Reno Grubb & Ellis to Become An Affiliate of Avison Young
Greetings,
It is with great pleasure that I announce our new affiliation with a national commercial real estate company called Avison Young. We have long been affiliated with Grubb & Ellis, but circumstances with their national organization have caused us to reevaluate our presence in the northern Nevada commercial real estate market. As a result, we have affiliated with this exciting commercial real estate company. Avison Young was originally based out of Toronto, Canada, but they have recently become the fastest growing commercial real estate company in North America. They now have a U.S. corporate headquarters in Chicago and have offices in almost every major market in the U.S. and Canada. Reno is their first affiliate office in the U.S., and we are very proud of that!
Click the link below to read a full article.
Have a good week.
Reed
Reed Simmons CCIM
Avison Young
Commercial Real Estate Back in the Saddle
Greetings,
I recently read an article called “Commercial Real Estate: Back in the Saddle?”, by John Levy. The link is below for the entire article, but the essence is the outlook for the commercial real estate industry in 2012 is positive. Why are we finally seeing a turn around? In two words: cheap financing.
Ten year fixed rate commercial financing is 5% or lower. In addition, mezzaning debt, which was as high as 13-15 percent in the fall of 2011, is now down to 9% over 5 years. Mezzanine debt is either junior to underlying debt or unsecured. Because there is higher risk for the lender, the interest rates are higher. Access to 9% mezzanine debt allows developers and company owners to expand and build. In turn, this causes the demand for commercial real estate to increase.
According to Mr. Levy, the multifamily market may be headed for a slow down. The reason is because the multifamily market has been largely driven by the abysmal residential real estate market, and that market is starting to experience its own turn around.
Reed
Good News Friday
Greetings,
Each week it seems like the search for good news gets easier. Have a good weekend.
Reed
Turning Point
I’m getting ready to leave my hotel room in Appleton, Wis. where, despite the early departure of the Packers from the NFL playoffs, the people are friendly, the cheese is tasty and the news is good. The local Grubb & Ellis office held its seventh annual forecast event yesterday evening, setting an attendance record. The recession was generally milder across Wisconsin thanks to the state’s manufacturing sector, which is benefiting from exports and strong growth in business capital spending. Click here to read a short article on the manufacturing sector released by Grubb & Ellis earlier this week.
Along with our local speakers, I shared the podium with Dr. Mark Eppli, Professor of Finance and Bell Chair in Real Estate at Marquette University. Dr. Eppli noted that the consensus forecast for U.S. GDP growth of 2.2 percent this year appears to be low. Right on cue, the lead story in the USA Today left on my doorstep this morning says, “A persistent drumbeat of unexpectedly positive job-market developments is leading to revised economic forecasts…” The latest such development is the decline in initial jobless claims to 358,000 for the week ending February 4. The four-week moving average, which smooths out the weekly volatility, is at its lowest level since April 26, 2008. Click here to read the full article.
There’s more good news in Section B, where the lead story, “Americans are making more these days,” says that median household income surged by a robust 4 percent in the last four months of 2011. Click here for the full article.
The growing manufacturing sector, increased hiring and faster income growth are excellent news for commercial real estate, specifically the industrial, office and retail sectors, respectively. Economic headwinds remain, notably the unresolved European debt crisis, the weak housing market and high levels of public debt. But the U.S. economy appears to be shaking off these constraints and could be poised for a cycle of stronger growth, prompting economists to mark up their forecasts.
Have a great weekend.
Best regards,
Bob
Turning Point
I’m getting ready to leave my hotel room in Appleton, Wis. where, despite the early departure of the Packers from the NFL playoffs, the people are friendly, the cheese is tasty and the news is good. The local Grubb & Ellis office held its seventh annual forecast event yesterday evening, setting an attendance record. The recession was generally milder across Wisconsin thanks to the state’s manufacturing sector, which is benefiting from exports and strong growth in business capital spending. Click here to read a short article on the manufacturing sector released by Grubb & Ellis earlier this week.
