From the Editor
BY IVANNA C. SUKKAR, EDITOR
In the Past Month
Many people view a new year as a new beginning. it’s a tiMe to say, “out
with the old and in with the new.” in the coMMercial real estate finance
industry, new beginnings May take a different Meaning.
For commercial mortgage brokers in particular, this past year likely sent mixed messages.
Here are a few, along with forecasts for what it means for the coming year:
• small-business lending was up this past year — encouraged by the Small Business Jobs Act
and its Small Business Lending Fund — but many lenders still hesitated to make loans. This
past October, the Small Business Administration announced some changes to its 504-pro-
gram refinancing provisions, set forth by the Small Business Jobs Act. Christopher Hurn of
Mercantile Capital Corp. discusses these changes and how brokers can capitalize on them
in 2012 on Page 28.
• looking at specific property types, the office market appeared to be on the upswing this
past first half, but by September, there was a slowdown in leasing activity. And multifamily — seen as a bright spot of the market during the downturn — also saw its fundamentals
begin to decline a bit this year, proving that even the seemingly resilient apartment sector
is not immune to economic woes. Monthly columnist Victor Calanog of Reis Inc. discusses
the office market’s third-quarter performance in this month’s Property TypeCast on Page 16.
You can read his overview of the second quarter’s multifamily market in last month’s column, as well ( sctsm.in/4821).
• commercial mortgage-backed securities (cMbs) issuance is always a trending topic for the
industry. Is it up? Is it down? Where will it go next year? According to Annemarie G. DiCola,
CEO of research firm Trepp LLC, CMBS delinquencies have stabilized this past year, though
they haven’t yet hit bottom. Read our Q&A with DiCola, who also discusses Trepp’s forecast
for 2012 CMBS issuance, on Page 16.
Spending outpaced incomes in September
WASHINGTON, D.C. — Consumer spending outpaced a
0.1 percent increase in incomes this past September,
the U.S. Commerce Department’s Bureau of Economic
Despite two months of flat incomes, spending was up
0.6 percent in September, following a 0.2 percent increase
the previous month. Incomes increased 0.1 percent after
falling 0.1 percent in August, the department said.
That means savings are decreasing, and economists
are concerned that consumers cannot keep spending
beyond their means.
In September, disposable incomes increased 0.1 percent, a slight bump from August, when disposable incomes were unchanged.
Personal income and outlays: dec. 23
If you’re looking for a trend to capitalize on as you enter 2012, you may also consider branching out into the booming product types. Student housing and senior housing both have shown
some resilience this past year. Oliver Swan of Treesdale Real Estate Partners LLC discusses
what you should know to help break into the student-housing market on Page 21. And Love
Funding’s Leonard A. Lucas talks about the U.S. Department of Housing and Urban Development’s Section 232 program for senior housing on Page 26.
• • •
also: Speaking of new beginnings, this marks my final issue of Scotsman Guide. Please welcome new editor Randall Woods ( firstname.lastname@example.org) to this space, beginning with
GDP up 2.5 percent in third quarter
WASHINGTON, D.C. — The U.S. gross domestic product
(GDP), the broadest measure of the economy, increased
2.5 percent on an annual basis this past third quarter,
the Commerce Department reported.
This estimate is in line with expectations and shows a
stronger performance than the second quarter, when
the economy grew 1.3 percent on a 12-month basis.
Personal consumption, overall, increased 2.4 percent
in the quarter compared to the second. Spending on
durable goods intended to last at least three years increased 4.1 percent after declining 5. 3 percent in the
second quarter. Spending on nondurable goods rose
0.2 percent, consistent with the previous quarter.
… in January’s
successfully in the
properties in New
border to Canada
loans? Our call for
Consumer confidence backslides in October
NEW YORK — Consumer confidence in the U.S. declined
this past October after a slight reprieve in September,
according to the Conference Board.
After hitting a two-year low in August, September’s consumer confidence showed slight improvement. For October, however, the index slid from September’s reading
of 46. 4 to 39. 8.
The index uses 1985 as a base year, assigning it a value
The monthly Consumer Confidence Index is based on
a survey of 5,000 households. In October, the number
of respondents indicating economic conditions were
“good” fell from 12.1 percent to 11 percent. The percentage of respondents indicating conditions were “bad”
rose from 40. 5 percent to 43. 7 percent.
The percentage of respondents indicating jobs were
“plentiful” fell from 5. 6 percent to 3. 4 percent, while
the number indicating jobs were “hard to get” rose from
47.1 percent to 49. 4 percent.
Consumer Confidence Index: dec. 27
… and much more.
Online? Check out current and
past editions of Scotsman Guide
Despite its location in a region synonymous with turmoil,
the Israeli commercial market is remarkably strong. Business Monitor International said it was “optimistic” about
the five-year outlook for Israel’s commercial sector, fueled
in part by the country’s vibrant technology and software
industry. This past second quarter, Israel’s unemployment
fell to 6 percent, the lowest it has been in three years, and
its gross domestic product increased by 5 percent compared to the same quarter in 2010. For this past third quarter, CB Richard Ellis reported that prime office rental rates
in Tel Aviv reached $32 per square meter — an 18. 5 percent
year-to-year increase. Retail rents in Tel Aviv also are up
10 percent in the third quarter from third-quarter 2010, at
$110 per square meter.
Fed’s Beige Book says economy is growing
WASHINGTON, D.C. — The U.S. Federal Reserve’s October Beige Book said the economy, overall, continued to
expand in September, although growth was sluggish in
The report refused to give into despair. “Many districts
described the pace of growth as modest or slight and
contacts generally noted weaker or less certain outlooks for business conditions,” it said.
Consumer spending, however, was “up slightly” in September with increased auto sales in “the majority of districts,” the Fed said.