New RERC Real Estate Report, Uncertainty Looms
May 10, 2012
It isn’t just slow job growth, the weak housing market, or high debt that is causing uncertainty to loom. We are also concerned about the political unwillingness of our leaders to address real problems, the ongoing crisis in Europe, and concern about the possibility that the Federal Reserve may have to raise interest rates earlier than planned. While these risks will continue for most of 2012 (at least through the…
Investors Optimistic about Real Estate for 2012
April 16, 2012
Ken Riggs, chairman and president of RERC, closes this session of Deloitte’s commercial real estate d-brief webcast by tying together how the economy, property fundamentals, and the capital markets interrelate. “I’m more bullish on commercial real estate than the other major investment alternative,” Riggs states…
Shelter from the Storm
February 22, 2012
With weak business and consumer confidence, investors are increasingly turning to the relative safety of commercial real estate, as outlined by RERC's Ken Riggs in the January/February 2012 feature article for Commercial Investment Real Estate magazine. In “Shelter from the Storm,” Mr. Riggs explains how commercial real estate is able to deliver what cannot be delivered by various investment alternatives in these stormy times.
World Turning from Fear to Caution
February 17, 2012
Although much uncertainty remains in the economy and the investment environment, the overall view is that things are finally improving, and that over time, the playing field for investments will eventually level out. As demonstrated in the RERC Real Estate Report, As the World Turns from Fear to Caution, RERC's institutional investment survey respondents have increased their ratings for stocks and bonds, which involve more risk but have the…
CRE Providing Foundation in Uncertain World
February 2, 2012
Commercial real estate may provide a foundation for educated investors seeking to balance portfolio risk during these uncertain times, as stated in Expectations & Market Realities in Real Estate 2012—New Foundations in an Uncertain World, a new annual report published jointly by Real Estate Research Corporation (RERC), Deloitte, and the National Association of REALTORS® (NAR). The three organizations have drawn on their respective capabilities to examine the economy, capital markets,…
CRE Professionals Look for More from Education Programs
January 25, 2012
Education leaders in some of the commercial real estate industry’s leading professional organizations discussed changing needs and requirements in Course Correction, in the February 2012 issue of Commercial Property Executive. Besides issues related to technology and management, there are expanded professional education requirements, as explained by Del Kendall, managing director at RERC and head of the education committee for The Counselors of Real Estate®. In fact, Mr. Kendall noted…
Riggs Named 2012 Chair of The Counselors of Real Estate
January 9, 2012
Kenneth P. Riggs Jr., CRE®, chairman and president, Real Estate Research Corporation (RERC), was recently named 2012 Chair of the Board of The Counselors of Real Estate®, an international organization of top-level commercial real estate advisors headquartered in Chicago, at their annual convention in Washington, D.C. Riggs has served as president of RERC since 1991. Under Ken's leadership, the firm provides research services, valuation management, strategic consulting, independent fiduciary services,…
Search for Clarity...In a Dangerous World
November 16, 2011
With words like “contagion,” “austerity programs,” and “sovereign debt crisis” now part of our lexicon, there is the realization that our world is in increasing financial danger. But as Ken Riggs, chairman and president of RERC, explains in Commercial Property Executive, the pull back by real estate investors in this environment should also serve to prevent the market from getting too far ahead of fundamentals, and will help to…
Commercial Trends in a World Unhinged
November 10, 2011
As the world focuses on the sovereign debt crisis in Europe, it is becoming clearer that the global economy is in danger. Commercial real estate has traditionally provided a sense of relative stability in the market and returns have been reasonable, but in this precarious investment environment, risk is increasing. RERC's institutional investment survey respondents continue to rate commercial real estate highest among the investment alternatives, however, the ratings for…
Finding Safety in a Confused World
August 18, 2011
Just when we thought the financial markets were gaining some sanity, the world careened into a level of chaos that has completely overtaken the investment markets. Call it fear, or uncertainty, or just the conviction that the economy is going in the wrong direction–regardless, this unexpected chaos has damaged the psyche of large and small investors alike. According to Ken Riggs, RERC president and CEO, in his recent investment column…
Search for Safety
August 12, 2011
Given the slowdown in the U.S. economy, added concerns in the debt crisis in Europe, and the first-ever downgrade of our nation's AAA credit rating, it is no wonder that investors are seeking safety, and commercial real estate is increasingly attractive. As noted in the summer 2011 issue of the RERC Real Estate Report, “Search for Safety,” institutional investment survey respondents rated commercial real estate as the strongest investment…
Stability for Nervous Investors
July 19, 2011
Just a few short months ago, the recovery seemed to be finally taking hold. Job growth was finally strengthening, retail sales were starting to pick up, and the stock market was gaining steam. Our confidence was short-lived, however, as a confluence of events occurred: Japan's earthquake, civil war and upheaval in the Middle East and northern Africa, the debt crisis in Europe, further deterioration in the U.S. housing market, and…
Riggs 1st Vice Chair of Counselors of RE
July 13, 2011
Kenneth P. Riggs, Jr., CRE, president and CEO of Real Estate Reserarch Corporation (RERC) was named first vice chair of The Counselors of Real Estate at the organization's recent mid-year meeting in San Diego. Mr. Riggs is to be named chairman of The Counselors of Real Estate in 2012. The Counselors of Real Estate is an international organization …(click here to read press release).
