Posts Tagged ‘twin cities’
Thursday, May 16th, 2013
A press release from the Minnesota Department of Employment and Economic Development (DEED) highlighted 11,400 jobs lost statewide in April of this year. The largest losses occurred in trade, transportation, utilities, and government sectors. The information, education, and health care sectors all grew during the month.
DEED May 2013 Jobs Report
The Twin Cities Metro Area has bucked the statewide trend, having added 26,000 jobs over the past year. A market report by Marcus & Millichap predicts that the metro will add 49,000 jobs during 2013, of which a significant number will be in the health services sector. This employment growth, couple with stronger renter demand, has kept multifamily vacancy in the range of 2.5%, among the lowest rates in the nation.
The Twin Cities metro has added jobs every year since 2009 (source: Marcus & Milllichap)
Multifamily vacancy has remained low despite increasing supply (source: Marcus & Millichap)
Tags: DEED, jobs, Marcus & Millichap, Minnesota, twin cities
Posted in Industry News, Multifamily, Twin Cities Real Estate | No Comments »
Sunday, June 5th, 2011
Academic researchers who study social, behavioral, and organizational psychology have spent the previous decade studying how people make judgement about people they meet. Some of these researchers believe that your brain, specifically the emotional centers, work incredibly fast to make snap judgements about people, a trait that was crucial in our species history, when ascertaining friend from foe was often a life threatening decision. The common phrases for these experiences are “gut feeling” and “a hunch”, and contradictory to the general belief that these emotions are irrational, scientists are increasingly discovering that they are actually the product of an incredibly complex system of sensory analysis, memory, and a syntax that follows a precise logical argument. This insight becomes all the more powerful when one begins to realize just how accurate that gut feeling is when the situation is appropriate.
Considering the opening paragraph of this interview, it is without surprise that Ms. Halligan makes a significant first impression, worthy of the pretense. Very confident, driven, intelligent, well spoken, and conscientious are the gut feeling(s) I experienced when Ms. Halligan began answering my questions. Aileen’s career, education, and goals are all reflective of these traits, and it would appear a solid bet that her future holds plenty of successes.
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Tags: Careers, Commercial Real Estate, deals, industrial development, local real estate, minneapolis, mortgage, MSRE, news, real estate, Real Estate Careers, real estate grad degree, st thomas, student interview, student profile, trends, twin cities, UST MSRE Program, UST real estate
Posted in Commercial Real Estate, Real Estate Matters - Interview, Real Estate Programs, Uncategorized, UST Student Profile | No Comments »
Wednesday, May 25th, 2011
“The (best part of the UST MSRE program is the…) whole package; having industry experts as guest speakers, hearing their stories, and learning, first hand, their opinion’s on the major issues facing the real estate industry. Furthermore, the overall connection to the real estate community as a whole is superb. These connections will set me up for success in any endeavor I choose. I have had an excellent experience in the program and would recommend it to others in the real estate industry. The UST and MSRE program’s reputation in the industry is top of the line.”
Real Estate Matters has had the opportunity to sit down with several MSRE students in the graduating class of 2011 and get their impressions of the program, their plans for the future, and their advice to perspective students as their time in the MSRE program draws to a close. The first 2011 graduate, Lane Thor, has been working at the Ramsey County Assessors Office as an Appraiser. Lane was kind enough to take a few minutes out of his busy schedule to answer a few questions for us.
What is your background and experience?
I grew up in St. Paul, and have lived in Lino Lakes since 2006. I earned my undergraduate degree at Hamline University in St. Paul, where I majored in Political Science. I was fortunate enough to play football for Hamline while I was a student there, which provided a great opportunity to learn valuable lessons about life, responsibility, and leadership.
So who do you route for in the MIAC?
I have to route for Hamline. But I promise, I alway route for St. Thomas to win. If they play Hamline I just hope for a tie…
Where have you worked since earning your undergraduate degree?
I am fortunate, in that my first job out of school is one I have really enjoyed. I began working at the Ramsey County Assessors Office in 2006. My day-to-day duties involve the appraisal of real estate for tax purposes. I specialize in residential property and am currently one of 52 appraisers working for Ramsey County. The thing I like most about the job is the unique nature of each property. Each property presents new challenges and opportunities for me every day. As an undergrad I was interested in getting into business law, but after a few law classes I changed my mind. My passion for public sector work, especially the parts of the government that support the real estate industry, has remained which makes my current position a great fit for me. Also, my job affords me the opportunity to keep a healthy work-life balance, which is something that is very important to me.
