Top Takeaways from GSU’s Views From the Top 2017

Top Takeaways from GSU’s Views From the Top 2017

3 years ago 0 0 1972

Each year, I start the new year with an economic conference hosted by Georgia State University’s Department of Real Estate, and it rarely disappoints. This year was no different. Views From the Top 2017: “Connectivity & Atlanta’s Urban Transformation” delivered insightful viewpoints on a variety of economic topics. First up was Sun Trust Economist KC Conway. Here were his top comments: Real estate sector predictions: Housing and Industrial are real estate’s strongest sectors, with commercial storage and manufactured housing yielding the best returns. Retail is regressing, and Hotel is overbuilt with declining values. Cost for new or renovated Office space is extremely high. Atlanta + Southeast predictions: The Southeast region, including Atlanta, will outperform the nation in 2017. Atlanta will continue to be plagued by traffic This is a “Must Solve” problem. Millennials will move elsewhere if not resolved, resulting in stymied growth. General insights: Capital for commercial real estate

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2017: A Mature Market

3 years ago 0 0 1784

Entering 2017, the investment community finds itself in a Mature Market. Gone are the days of distressed sellers, foreclosures and properties which could be purchased at steep discounts. Today, properties are cash-flowing, occupancies are high and rents have recovered to peak levels. Combined with cheap debt and investors flush with yield-driven capital, the result is fewer opportunities coupled with property values at pre-recession levels (or, in some instances, even higher). So, what happens when investment opportunities diminish and the market tightens?  Development becomes an increasingly attractive option for value-added investing. Historically, seven years into a recovery, speculative development has already begun, but that has not been the case. This cycle is unique for several reasons: The depth of the recession The impact of  new regulations on financial institutions The headwinds to demand created by online retailing and office-sharing concepts To be sure, infill, mixed-use urban retail concepts; mega, mixed-use projects

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When Will Rising Interest Rates Impact Investment Decisions?

3 years ago 0 0 1483

Here’s my response to the recent Globe St. article, “When Will Rising Interest Rates Impact Investment Decisions?” based on an interview with Real Capital Markets’ COO Tina Lichens. Interest rates are still low by historical standards. With so much capital continuing to search for opportunities, I see little impact on investment decisions for the short term. I do agree that good opportunities will outweigh a higher cost for debt in the long run. That being said, rising rates will have a greater impact on the small private investor (syndicator) who is organizing his capital for every deal and is more return-sensitive.

Why You Need a Real Estate Advisor on Your Wealth Management Team

3 years ago 0 0 1629

As the end of 2016 quickly approaches and you ponder year-end donations and 2017 financial objectives, you should consider if you need someone to help you reach your goals—or to advise you on what those goals should be. Let’s take a look at your team. The Coach The Coach develops a game plan based on circumstances. Do you become your own coach, or do you consult with a wealth manager or financial planner to mold your circumstances and financial objectives into an effective financial plan? This is the first big call. The Roster Then, you must ask yourself: Who should be my team players? A typical team consists of a financial advisor, an investment manager, a CPA, an insurance advisor and an estate attorney. Now, the water becomes somewhat murky here because some of these players wear multiple hats. In certain cases, they work for a fee on your behalf.

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How Do You Get Started in Private Real Estate Investing?

3 years ago 0 0 1543

As young adults start to accumulate wealth, very few consider investing in real estate. But why? As stated in my previous blog, Private Real Estate Investing: A Game of Risk, real estate presents a unique set of challenges, including illiquidity, higher risk and the amount of required capital. In addition, most people enter the investing world through a friend who is an investment advisor (i.e. stock broker), and he or she sells stocks, bonds, mutual funds and other similar investment vehicles. When I started thinking about a career in real estate investments, a very successful private real estate promoter gave me a piece of advice: Start early with a small stake, and grow it. So, how do you start? Pool Capital Even if you do not have much cash, a smart way to get started is to organize a group of friends who are each willing and able to make

