By Tony Stasiek, editor
“We assume people will eventually
come out of hiding and there will be
more lending and investment in 2008.
We’re just not sure exactly when.”
— Jan Sternin, senior vice president of commercial/
multifamily, Mortgage Bankers Association (MBA)
Scotsman Guide, February 2008
A year later, as MBA primes for another Commercial
Real Estate Finance (CREF)/Multifamily Housing Expo
(Feb. 8-11 in San Diego), the story’s the same for the
multifamily sector. But assumptions about its hibernation vary widely — from slimy AM-radio commercials
selling consumers on the inevitability of a market
rebound to Wired’s December depiction of China’s
flag hanging over the New York Stock Exchange in an
“artifact from the future” ( tinyurl.com/sgwired).
In a way, it’s as though MBA could retitle each of its
CREF breakout sessions “When We Think the Market Will Recover.” Which could be entertaining. Just not necessarily uplifting.
Research firm M/PF YieldStar recently reported that multifamily occupancy dropped 1.2 percent
between this past September and December. As Reis Inc.’s Victor Calanog noted in January’s
Property TypeCast column ( scotsmanguide.com/3356), these occupancy levels had been stable
throughout most of 2008.
Meanwhile, top multifamily developers such as JPI, AvalonBay Communities and Forest City
Residential Group announced construction cutbacks or stoppage in 2009. The most-recent
origination data from MBA showed commercial loan activity dropping 53 percent between
third-quarter 2008 and ’07. And to top it off, the Urban Land Institute predicted this will be
commercial real estate’s worst year since ’92.
As CREF attendees prime to pose and possibly answer a number of questions regarding the
liquidity freeze, this month’s Scotsman Guide features a number of additional voices chiming
in on similar topics. On Page 34, First National of America’s Jerry Sager points to ways brokers
can approach lenders during tight-financing times. And on Page 14, Michael C. May of Freddie
Mac — which backed more multifamily loans in ’08 than ever before — tells us how the former
government-sponsored enterprise plans to continue its strategies as a government conservatee.
Loan Post Snapshot
Top average lender replies per post on
Scotsman Guide’s Loan Post in December:
PROPERTY TYPE CATEGORY REPLIES
1. Apartment ................. Multifamily ................ 7. 9
2. Retail ........................ Commercial.............. 6.2
3. Multifamily................. Multifamily ............... 5. 3
4. Hospitality ................. Commercial............... 5.1
5. Mixed-Use................. Commercial.............. 4. 4
■ $1 million or less
■ $1 million to $5 million
■ $5 million or more
MORE INFORMATION AVAILABLE AT OUR MORTGAGE METRICS: COMMERCIAL BLOG
Scotsman Guide now presents data from our award-winning lender-search engines and Scotsman Guide Loan Post —
plus analysis of trends we’re seeing in the industry. Check it out:
Holiday season registers worst
retail performance since 1970
© 2009 United Press International. All rights reserved.
In the Past Month
News from the industry and abroad
WASHINGTON, D.C. — Retail sales through the holi-day-shopping season were the weakest in 38 years, the
International Council of Shopping Centers reported.
“The 2008 recession, widespread heavy discounting
and adverse pre-holiday weather all coalesced to produce the weakest holiday season since at least 1970,”
according to the organization’s weekly sales report
In the week ending this past Dec. 30, sales were down
1.5 percent from the previous week and down 1.8 percent from the same week a year ago, the report said.
Manufacturing activity reaches
lowest reading in 28 years
TEMPE, Ariz. — U.S. manufacturing activity declined
for the fifth-consecutive month in December, falling
to a 28-year low, the Institute for Supply Management
(ISM) said on Jan. 2.
ISM’s headline index, the Purchasing Managers Index,
fell 3. 8 points to 32. 4, with exports falling 5. 5 points to
35. 5 and imports increasing 1.5 points to 39.
New orders, a component index, contracted for the
13th-straight month, falling to 22. 7 — the lowest reading since January 1948, ISM said.
The index uses 50 as a break-even point, with figures
greater than 50 indicating growth and figures lower
than 50 indicating contraction.
Consumer Price Index continues
its freefall in November
Illustration: Keith Negley
WASHINGTON, D.C. — The Consumer Price Index
dropped by 1.7 percent in November, falling for the
second-consecutive month, the U.S. Department of
The decline exceeded economists’ expectations of a
1.3-percent drop and indicates that consumers have
sharply reduced spending.
In November, housing prices also fell 0.1 percent,
transportation prices fell 9. 8 percent and medical
prices increased by 0.2 percent.
Poll: More Americans fear
next economic depression
PRINCETON, N.J. — The percentage of U.S. adults
believing an economic depression is possible or likely
has grown in the past few months, according to a
In telephone interviews of 1,008 adults that Gallup
conducted from Dec. 12 to 14, 25 percent of respondents indicated a depression was not possible, a sharp
drop from a previous survey in which 40 percent indicated a depression was not possible, Gallup said.
Those indicating a depression was “very likely” grew
from 23 percent this past fall to 35 percent, Gallup
The poll defined a depression as a shrinking economy
lasting several years.