Why did you decide to get an MSRE, and how did you choose UST?
I wanted to strengthen my skill set and knowledge of real estate issues to compliment my current background, with the goal of having more opportunities in the field of real estate. Looking back on my time in the program I can definitely say that I have broadened my skill set and given myself many new and exciting options. Furthermore, my sophistication in real estate has increased two fold, (1) I have learned more about the theoretical aspects of the real estate industry than I ever imagined, and (2) I was pleasantly surprised at the amount of practical knowledge I gained, with regard to the different aspects of real estate. I am certain that this experience will benefit me in any area of real estate that I get into.
I chose St. Thomas, because the program and the school is regarded in the Twin Cities, as the gold standard in real estate education. UST has an extensive professional network, including the real estate advisory board, which is basically all the heavy hitters in the Twin Cities real estate industry. I looked at a few other programs but ultimately chose UST because I wanted to have classroom experience - that personal level, face-to-face contact with my professors and peers is important for me. Because of this I have built life long friendships. The small class sizes have allowed me to meet everyone and make valuable connections. The classroom experience and the relationships that stem from this structure is what brought me to UST.
What is the best part of the program?
The whole package – having industry experts as guest speakers, hearing their stories, and getting first hand opinion’s on the major issues facing the real estate industry. Furthermore, the overall connection to the real estate community as a whole is superb and will set me up for success in any endeavor I choose. I have had an excellent experience in the program and would recommend it to others in the real estate industry. The UST and MSRE program’s reputation in the industry is top of the line.
Do you have some advice for perspective students?
If you have a passion for real estate, this will be a great opportunity. As with any graduate degree program, the workload gets heavy at times. But, if you have taken the time to prepare for the program, taken the GMAT, etc. you will find a way to manage the out of classroom work. This program is great for people who love real estate.
What are your career goals?
Right now, I am working on a couple of ideas that I have been formulating for a long time. I wanted to wait until I graduate before I really focused on one plan, as I needed to really see what was involved in each part of the industry, and where my passions really were. I think for the long-term, I would like to go into business for myself. . For the time being, I will continue to pursue high level positions in the public sector dealing with real estate or real estate related issues. After I get settled in, I would like to begin my own business, doing both at the same time, public sector and private. My private business will consist of a full service real estate company focusing solely on niche markets that have not been tapped. With good marketing and perseverance there is a lot of upside to some areas that remain untouched.
What is the best advice you have ever received?
At Hamline, my football coach told me to be successful you need to surround yourself with the right people. That means making the right connections, having the right network, as well as putting good people near you. At UST you get that, professors who are helping you and working so you succeed. My new network is due in large part to UST. This alone has made my decision to enter the MSRE program a great one and makes me very excited as I look forward to my future career.
Real Estate Matters would like to thank Lane Thor for taking the time to share his insight and experience in the MSRE program. We would also like to congratulate him on his graduation and look forward to keeping track of his promising career. To find out more information about the UST MSRE program, please visit our website.
Tags: Careers, Commercial Real Estate, deals, economy, local real estate, minneapolis, MSRE, real estate, Real Estate Appraisal, Real Estate Careers, real estate grad degree, Residential Real Estate, st thomas, student interview, student profile, twin cities, UST MSRE Program, UST real estate
Posted in Appraisal, Real Estate Matters - Interview, Real Estate Programs, Uncategorized, UST Student Profile | No Comments »
Tuesday, May 17th, 2011
Yes. Although we are academics and we spent more time reading through investment prospectuses and development plans than watching Sports Center, we are well aware there is no left field in football. However, after the lackluster performance of the Purple and Gold last year, Mr. Wilf and Co. may want to look to their peers on the other side of downtown (the ones who do have a left field). Despite the sluggish start for the Twins (there is still time!), one thing is certainly not subpar about Minnesota sports currently, and that is Target Field. By any standards, the eight acres that only five years ago was a parking lot, is now one of those landmark buildings that represents the identity of the entire state. All good buildings, businesses, ideas, etc. start somewhere, with someone, and even though everyone probably has had thousands of big ideas, few people get to see them realized. That is the hard part about great ideas, plainly put, it’s really hard to turn them into anything. The men who came up with the idea for Target Field, Bruce Lambrecht & Dave Albersman spent years working on moving the Twins to, what is now Target Field. (for that story click here). lucky enough for the Vikings, the same two men are fired up and at it again. Lets just hope the Vikings, and the politicians who are responsible for this decision, decide to pay attention.