The Chase Is On!
June 24, 2011
With the market starting to move from the top down, more and more investors are signaling their willingness to enter the race for commercial real estate, despite their hesitancy about paying high prices. According to results of a recent survey taken among members of the Association of Foreign Investors in Real Estate (AFIRE), the U.S. commercial real estate market offers a stronger investment opportunity for foreign investors than it has…
Balancing Risk and Return during Uncertain Times
May 23, 2011
Commercial real estate investors appear to remain cautious with their return expectations during these uncertain times, and are weighing the risks presented by the economy and the capital markets, as stated in Expectations & Market Realities in Real Estate 2011—Balancing Risk and Return in an Era of Uncertainty, an annual report recently released and published jointly by Real Estate Research Corporation (RERC), Deloitte, and Real Capital Analytics (RCA) (…
Investors Getting Down to Brass Tacks
May 11, 2011
As institutional investors continue the flight to quality as a strategy for real estate returns, demand continues to increase in large markets and values are increasing at a faster rate than in secondary markets. This is a necessary and appropriate part of the recovery process for commercial real estate, and as noted in the just-released spring 2011 issue of the RERC Real Estate Report, Getting Down to Brass Tacks,…
Investors Stretching Underwriting in California Office Market
March 16, 2011
With several quarters of stabilizing vacancies and rents, most major California office markets seem to have found bottom (or at least bottom is predictable and further decline is incremental), explains William Corbin, managing director of RERC's West Coast office in the winter 2011 issue of the RERC Real Estate Report. “As a result, investors are taking a forward-looking approach to purchase underwriting and transactions are starting to occur,” he…
Investors Inching Out on Risk Spectrum
March 2, 2011
Investors who want to preserve safety but are ready to slightly increase their risk level are starting to look at commercial properties in the secondary and tertiary markets, noted Ken Riggs, CEO of Real Estate Research Corporation and chief economist for the CCIM Institute, in The Wall Street Journal's MarketWatch report. Investors are more optimistic about return versus risk, as well as value versus price, for commercial property, according to…
Commercial Real Estate "Defying Expectations"
February 14, 2011
Despite the sluggish economy, it is astounding how well the institutional commercial real estate market is performing. Required capitalization rates continue to compress, expected rental growth is increasing, and returns for top-tier properties are defying expectations. Although there are still serious difficulties for some property types in many of the secondary and tertiary markets, the recovery continues with institutional properties meeting the challenges head-on. Research includes rates for 10 major…
2011 Forecast: The Good, The Bad, and The Unknown
February 9, 2011
The 2011 market remains divided among good quality properties selling at high prices in the best markets, distressed properties selling at a fraction of prices fetched in 2007, and the rest of the properties in small-town America where buyers, sellers, and lenders are finding it nearly impossible to get deals done. The third category is where the majority of properties exist–those properties that may be economically paying their way but…
Real Estate Market Increasingly Divided
December 2, 2010
With some historically high prices being paid for institutional properties in top-tier markets, and other markets seeing little or no transaction activity other than distressed property sales, the commercial real estate market is becoming increasingly divided, said RERC President and CEO Ken Riggs in The Wall Street Journal's MarketWatch report. “The good news is that institutional markets are typically a leading indicator to change in the secondary markets, and we…
Fall/Third Quarter 2010 RERC Real Estate Report released
November 11, 2010
Despite increased transparency, the commercial real estate market still faces a great deal of uncertainty and is becoming increasingly divided. Top-tier institutional real estate properties remain in great demand, while lower-tier properties are being repriced downward. As noted in the fall 2010 issue of the RERC Real Estate Report, “The Best, the Distressed, and the Rest,"cap rates and discount rates continue to compress for institutional-level properties, while…click here to…
Kendall Leads NCREIF Valuation Committee in 2011
November 11, 2010
