Economy Watch: CRE Prices Inch Up, Says Green Street
- Sep 08, 2010
September 8, 2010
By Dees Stribling, Contributing Editor
Commercial real estate transactions are still quite slow, at least when compared to the mid-2000s, when the market had rockets in its pockets and hustle in its muscle. But even in these flabbier times (in terms of CRE volume), some meaning can be teased out of the few sales that there are, says Newport Beach, Calif.-based Green Street Advisors,
Green Street’s Commercial Property Price Index rose by 1 percent in August, the company said on Tuesday. Property values have now risen 25 percent from the 2009 trough, according to the index’s reckoning, which means that nearly half of the decline that occurred from 2007 to ’09 has been erased. Values remain 20 percent to 25 percent shy of their peak.
“The rebound in pricing that began in earnest about a year ago has been impressive in terms of both its vigor and durability,” Mike Kirby, Green Street’s director of research, noted in a statement. “Sellers are feeling less pressure to act, the outlook for fundamentals has improved, well-capitalized buyers are plentiful, and financing markets are recovering. Most importantly, the plunge in yields in fixed-income markets has caused buyers of property to reduce their own yield hurdles.”
Conference Board Says Employment Weakening, But Not Collapsing
The official U.S. unemployment rate might seem to be the final word on that unpleasant subject until early next month, but no. Other measurements continue to be published, reinforcing ill-tidings for the employment market but not quite enough ill tidings to push the economy into a double-dip lowland.
The Conference Board Employment Trends Index decreased in August for the second time in the past four months, according to that organization on Tuesday. The index now stands at 96.7, down from July’s revised figure of 97.4. The index is up 9.4 percent from a year ago, however.
“Employment growth has been slow lately, and the Employment Trends Index suggests that it may slow even further this fall,” Gad Levanon, associate director, macroeconomic research at the Conference Board, said in a statement. “However, we still expect job growth rather than an outright decline in the next several months.”
Daley is Done Come ’11
On Tuesday Mayor Richard M. Daley of Chicago stunned the city by announcing that he would not run for another term–which would have been his seventh–during the next mayoral election, which will be on Feb. 22, 2011. Upon completion of his current term shortly after the election, the mayor will have served since 1989, a few months longer than his father, Richard J. Daley, Chicago’s boss from 1955 until he died with his mayoral boots on in 1976.
That might seem like more of a political story than an economic one, but this is Chicago. Daley was boss of the Chicago’s economy in as much as any one person could be, and he’s widely credited with pushing the city toward economic diversification, changing land use patterns in large parts of the city (especially by having large public housing projects torn down), expanding O’Hare International Airport and other transit hubs, and planting more trees than Johnny Appleseed.
Wall Street decided that down was the direction to go after a mostly up week before Labor Day, with the Dow Jones Industrial Average dropping 107.24 points, or 1.03 percent. The S&P 500 and the Nasdaq lost 1.15 percent and 1.11 percent, respectively.