Proposed Stadium at the Farmers Market Site, courtesy of Bruce Lambrecht
The similarities between the Viking’s current situation and the Twin’s search for a new home are eerily similar. The Vikings have, for several years, voiced concerns about playing in the Metrodome, and were fairly clear that they were not interested in renewing their lease at the Metrodome. The “fairly” was clearly removed on December 12th, of last year when this happened… During the offseason several plans have emerged, and sites proposed for development of a new stadium. Recently, the talk has been narrowed down to three sites, (1) Rebuilding on the current Metrodome property, (2) A stadium in Arden Hills, a suburb 10 miles north of St. Paul, and (3) Developing a site near Target Field, on what is now a series of small buildings, storage facilities, and the Minneapolis farmers market. Mr. Lambrecht and Mr. Albersman are the driving force behind the third option, and have begun the same arduous process that the probably swore they would never start again. Each of the three site has positives and challenges, and will undoubtably require a great deal of planning and foresight if anyone is going to become nearly as successful as Target Field.
The first major battle, and the one that causes the strongest emotions is who, how, and what will pay for this project. Two recent studies looked at the total cost of developing, building, and creating the infrastructure necessary for the project, Finance & Commerce reports,
An analysis from the Metropolitan Sports Facilities Commission says the “hard and soft” construction costs for the Metrodome and Arden Hills sites are about the same – $825 million for the dome site, $859 million for Arden Hills. However, the Arden Hills location would require up to $339.5 million in highway, parking, pedestrian access and utility improvements, which brings the total price tag to $1.2 billion, the analysis said. By contrast, the Metrodome location needs a far more modest $29.9 million in such improvements, for a total cost of $895 million. Also on Tuesday, Gov. Mark Dayton released the findings of a separate analysis that says it would cost up to $240 million for the transportation improvements needed to accommodate the Arden Hills location. Dayton said any state contribution to the project would be capped at $300 million – including the cost of road improvements.
“I support the project in either location up to that amount,” Dayton said. “If one project is more expensive than the other, the Vikings are going to have to make up that difference unless the local partner does.” To read the entire story click here
Although the Farmers Market site was not included in this study, Mr. Lambrecht has provided estimates that would place the total cost of the site in the same range as the Metrodome. It is also important to note that at this point in the search for a new Twins Ballpark, Mr. Lambrecht’s parking lot was barely even in consideration. The key behind Mr. Lambrecht’s plan is the same as it was for Target Field, in that an accessible urban sports venue is valuable to everyone in the state, even those who could care less about football. Mr. Lambrecht was right the first time, and has since quieted almost everyone of the many critics, who thought a new Twins stadium was too expensive, the site was too small, and any other reason imaginable. For everyone’s sake, let’s hope he is able to repeat history, and make lightning strike twice in the heart of downtown Minneapolis.
This is the first in a series of stories about this topic, which is sure to dominate headlines in the sports, real estate, local/metro, and front page of the states newspapers (if anyone still reads them…) Check back for more.
Tags: cash, Commercial Real Estate, deals, Downtown entertainment, Downtown Minneapolis, economy, football, investors, local real estate, minneapolis, news, nfl, real estate, real estate development, Target Field, trends, twin cities, twins stadium, vikings, vikings stadium
Posted in Development, Industry News, Real Estate Trends | No Comments »
Friday, April 22nd, 2011
Boyd Stofer - CEO Marquette Group
“No one was doing anything, I mean no one was even talking about starting a new project. Sure I was scared, we paid too much for the building during the worst real estate market in my lifetime. However, we needed to play offense, someone had to make the first move, and it was us. That got a lot of attention, and we were able to get the building 90% leased before we started renovation, that’s just unheard of, and it worked to our benefit.”