Along with our local speakers, I shared the podium with Dr. Mark Eppli, Professor of Finance and Bell Chair in Real Estate at Marquette University. Dr. Eppli noted that the consensus forecast for U.S. GDP growth of 2.2 percent this year appears to be low. Right on cue, the lead story in the USA Today left on my doorstep this morning says, “A persistent drumbeat of unexpectedly positive job-market developments is leading to revised economic forecasts…” The latest such development is the decline in initial jobless claims to 358,000 for the week ending February 4. The four-week moving average, which smooths out the weekly volatility, is at its lowest level since April 26, 2008. Click here to read the full article.
There’s more good news in Section B, where the lead story, “Americans are making more these days,” says that median household income surged by a robust 4 percent in the last four months of 2011. Click here for the full article.
The growing manufacturing sector, increased hiring and faster income growth are excellent news for commercial real estate, specifically the industrial, office and retail sectors, respectively. Economic headwinds remain, notably the unresolved European debt crisis, the weak housing market and high levels of public debt. But the U.S. economy appears to be shaking off these constraints and could be poised for a cycle of stronger growth, prompting economists to mark up their forecasts.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
Good News Friday
Greetings,
The news about the job market continues to improve. I listened to an economist yesterday discussing the public perception of the job market now compared to a year the beginning of 2008. At that time, the average person considered the economy healthy and jobs plentiful, but the outlook appeared gloomy. Now the average person considers jobs to be scarce and the economy still shaky, but the outlook is more optimistic. The Bureau of Labor Statistics continues to consistently report new net payroll jobs. Have a good weekend.
Reed
It’s All About Jobs
The labor market continued to improve in December as employers added 200,000 net new payroll jobs, according to the Bureau of Labor Statistics. Details of the report were encouraging:
- Gains were widespread, led by trade, transportation and utilities, up 90,000, and education and health services, up 29,000. Even the hard-hit construction sector added 17,000. Only the revenue-starved government sector lost jobs, a total of 12,000, which was less than October and November.
- Defying expectations for a slight increase, the unemployment rate sank again to 8.5 percent from November’s upwardly revised rate of 8.7 percent. The number of unemployed declined by 226,000 last month, mostly due to more people finding work but also due to a modest decline in the size of the labor force as discouraged job-seekers dropped out.
- The average workweek for employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in December.
- Average hourly earnings for employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.24. Over the past 12 months, average hourly earnings have increased by 2.1 percent.
Several other recent reports confirm an upward trend in the labor market:
- The number of Americans filing for their first week of unemployment benefits fell to 372,000 during the week ending December 31, a decline of 15,000 from the prior week. The four-week moving average, which smooths out the volatility in the data, fell to 373,250, its lowest level since June 2008. Levels below 400,000 signify an improving labor market.
- On Wednesday ADP reported that the labor market added a robust 325,000 jobs last month. Small businesses, a sector that has lagged in the recovery, accounted for 148,000 of those jobs. Although the ADP report, which is based on the company’s proprietary client payroll data, often does not mirror the monthly BLS numbers, the two tend to correlate over time.
- The Conference Board index of consumer confidence shows that consumers are becoming slightly more optimistic about the availability of jobs. The share of consumers finding jobs hard to get fell to 41.8 percent in December, down from 43.0 percent in November and the recent high of 49.4 percent in September.
Many analysts are suggesting that the U.S. economy and labor market can continue to improve despite the unfolding recession in Europe as long as the continent’s sovereign debt crisis does not hamstring the financial markets.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
Good News Friday
Greetings,
We are getting close to establishing a downward trend in initial jobless claims. Granted, it could be partly due to the holidays, but we are headed in the right direction.
Have a good weekend.
Reed
Good News Redux
For the second week in a row, the standout piece of good economic news is the decline in the number of Americans filing for their first week of unemployment benefits. Initial jobless claims, seasonally adjusted, fell sharply to 366,000 for the week ending December 10, down by 19,000 from the prior week. It is the lowest level since May 31, 2008. The four-week moving average, which smooths out the noise in the weekly data, fell to 387,750, the lowest since July 12, 2008. Readings below 400,000 generally indicate that the labor market is expanding. The two-week plunge in weekly claims suggests that the sharp drop in the unemployment rate last month from 9.0 to 8.6 percent was not a fluke. Granted, the weekly claims data are volatile especially around the holidays. Moreover, the unemployment rate and the number of long-term unemployed in the U.S. – 5.7 million who have been without work 27 weeks or longer – remain far too high. But recent trends in the data suggest the labor market is starting to shake off its multi-year torpor.
