As the 2012 season gets under way, I thought I would borrow a little wit from one of baseball’s wisest, most-quoted pundits—Yogi Berra—and apply it, with a large dose of self-dealing editorial freedom, to our world today.
Daily Reports on Commercial Real Estate
As the 2012 season gets under way, I thought I would borrow a little wit from one of baseball’s wisest, most-quoted pundits—Yogi Berra—and apply it, with a large dose of self-dealing editorial freedom, to our world today.
In 2010, North Texas had a combined real estate investment total of $10.6 billion: for 2011, that total topped $12.3 billion—an increase of about $1.7 billion, or 15.5 percent. Granted, some of that increase comes from a healthy appreciation in the value of the existing assets in the index; the balance, however, comes directly from increased investor activity.
In economic terms, real estate—the asset class—is a little “sticky.” Trends are slow to be recognized, so it’s difficult to immediately spot any material turns, stops or starts. But just this week, detailed research data on the institutional real estate market was released, and there was nothing sticky about that data: Real estate is back.
Dallas has been built by bold, civic and business leaders—many of whom worked in commercial real estate. Today, there are several things we can do to make the city truly great. In 2012, someone in our real estate community needs to (in no particular order):
This week I have the distinct privilege of addressing the incoming class of BBA Scholars at SMU’s Cox School of Business. My task is to introduce them to the Real Estate Finance program at the school. To illustrate why I think real estate is a cool profession to consider, and why I promote it, I use the development of an office building as an example of what being in real estate can really encompass.
The Dallas area has been a clear leader in job creation in the United States. With the direct correlation between job growth and real estate activity well defined, major real estate investors—domestic and foreign—are constantly researching our market for new investment opportunities. And when they do, they are comparing us to alternative markets in terms of risk and reward.
In this down cycle, the vast majority of commercial real estate debt does not carry a personal guarantee. Thus, borrowers may have lost more of their own money, but their liability for repaying the entire debt for the most part is not personal. Nonetheless, I seem to be seeing a few more sleepy-eyed borrowers on the circuit these days. So what’s keeping them up as they try and save what equity—and maybe pride—they have left? Here are their top two nightmares.
I am gearing up to start my 24th year of teaching real estate at Southern Methodist University’s Cox School of Business. Because most of my students are seniors, their future career plans are first and foremost on their minds. These students have incredible opportunities in front of them, if they ultimately chose a career in real estate, especially here in Texas.
When investing in commercial real estate, it is indeed a good strategy to buy low and sell high. But over the long run, successful (read: profitable) investing in income-producing real estate comes from the consistent production of income that you can actually put in your pocket.
There’s an old saying in real estate: “You make money when you buy, not when you sell.” Well, if that’s true, one can make more than a couple of strong arguments to buy real estate—now. Here are a four of my favorites.