The quotation above does a superb job in summing up the career, strategy, and philosophy of Boyd Stofer, president and CEO of the Marquette Real Estate Group. Over the past 32 years, Mr. Stofer has helped United Properties (Now part of the Marquette Group) grow into one of the most successful and profitable real estate development companies in the country. Attending a lecture from Mr. Stofer is somewhat like listening to a Harvard (one of his Ivy degrees) Economics professor give a semesters worth of lectures fast forwarded to a speed that condenses the information into one hour. During his talk it appeared as if he continued to talk as he inhaled, and didn’t miss a beat or misstate a figure as he outlined the micro and macro forces that are effecting the national commercial real estate market. His charisma stems directly from his incredible intelligence and ability to conceptualize and connect the vast set of variables that made up the contents of his talk, ending with the weaving of details to present the Marquette Group’s current standing and plans for the future. It’s no wonder that the Pohlad Family entrusts Mr. Stofer with a significant share of their fortune, as very few individuals can impart their razor sharp intellect and cunning in such a succinct and complete manor. It is highly unlikely that anyone in the room (full of real estate professionals, academics, and students) walked out questioning Mr. Stofer’s understanding of the real estate market, actually, it highly unlikely that anyone who meets him ever has doubtful thoughts.
Biography |
Mr. Stofer’s educational credentials mimics his career as nothing short of top tier. In 1971 he graduated from the Cornell School of Engineering, and followed it up with an MBA with Honors from Harvard. Immediately following his MBA program, Mr. Stofer was hired by Hines Interests, a national real estate development group based in Houston. After three years in Houston Mr. Stofer left and came to Minneapolis to join United Properties, then owned by the Hamm family. Since his hire, Mr. Stofer has led the companies development initiatives, and has amassed an amazing portfolio of work. In 1996 he was named president and CEO, since that time Mr. Stofer has grown and merged United Properties into what is now the Marquette Group. Today, the combined entities of the Marquette group employ over 1,000 people, has assets around $750M and services more than $40B worth of real estate loans. The current operational structure of the Marquette Group is the culmination of Mr. Stofer’s vision for a vertically integrated property firm that is unique in the services that it can provide. The vast array of real estate products that Marquette Group is far from novel, in fact it is probably the firms best financial hedge, in that the organization is prepared and capable of earning revenues in any market and any economic climate.
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Tags: Boyd Stofer, Careers, Commercial Real Estate, deals, development case study, Downtown Minneapolis, economy, industrial development, investors, local real estate, Marquette Companies, minneapolis, mortgage, news, Pohlad Family, real estate, real estate bubble, Real Estate Careers, real estate development, recession, Retail Property Management, Target Field, trends, twin cities, twins stadium
Posted in Commercial Real Estate, Development, Executive Insight Series, Industry News, Property Management, Real Estate Trends, Residential Real Estate, Retail Real Estate | No Comments »
Tuesday, April 12th, 2011
A collection of the most important stories this week that are making headlines in the real estate industry
From the Chicago Tribune | Home improvement sales rebound- Lowe’s, the nations second largest home improvement retailer, is reporting a 15% increase in seasonal hiring, a sign that the home improvement business is stabilizing ahead of the greater real estate industry. This appears to be another strange aftereffect of the real estate crisis, with the article attributing the increase in home improvements to existing home owners opting to fix up their old homes, as opposed to buying a new home. Overall 1Q 2011 spending is expected to increase 9.1% to $125.1 billion.
From Calculated Risk | CoreLogic- House prices declined 2.7% in February, prices now 4.1% below 2009 lows- The bottom of the slide in housing prices is still being determined, as the most recent numbers from CoreLogic paint a dreary picture for potential home sellers. Overall, the mean selling price of homes across the country continues to plummet, with a decline of 6.7% in February 2011 compared to February 2010. However, as this blog and many other real estate analysts are pointing out, the news isn’t as grim when the market is properly quantified. Currently the percentage of distressed homes being sold is significantly higher than market averages, causing an overall decline in the mean home prices across the country. According to Mark Fleming, chief economist with CoreLogic.