Del Kendall, CRE, MAI, managing director of RERC’s Houston office, and chairman of the NCREIF Valuation Committee for 2010 and 2011, organized and moderated a panel comprised of Ken Riggs, RERC president and CEO, Jim Clayton, vice president-research with Cornerstone Real Estate Advisers, and Robert Micera, CIO of Cole Real Estate Investments, on “Pricing Risk: Rational Expectations,” at the winter NCREIF Research/Valuation Committee presentation in Scottsdale, Ariz., in March 2011.…
Kendall Focuses on Valuation in Appraisal Institute Webinar
October 20, 2010
Del Kendall, CRE, MAI, managing director of RERC's Houston office and chairman of the NCREIF Valuation Committee, offered his insights in a Nov. 10 presentation on “REIS and GIPS: Investment Firm and Institutional Investor Initiatives and Perspectives on Real Estate Valuation.” (click here for webinar slides) The purpose was to help the audience understand NCREIF's appraisal and valuation consulting needs and its role in the real estate industry. Kendall is…
CCIM Leadership Recharges Curriculum
October 6, 2010
CCIM leadership, including RERC's Ken Riggs, who serves as chief real estate economist for the CCIM Institute, is emphasizing education, technology, and networking to help support its approximately 15,000 members operate at the top of their game, as reported in the September 2010 issue of Real Estate Forum's cover story, “New School of Thought.” click here to link to magazine article
Fighting the Battle of Appraisal Lag
September 30, 2010
RERC Managing Director Del Kendall emphasizes the need for more accurate property valuations, particularly when there are few sales comparables on which to base valuations. To help avoid appraisal lag, Mr. Kendall suggests gathering more anecdotal evidence, and considering various methods of quantifying price declines (Band of Investment Technique). To read Mr. Kendall’s entire article, as published in the summer 2010 RERC Real Estate Report, please click here.
Investors Bullish about Commercial Real Estate
August 25, 2010
Investors are more bullish about commercial real estate than other investment classes, reported RERC in _Commercial Real Estate Direct _this week. “Institutional investors skittish about the slowing economy and the volatility and risk in the stock market are finding the diversification, stability and higher absolute returns of commercial real estate increasingly attractive,” said Ken Riggs, president and CEO of RERC. click here to link to article
Apartment and Office Sectors Spark Investor Demand
August 25, 2010
RERC's investment conditions ratings for the institutional apartment and CBD office sectors jumped a full point during second quarter 2010, making them the two highest-rated property types that RERC surveys. The investment conditions rating for the apartment sector increased to 7.1, while the rating for the CBD office sector increased to…(click here for entire press release) The investment conditions rating for the apartment sector increased to 7.1 during second quarter…
Riding the Edge of Success
August 18, 2010
As the second half of 2010 gets underway, we are at an inflection point in this investment cycle and are facing the harsh realities of a risky world. Top-tier institutional real estate continues to be in great demand, despite the slowdown in the economy, and required returns are increasing slightly for some property types, while cap rates are mostly declining, as reflected in the summer 2010 issue of the RERC…
Real Estate Recovery Dependent on Repricing and Deleveraging
August 9, 2010
Investors expecting to find bargains on distressed properties are finding instead that the amount of liquidity in the market and the ability of lenders to re-price assets to a level that will clear the market is more measured than most had predicted, explained RERC President and CEO Ken Riggs, in the Wall Street Journal's MarketWatch report. Riggs, who also serves as the CCIM Institute's chief real estate economist, stated that…
Kendall Kicks-off NCREIF Capital Markets Symposium
July 13, 2010
Del Kendall, managing director of RERC's Houston office, kicked-off the Capital Markets Symposium at the NCREIF Summer Meeting in Chicago on June 30. Held jointly with the Appraisal Institute, the session featured panel members Bob White, CEO of Real Capital Analytics (RCA), and Ken Riggs, CEO of RERC, who discussed the state of the commercial real estate market. Click here to access PowerPoint.
Emerging from the Rubble
June 1, 2010
This article authored by RERC's Ken Riggs and published in the newly released _Real Estate Issues _takes a close look at investment returns for commercial real estate for 2010 and 2011. Bid-ask spreads are starting to narrow and investment capital is becoming more available, but the challenge in bridging market pricing to market values amid the uncertainty that surrounds forecasting cash flow under stressful economic conditions remains. click here to…
False Bottom or Firm Foundation?
