Green Street

Heard on the Beach: Will the Cure Be Worse Than the Disease?

Rising real rates do damage to values, while higher inflation is benign. That this year’s rate spike has been primarily a function of higher real rates explains the weak start to the year. Seldom has the range of economic possibilities been as varied as it is today. Recession odds are up even as interest rates have jumped in reaction to the release of the inflation genie. The spike in yields has clobbered REIT share prices this year, and property prices have begun to drift lower. Today’s investment professionals lack experience to help assess the impact that stubborn inflation might have on real estate, but lessons from past interest rate/inflation scares offer insight.  

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Heard on the Beach: Herd Community

Pandemic-era uncertainty surrounding remote work, fiscal health, and politics suggest a wide range of potential outcomes for big cities. These factors may upend the long running megatrend toward urbanization, which carries implications for Sun Belt versus gateway market dynamics and the urban-suburban balance within metros. Recent market-level employment trends are tightly-linked with WFH utilization rates. And a tail risk worth exploring is the potential for San Francisco or NYC to follow Detroit’s path.

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Real Estate Alert: May Special Issue

Non-performing commercial real estate debt on the biggest banks’ balance sheets doubled last year, but remains a sliver of total holdings – dashing hopes of   a buying spree for opportunistic investors. The level of troubled debt is expected to tick higher, stoking optimism that more distressed opportunities could shake loose down the road.  

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Commercial Mortgage Alert: Featured Issue

Commercial Mortgage Alert, one of Green Street’s four weekly News publications, conveys the earliest look at today’s commercial MBS and traditional real estate debt markets. Highlights from this issue include REIT-Bond Volume Reaches Historic Highs, CMBS Pros Sharply Split on Spread Outlook, Crisis Complicates BofA Syndication Effort, RANKINGS: Risk-Retention Holders, REIT Bookrunners.

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Real Estate Alert: Featured Issue

Real Estate Alert, one of Green Street’s four weekly News publications, provides exclusive intelligence on behind-the-scenes deals and dealmakers in today's commercial property market. Highlights from this issue include Total Sales Down 39%; CBRE On Top at Half, Retail Sales Plunge 54%; Eastdil Holds Lead, 3 Seattle-Area Development Deals on Market, RANKINGS: Overall, Retail.

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Property Insights: Unrequited Love

Institutional real estate investors upped their bets on gateway markets in recent decades in the belief that urbanization and supply constraints warrant premium pricing. The strategy worked until New York City’s struggles began in the middle of last decade. The structural forces that slowed the Big Apple have been exacerbated by the Covid pandemic and are increasingly evident in the other gateway markets.

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