“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets. Price declines are increasingly isolated to the distressed segment of thee market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”
CoreLogic has adjusted figures (which exclude the sale of distressed properties) showing a decline of .1% over the same period, which continues a trend towards stabilization and hopefully indicates positive gains in home owners equity moving forward. to read the entire report click here.
From the Star Tribune | Almost half of all March closed home sales in the Twin Cities were foreclosures- Relating to the previous article, the Star Tribune reports that 43% of home sales in March were distressed properties. This sent the median home price into a nosedive, dropping 15% to $140,000, however excluding distressed properties, the picture is a little brighter. Looking at previous March sales, without including 2010 (the new home owner tax credit created unusual demand), sales in March 2011 were up 6% and 15% for 2009 and 2008 respectively.
From the Wall Street Journal | Malls face surge in vacancies- From a record low vacancy rate of 5.1% in 2005 to todays less rosy 9.1%, mall owners are facing increased pressure due to the changing shopping behavior of Americans, as well a loss of customers in the exurbs of America’s largest cities. One segment that appears to be regaining traction is the upscale mall industry, that has reduced its nationwide vacancy to 7%, although this is still above what is considered healthy in the sector. As technology and connectivity spreads to more individuals, retailers will be forced to ask serious questions about their business models, and the need for massive retail space in as many locations as possible.
Tags: cash, Commercial Real Estate, Downtown Minneapolis, economy, industrial development, investors, local real estate, minneapolis, mortgage, news, real estate, real estate bubble, real estate development, recession, trends, twin cities, UST real estate
Posted in Commercial Real Estate, Industry News, Property Management, Real Estate Trends, Residential Real Estate, Retail Real Estate, Uncategorized | No Comments »
Thursday, April 7th, 2011
Bob Lux- Principal at Alatus Development
“So, what is the plan for Block E?”
A simple question that was definitely on every attendee’s mind at the most recent Real Estate Executive Insight Series. However, the answer isn’t so simple, and if it were not for Bob Lux’s (principal at Alatus LLC) charisma, intelligence, and experience in leading major, press-worthy development projects the answer might not have been as well received. As any gifted public figure would, Mr. Lux skirted the question, but in his sidestep, alluded to several important things concerning the future of Block E, as well as the kind of person Mr. Lux is. Before his answer can be assessed properly, it is important to understand Mr. Lux’s history, professional accomplishments, and his philosophy on development (and life).
Mr. Lux grew up in a Long Prairie, a small community in central Minnesota, a town that most likely does not have a building higher than the many crop silos that dot the agrarian landscape. Like many young men from small towns, Mr. Lux left home in search of success and the experience that can only be found in the “big city”. After earning his degree in Business Administration from the University of Minnesota, Mr. Lux returned to Long Prairie with the intention of starting a home building business in the area. He purchased a lumber yard with his father and began building farmers homesteads in the immediate area. Although this was quite different than the projects he would eventually oversee, Mr. Lux quickly learned the importance of adding value to differentiate his product, otherwise it would simply be a commodity.
After a short time at home the urge to return to city life became to great to resist, and once again, Mr. Lux left Long Prairie for the Twin Cities. His first employer, The Dominium Group, was developing high-density suburban real estate, which faced major issues surrounding obtaining approval from the community and local government for the rezoning of land for this use. Suburban homeowners are very protective of their communities, and the amount of space that each homesite has was a reflection of the owners desire for privacy and quiet living. Mr. Lux’s first assignment was in Eagan, MN, where he faced opposition form the mayor as well as landowners surrounding the proposed site. To change the attitudes of the landowners surrounding the site, who were a critical stakeholder in the success of the project, Mr. Lux used a mixture of logic, emotional appeal, and financial acumen to reach out to each of the parties and work with them to develop a compromised plan that met the needs of everyone. In the end this project was approved, and through it, Mr. Lux learned one of the key lessons that has helped him throughout his career. During the lecture, he repeatedly cited the ability to listen to, and connect with people as the most important skill he has, and the main reason why projects fail or succeed.