May 26, 2010
As discussed in Commercial Property Executive, RERC's Ken Riggs notes that commercial real estate investors, burned when the markets collapsed a couple years ago and who had been keeping their distance, have been returning to the fold as the risk and return metrics have moved in their favor–or, at least as far as they can see. The question is, however, whether what appears to be the bottom of the…
Divisions Separate Investors from Opportunities
May 17, 2010
Despite forecasts of recovery in the commercial real estate market, there remain several factors that will limit a sustainable improvement in 2010, according to a report released by Real Estate Research Corp. (RERC) and the CCIM Institute, and as described in the Wall St. Journal's MarketWatch. Despite high unemployment, high vacancy rates, declining rents and other divides, RERC's Ken Riggs says, “Investors should view 2010 as a once-in-a-lifetime opportunity to…
Recovery Gains Traction
May 12, 2010
Although there are more signs of recovery in the economy and in commercial real estate, the market remains bifurcated and the recovery will be very uneven. As noted in the spring 2010 RERC Real Estate Report, “Recovery Gains Traction,” we are seeing lower cap and pre-tax yield rates as demand for institutional-level properties increases, but there is a lack of demand for second-tier properties, and returns remain…Click here to purchase…
Time to "Gear Up" for Institutional CRE Opportunities
April 7, 2010
RERC, with partners Real Capital Analytics (RCA) and Holliday Fenoglio Fowler (HFF), says that 2010 will be the best time in many years to buy well-priced institutional-quality commercial real estate. In the recently released annual forecast report, Expectations & Market Realities in Real Estate 2010: Crossing the Divide—The Passage to Recovery, the firms draw on their respective capabilities to thoroughly examine today's commercial real estate market. The three firms…
Riggs Appointed Chief Real Estate Economist
March 23, 2010
Ken Riggs has been named chief real estate economist for the CCIM Institute. In addition to his continued role as president and CEO of RERC, Riggs will be responsible for addressing CCIM members at the annual fall meeting and through quarterly podcasts, conducting webinars through the CCIM Institute’s Ward Center for Real Estate Studies, providing analysis and forecast commentary to the media, and authoring the annual forecast article for the…
"Pure Determination" Needed
February 17, 2010
Economic issues like a deepening federal deficit, high unemployment, increasing pressure on state and city budgets, and more bank failures continue to weigh down the investment environment for commercial real estate. Even so, RERC's new required pre-tax yield rates increased slightly over the previous quarter's rates, while capitalization rates are mixed…(Purchase the 4th quarter report)
Delinquent CRE Loans Could Sidetrack Recovery
February 4, 2010
Don Burns, CRE, FRICS, MAI, and managing director for RERC in the Atlanta office, reminded attendees of the Georgia Society of CFAs meeting that commercial real estate lags the economy, especially in the recovery phase. In a presentation to the group last week, Burns discussed how the deficit and high unemployment are already placing a huge drag on the economy, and that growing commercial real estate loan delinquencies put the…
2010 Forecast Published in CIRE
January 13, 2010
Although the large institutions already have worked through a lion's share of repricing issues, the same cannot be said for the broader commercial real estate market. The year 2010 will be a year of reckoning for many investors who up to now have been able to defer their issues to a later date. Those playing the “blend, extend, and pretend” game may be forced to look ahead and see how…
The Road to Recovery: Challenges and Opportunities
December 21, 2009
RERC's Ken Riggs and Principal Real Estate Investors' Randy Mundt offered their overview for the economy and for commercial real estate investment at the University of Chicago Graduate School of Business (GSB) Real Estate Conference on Nov. 5, 2009. Sponsored by the GSB Real Estate Alumni Group, of which Riggs is a member, the presentation clarified where we are in the investment cycle with respect to price vs. value and…
The Gauntlet Continues...
November 16, 2009
With investors summoning the strength and courage to continue their quest for returns, look to the fall 2009 RERC Real Estate Report, “The Gauntlet Continues,” for the latest cap rates, yield rates, investment conditions ratings, and other criteria. For those of us involved in the business of commercial real estate, stress has turned to distress. Reports of foreclosures on high-quality properties and failed banks occur almost daily. Property values continue…
Valuation Navigates Steep Cliffs
November 16, 2009
RERC CEO Ken Riggs take an in-depth look at how cap rates impact values of commercial real estate in Valuation Navigates Steep Cliffs. Based on RERC’s second quarter 2009 required returns, the article compares these rates with NCREIF realized returns during various recessionary periods.
"7 Come 2011"
October 23, 2009
Although most investors do not want to stand back up at the real estate table until prices have stopped declining and have stabilized, RERC maintains that life is a gamble, and “7 come 2011,” commercial real estate is still a bet that you have to take. See Ken Riggs' recent column, as published in Commercial Property Executive.
