the most part, property owners have no control over the movement of the millage/tax rates set by the taxing jurisdiction. However, there are ways for hotel owners, lenders, and asset managers to take a…

  Here are some words of wisdom from a mortgage banker who has been through the cycles before. They hold truths for everyone in the real estate business, not just mortgage bankers. Whether you have been through tough times or not, you will get something out of these suggestions. 1. Don’t wait for the phone to ring. Pick it up and set up meetings. 2. Stay close to your lenders. 3. Chase relationships not deals. 4. Find the new buyers. 5. Be responsive. 6. Be an expert and know what you can get done. 7. Don’t get down. And if…

  Miami’s commercial real estate sector is intently focused on a recent court ruling that rejected the planned development of a Lowes hardware store outside Miami-Dade County’s Urban Development Boundary (UDB), our line of demarcation for westward sprawl. Essentially, commercial and residential developers are pushing to expand the boundaries while environmentalists and advocates of sustainable growth favor holding the line in place. Another planned development that would require moving the UDB – this one a large-scale residential community – is still awaiting a decision from the court. Unlike many U.S. cities, Miami evolved after the arrival of the car, a…

 A powerful trend in our practice is the growth of work in markets outside the US. Why do business leaders across the globe increasingly seek American designers for their projects?  Considering the challenges of distance and cultural hurdles, this decision is not made lightly – and is usually made at the highest executive level. In my experience, our greatest value is our way of thinking.  We are the universal donor – type O – our relatively young and diverse culture creates a way of thinking that is our ultimate value outside the US. We are creative thinkers, open minded and empathetic to other cultures and frameworks, yet we are…