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Tags: Careers, cash, Commercial Real Estate, deals, development case study, Downtown entertainment, Downtown Minneapolis, economy, investors, local real estate, minneapolis, MSRE, news, real estate, real estate bubble, Real Estate Careers, real estate development, real estate grad degree, recession, st thomas, Target Field, trends, twin cities, UST MSRE Program, UST real estate
Posted in Commercial Real Estate, Development, Executive Insight Series, Industry News, Real Estate Trends, Residential Real Estate, Retail Real Estate, Uncategorized | No Comments »
Friday, April 1st, 2011
The short history of the building currently occupying the 600 block of Hennepin, know commonly as Block E, in downtown Minneapolis is a staggeringly accurate metaphor paralleling the last decade of the greater real estate market. According to Minneapolis St. Paul Business Journal, the original cost of developing the site in 2001 (less the $36.25 million spent on the Graves Hotel which did not change ownership) was $105.75 million. When Alatus Development purchased the development in July, 2010 they paid a paltry $14 million, or roughly 13.23% of the original price. At the risk free rate of return (based on the 10 year T-bill which average 4.42% over the period) the investment in Block E would be worth $162.973 million, resulting in a savings of $148.973 million for Alatus in todays value. This investment appears to be a no brainer, but it is not without risk. Since opening, Block E has lost most of the anchor businesses that originally signed leases in the space including: Borders Books, Game Works, The Hard Rock Cafe, Applebees, and Hooters. The space which Game Works and Borders occupied is still vacant, presenting Alatus and Bob Lux, the lead developer on the project, with significant challenges in their attempt to turn the site into a successful retail operation. That said, the final price tag for the site was too attractive to pass on.
One significant factor that helped persuade Mr. Lux to move forward with the deal is the 550 heated underground parking spaces beneath Block E, at $25,455 per spot is inline with other parking structures around the city. Looking at the deal from this perspective, Alatus paid market rate for the parking, and got a deal sweetener that is quite impressive, approximately 213,000 sq/ft of retail space. Pricing it the other way, at $66 sq/ft, the retail space was purchased at a price that is almost inconceivable given Block E’s location at the heart of the downtown district and within walking distance of Target Field, The Target Center, and many of Minneapolis’s theaters and restaurants. Despite the obvious advantages in location, the previous owners at Block E have had serious difficulty maintaining profitable levels of business. Trying to figure out what to do with this space will certainly keep Mr. Lux up at night, until a solution that provides long term tenants can be derived. (more…)
Tags: Block E, Bob Lux, Careers, cash, casino, Commercial Real Estate, deals, development case study, Downtown entertainment, Downtown Minneapolis, economy, gambling, investors, local real estate, minneapolis, minneapolis history, mortgage, MSRE, news, real estate, real estate bubble, real estate development, recession, st thomas, state deficit, Target Field, taxes, trends, twin cities, UST MSRE Program
Posted in Commercial Real Estate, Development, Executive Insight Series, Industry News, Minnesota Real Estate Journal, Real Estate Trends, Retail Real Estate, Uncategorized, Upcoming Industry Events, Upcoming UST Events | No Comments »
Wednesday, March 23rd, 2011
Enjoy this list of articles and resources to ensure that you are up to date on the stories that are making headlines in the real estate industry
From Calculated Risk | Census 2010 Housing and Occupancy Data- The Census Bureau has released occupancy data from the 2010 census for 42 of the 50 states. This information is useful to gauge the extent of vacancies on a national and state level, and provide a trove of information for time series analysis. The article has an xls file of the data, as well as links to the Census website for more research. Finance and Commerce has a follow up to this story, in which they report exclusively on the vacancy and occupancy rates in the Minnesota market.
From Project Syndicate | Bubble Spotting- An interesting article by Robert Schiller (cofounder of the Case-Schiller index) who shares his predictions of the next equity bubble, even though he points out several times in the article that predicting such events are nearly impossible. Despite this, he outlines several well reasoned arguments and points out some interesting correlations in market behavior.
From WSJ and NAR
From The Wall Street Journal | Discounts Expected in Spring Market- A nationwide drop in housing sales and median home prices is not great news for the real estate market. However, looking at a more positive repercussion of this trend is enticing potential buyers off the fence with low borrowing rates, and prices that match the market realistic valuation of the property.
From Minneapolis Area Association of Realtors | Weekly Market Activity Report- Get the latest numbers on the twin cities housing market, as well as trends and analysis from MAAR.