More good news: inflation as measured by the consumer price index remains in check – unchanged in November on the heels of a 0.1 percent drop in October. Year-over-year rates remain a bit high at 3.4 percent overall and 2.2 percent excluding the volatile food and energy categories (a concept called core inflation). Inflation is expected to subside in the months ahead.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
Good News Friday
Greetings,
As Robert Bach indicates in his weekly economic report, we can look at this news from a glass is half full viewpoint or from a half empty viewpoint. The half full makes more sense. You have probably heard or read about this jobs report in the news, so you have also probably heard them say this is not nearly enough jobs to get us back to a balanced economy. That’s like seeing a new 747 midway on the assembly line and saying this plane is not in any shape to fly us to Europe! It’s a work in progress, as is our economy!
Have a good weekend.
Reed
Glass Half Full
This morning’s report on November employment from the Bureau of Labor Statistics could be taken from a glass-half-full or glass-half-empty perspective. This being “Good News Friday,” we’ll take the half-full view. Employers added 120,000 net new payroll jobs in November while the totals for September and October were revised higher by a combined 72,000 according to the BLS’s survey of business establishments. Leading sectors included retail sales (+49,800), professional and business services (+33,000) and education and health services (+27,000) while government subtracted 22,000.
More surprisingly, the companion household survey revealed that the unemployment rate slipped dramatically from 9.0 to 8.6 percent last month, its lowest level since March 2009. The sharp decline was caused by two factors: the number of employed increased by 278,000 – a good thing – while the labor force shrank by 315,000 as people gave up looking – not so good. The household survey includes self-employed and so does a better job of detecting the early stages of a recovery, but the sample size is smaller so the margin of error is higher.
A couple of other studies suggest that small businesses, which were hit hard by the recession, may be starting to hire again. The National Federation of Independent Business reported a slight increase in the average number of workers per firm, the first gain in nearly half a year. Moreover, a net 7 percent of small business owners plan to create new jobs over the next three months, the highest reading in 38 months.
On Wednesday ADP reported that the labor market added a better-than-expected 206,000 jobs last month. Significantly, small businesses (fewer than 49 employees) added 110,000 of those jobs. Although the ADP report, which is based on the company’s proprietary client data, often does not mirror the monthly BLS numbers, the two correlate closely over time.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
Good News Friday
Greetings,
On the Mend
The economy may be sluggish, but Grubb & Ellis researchers have been anything but as we crank out our year-end Forecast reports. We’ve been uncovering some upbeat market intelligence along the way. For example, the West South Central region – Texas, Oklahoma, Arkansas and Louisiana – has recovered 82 percent of the jobs lost during the Great Recession compared with the national average of 25 percent, giving it the strongest momentum of any region in the country. Oil and technology, big drivers of global growth for the next few years, are powering the region’s metropolitan areas including Houston at 92 percent and Austin at 121 percent, making it the nation’s only large metro to surpass its pre-recession peak.
Even in slower growing regions, there are overachievers. San Jose (think technology) leads the Pacific region with a recovery rate of 48 percent. In the East South Central region, Nashville has recovered 59 percent, and in the East North Central region, it’s Madison, Wis. at 63 percent. Education and health care have boosted the outlook in both of those markets. In the Middle Atlantic states, Pittsburgh leads at 71 percent – think energy, education, health care and manufacturing. And in the South Atlantic states, ravaged by the housing bust, Myrtle Beach, S.C. has regained 46 percent of its lost jobs thanks to a rebound in tourism.
There are other success stories around the country where local economies and markets show promise heading into 2012, and we will uncover those opportunities for you in our Forecast. Watch for it on January 3rd.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