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Private Real Estate Investing: A Game of Risk

3 years ago 0 0 1777

Most people invest in equities, like stocks and bonds. They are liquid. They are transparent. The markets are regulated. With equities, you can follow your investment though various channels. And you are betting on companies more than individual people. Private real estate investing is different. The investment is illiquid. Current value of the asset owned is not easily determined. Often there is a sponsor or promoter who has discretion with regard to major decisions, and finally, debt is typically used to purchase the asset. These factors combined increase risk and put private real estate investments in the category of Alternative Investments. Getting Started To invest in a private real estate deal, an investor must be accredited. This means he or she can afford either to lose all equity or not have access to it for an indefinite period of time. Once this hurdle is cleared, I recommend all investors ask

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Mentoring 102: On-the-Job Mentoring

4 years ago 0 1 1653

Mentoring 102: On-the-Job Mentoring  So, your mentee has landed her first commercial real estate position. She’s excited, engaged and ready to learn the ropes and land some deals. Despite her enthusiasm and drive, she feels overwhelmed and doesn’t know where to start. This is where you come in. In my last blog, “Why Mentoring Is Key to Future Success,” we discussed how a mentor assists with the initial career decision. As promised, this blog addresses how mentors can help young professionals start with necessary fundamentals. This is important because like golf, if your set-up is poor, a bad swing will follow. Fortunately, most real estate companies now use the team approach. Teams can consist of junior and senior members or of professionals with complimentary skill sets. This approach by its nature gives the novice both a focus and a mentor. For small companies, less team opportunities exist, so individual mentoring

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How Financial Markets Impact Property Values

4 years ago 1 1 1914

Until the early 1980’s, real estate values were dependent on what I call real estate fundamentals—location, product quality, supply and demand. As a rule, financing provided investors and developers inexpensive, long-term capital but had insignificant impact on property value. Therefore, they held properties for long periods of time and often made money by paying down debt and by appreciating property values. Developers and owners had banking relationships as well. All of these factors equaled stable markets (except when developers became aggressive and tilted the supply/demand balance). Those were the Good Ole’ Days. Now, financial markets have a greater impact on property values, and here’s why: A shift in how private interest buys, develops and finances properties occurred. The Internet has made real estate a global asset. Traditional financing is not as readily available. 1980’s: A Marked Shift The 1980’s forced a major shift in real estate development and investment. Due

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Atlanta’s Edge Cities Develop New City Centers

4 years ago 0 2 3549

I recently heard famed urbanist Richard Florida speak about the rise of the creative class. He claims creative people want to be around other creative people—to live closer together, to spend less time in their cars and to partake in convenient amenities. This trend is manifesting itself in urban areas in the form of high-density, mixed-use developments. It is also happening in the suburbs of metropolitan areas, which have grown up around what were once fairly rural downtowns. In the Atlanta metropolitan area, several edge cities are working hard to create an attractive “sense of place”. Also, several suburban communities have incorporated to take advantage of this trend. Let’s look at a few examples in Atlanta. Living on the Edge You probably already know their names. Dunwoody, Sandy Springs, Roswell and Alpharetta all rank as Atlanta’s edge cities. Let’s start with Sandy Springs as I have been a resident there

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A Tale of Two Restaurants

4 years ago 0 0 1956

I had the opportunity this fall to travel with my wife to South Africa for a couple of weeks. Between enjoying Cape Town and going out into the Savannah to see exotic animals, it was everything you’d imagine it to be. The only downside was the jet lag. Part of the experience was, of course, eating. South Africa is renowned for its vineyards, and it has a few high-concept restaurants that offer tasting menus of chef-selected pairings of dishes with wines. I was excited for one of these, in particular. It was the “bucket list” spot, the one everyone said I needed to go to. It was always booked, requiring reservations long in advance. Food critics around the world were raving. When the night finally came, everything about this place was…just OK. The atmosphere was a little stuffy, but OK. The food and wine were OK. And the price—well, let’s

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