From Finance and Commerce | Troubled Assets ‘Still Quite Plentiful’ in CRE Market- Finance and Commerce reports on the high volume of CRE inventory classified as distressed debt. Although there are many challenges for buyers and sellers in this market, there is also tremendous upside, due to the deep discounts available. With the right strategy, and enough equity to qualify for bank financing, investors have a huge opportunity to earn strong returns in the market.
From the NYT and HSH Associates
From The New York Times | More Borrowers Are Opting for Adjustable-Rate Mortgages- Pinpointed as one of the major causes of the record breaking number of foreclosures over the past three years, ARM’s have been shunned and avoided by recent home buyers. However, this trend is reversing, as banks are beginning to offer more conservative ARM’s that do not include any of the gimmicks that enticed unqualified buyers to borrow too much money. The shift towards marketing ARM’s as a prime investment option for high credit borrowers is a positive sign that lenders and buyers appear to have learned some lessons from the last crisis.
Tags: Commercial Real Estate, deals, economy, investors, local real estate, minneapolis, mortgage, news, real estate, real estate bubble, real estate development, recession, st thomas, trends, twin cities
Posted in Industry News, Real Estate Trends, Uncategorized | No Comments »
Thursday, March 17th, 2011
“Never waste a crisis, they all have opportunity.”
It is a common occurrence during difficult times, and there is something very human about perceiving the current situation and lamenting that it is the worst or most extreme crisis in history. Although most of the time this can be chalked up to theatrics or over reaction after hearing Mr. Andy Deckas, President of Founders Properties,
Moody's CPPI -- Pre and Post Bubble
speak about what happened in commercial real estate (CRE) over the past seven years, one can only hope that he is correct in his analysis that, at least for CRE, the market is moving forward and recovering from the difficulties of the last few years. Mr. Deckas gave a superb analysis of the root causes of CRE bubble, using a combination of personal narrative and hard data to support his claim, while being very specific in the way he defined the crisis in the context of the greater economy, and the world in general. His labeling of the fluctuations in CRE market, as the worst in history, based on the criteria of loss of equity, disruption of the industry, and systemic implications on the greater economy quantifies his claim, and despite the pitfalls of making such sweeping assertions, seems to be reasonable. Despite Mr. Deckas’s sober analysis of the recent state of the CRE market, his presentation had a positive tone that included optimism about current opportunities, as well as providing a recap of his fascinating career in the industry.
Resume | Mr. Deckas’s credentials as a commercial investor date back to beginning of the industry, when financial professionals were just realizing the value of securitizing CRE. Mr. Deckas earned his BA from Northwestern University, and planned on continuing his education by earning an MBA until he received an offer that he could not refuse. A personal connection encouraged Mr. Deckas to contact Tom Crawley, who was an executive at Heitman Financial. Mr. Crawley’s pitch was simple, come work for me, and in two years I promise you will learn more than you ever could about CRE in academia. Mr. Deckas agreed, and part of his initial responsibilities included working on raising the capital needed to construct the Mall of America. After nine years moving up through the ranks at Heitman, Mr. Deckas left the firm and moved to OPUS, which at the time was one of the nations largest real estate developers. His first role at OPUS was creating and growing OPUS financing operation. At OPUS, Mr. Deckas moved the focus of there customer targeting from institutional investors, which were flush with capital but also with a highly bureaucratic structure that impeded flexibility, to high net worth, private equity. It was here that Mr. Deckas found an untapped niche of the market, linking investors eager to increase returns, with securities that offered high upside, with (at the time) minimal risk. Mr. Deckas’s final move brought him to Founders Properties, were he serves as the President of Operations.
The resume that Mr. Deckas possesses, especially the quick ascension to the c-suite in every firm he worked for, provides credibility for his opinions and the analysis of the situation on a macro level. Raising capital for funds in the $100M-$200M dollar range places Mr. Deckas in a unique echelon of individuals who were present in the board rooms and at the job sites of developments that represented the center of the looming decline of the industry
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Tags: Careers, cash, Commercial Real Estate, deals, economy, industrial development, investors, local real estate, minneapolis, mortgage, news, real estate, real estate bubble, real estate development, recession, twin cities, UST MSRE Program, UST real estate
Posted in Development, Industry News, Property Management, Real Estate Trends, Retail Real Estate, Uncategorized | 1 Comment »