Hotel Investors Look to Cap Rates for Sign of Stabilization
October 1, 2009
With little good news in the hotel market of late, investors looking for any ray of light at the end of the tunnel may be seeing it in capitalization rates. According to data presented in the summer 2009 issue of the RERC Real Estate Report, unleveraged going-in and terminal capitalization rates on an institutional level declined slightly, to 9.8 percent and 10.4 percent, respectively, during second quarter. “Given that…
CRE Moving from Stress to Distress
September 17, 2009
A year after the U.S. financial system nearly collapsed, the stress on the credit markets has been relieved somewhat. Unfortunately, the distress in the commercial real estate market is intensifying, as more and more investors who have over leveraged or have no equity are defaulting…(see Ken Riggs' column in Commercial Property Executive)
Retail Pre-Tax Yield Rates Retreat
August 19, 2009
Sluggish sales do not bode well for retailers, or for investors in regional retail malls, retail power centers, and neighborhood/community retail centers, says Managing Director Don Burns, and reflected by data released in the summer 2009 RERC Real Estate Report. Real Estate Research Corporation’s (RERC’s) required pre-tax yield rates for these retail sectors, which had been increasing or holding steady thus far throughout the recession, sharply retreated in second quarter…
Courage and Conviction Needed to Survive
August 6, 2009
Although we may be starting to see signs of stabilization in the economy, there is more pain ahead for the commercial real estate market. As shown in the new issue of the RERC Real Estate Report, investors will be required to muster the courage, conviction, and decisiveness needed to survive in this environment. With the unemployment rate expected to increase to double digits during the second half of 2009…
NCREIF Valuation Committee Mtg. Notes Presented
August 4, 2009
An open discussion on “What Is It Worth Now?” and a panel discussion headlined as “Four Forecasts” were the highlights of the NCREIF Valuation Committee, as described by RERC Managing Director Del Kendall. A reproduction of Mr. Kendall’s article is reprinted with permission from The Appraisal Journal, Summer 2009, ©2009 by the Appraisal Institute, Chicago, Illinois. All rights reserved. Participants in the “Four Forecasts” panel included Bill Wheaton, Glenn…
Demand and Supply Analysis Critical to Self-Storage
July 9, 2009
To better anticipate the dynamics of a market for self-storage properties, RERC places great emphasis on various supply and demand factors in each subject's market area. For more information about this specialized analysis, or to request a copy of a white paper detailing this process, contact RERC Managing Director Kent Steele at 630.430.3865 or ksteele@rerc.com.
McCoy Book on Ethics Key in Today's Environment
June 30, 2009
Bowen H. “Buzz” McCoy wrote Living Into Leadership: A Journey in Ethics several years ago, but the principles he discussed are particularly relevant today. “Ethics is what you are willing to lose for,” he explains. Read Ken Riggs' review of McCoy's book (Reprinted from The Counselor, Fall 2007 issue, with permission from The Counselors of Real Estate.)
Lack of Trust, Confidence Exhibited in Economy
June 24, 2009
This zero-sum decade certainly has had its share of winners and losers (mostly losers). As Ken Riggs points out in the kick-off presentation to the NCREIF Summer Conference in Chicago, investors have lost both trust and confidence in the economy and the markets…download the PowerPoint presentation
Riggs Elected 2010 Second Vice Chair: Headed for CRE Chairmanship
June 2, 2009
Kenneth P. Riggs, Jr., CRE, has been elected 2010 second vice chair of The Counselors of Real Estate, setting him on the path for the 2012 CRE chairmanship. Elected at The Counselors of Real Estate's recent 2009 Midyear Meetings in New York City, Riggs is expected to serve as CRE first vice chair in 2011. “I am honored, humbled and appreciative to be chosen at this critical juncture to help…
Real Estate Travels Uneven Road to Recovery
June 1, 2009
Despite some positive indicators in the economy, the retail property sector continues to struggle, as explained by Ken Riggs in Commercial Property News Online. Tied to consumers and reflecting their spending habits in this uneven road to recovery, the sector received the lowest return-versus-risk rating from institutional investors… see May 26, 2009 issue of CPNonline…
Investors Determined to Overcome New Depths
May 11, 2009
Commercial real estate has yet to see bottom, but investors committed to this asset class are determined to overcome the depths of this recession and the challenges facing the industry. As noted in the current issue of the RERC Real Estate Report, the losses in this recession appear to be more severe than what the industry suffered in the 1990s. click here to purchase In the 1990s, prices declined…