MO's Top 50
Conversations at the CRE Finance Council’s 2015 New York conference took an unexpected turn this week with more than a dozen panelists cautioning that another economic downturn could hit the U.S. before 2020.
“Lending is becoming overheated again,” said one speaker, who asked not to be identified. “Competition is overwhelming disciplined market practices and credit quality is deteriorating.”
Mr. Orso met with Mortgage Observer to discuss his entry into the business and the challenges he and his colleagues overcame to grow the commercial real estate finance business and secure their first stand-alone CMBS deal in 2014. The team of about 330 employees is reportedly preparing for an IPO to take place later this year, however, Mr. Orso declined to comment.
It’s a new year, and experts in the commercial real estate sector are assessing how factors like New York City’s newly inaugurated mayor and elements of financial reform coming online may impact business. Here, Mortgage Observer spoke to several to get their takes on what the year ahead holds for the economy, banking, financing and New York City as a whole. Read More
Since the jobs recovery began in late 2009, New York City has been one of the best performers in the nation.
As of August, total employment has increased by more than 290,000 jobs (note the partial government shutdown delayed the release of September employment for the city—it will now come out in late November, along Read More
Cadwalader, Wickersham & Taft
Co-Chair of the Capital Markets Department
Cadwalader has provided lead counsel services in several of the largest single-borrower CMBS transactions ever. What kinds of challenges have those deals presented?
The New York City commercial real estate investment sales market is on fire. Demand is outpacing supply by a wide margin, and historically low interest rates have provided the rocket fuel for a seller’s market unlike anything we have seen since 2006-2007.
Almost all product types in all neighborhoods have seen average prices per square foot recently exceed the peaks achieved during the last cycle.
The one notable exception is Midtown office buildings, a fact that sends a very profound message. I have been writing since late 2007, and in that time there has never been a period in which the relationships between politics, economics and real estate have been more closely tied. Poor economic policy and policy overreaction to the great recession have created a broader economy that is simply limping along. Coming out of a recession as deep as the one we recently suffered should result in gross domestic product growth of up to 6 percent annually. We have been at less than one-third of that.
Prior to the November elections, all meaningful efforts to address our looming fiscal problems were put on hold by legislators until the outcome was known. Well, we now know the outcome, and it’s not that much different than pre-election, as far as the balance of power goes.
So lawmakers return to the nation’s capital knowing Read More
The Financial Protection Bureau established its first New York outpost by signing a 21,000-square-foot lease at 2 Grand Central Tower. The bureau will occupy part of the third floor and the entire fourth floor at the Midtown building purchased last year by Rockwood Capital. The 10-year lease was done for rents around $50 per square foot. Paul Amrich, Vice Chairman in CBRE‘s Brokerage Services Group, led a team representing the landlord. David Leest, a broker with Brody Realty Corp., represented the bureau.
The regulatory agency was established last year as a result of the Dodd-Frank Act, legislation passed to guard consumers in the wake of the financial crisis and Great Recession. The bureau sought a space that would place it near the financial services companies it works with–the headquarters of Bank of America, JPMorgan Chase, Citibank and Wells Fargo are within a few blocks of 2 Grand Central Tower, on 45th Street between Lexington and Third Avenues.
the lead indicator
On the heels of last month’s appearance of JP Morgan Chase CEO Jamie Dimon, the House Subcommittee on Capital Markets and Government Sponsored Enterprises welcomed several players from the world of commercial real estate Tuesday.
They testified at a hearing entitled “The Impact of Dodd-Frank on Customers, Credit, and Job Creators” that seemed to focus more on the overall impact of specific provisions within Dodd-Frank on the capital markets.
the lead indicator
Last Thursday’s revelation of a multibillion-dollar trading loss at JPMorgan’s Chief Investment Office has reverberated through Wall Street and Washington, stiffening the resolve of tighter regulation’s most outspoken advocates. For the weekend’s op-ed columnists and a herd of elected officials, the loss adds to prima facie evidence of a deep flaw in the current model of investment bank risk-taking.
In the case of a large institution, they argue that risk-taking intimates broader threats to stability that must be contained. For the bankers careful to adopt a contrite demeanor, it also represents an ill-timed misstep by their most credible ideological counterweight and champion of self-regulation.
The daily buffeting of confidence in the recovery’s resilience has demanded an unusual focus on immediate threats to commercial real estate investment conditions. Even in New York City, where improvements in property values and capital inflows have clearly outpaced peer markets, the vagaries of developments in Europe as well as conditions closer to home have necessarily called for consideration in meetings of investment and credit committees.
Recently, there has been tremendous coverage of the Occupy Wall Street protests. It is obvious that this is not a political movement but merely a way for some disgruntled Americans to express their frustrations. It is unfocused and really has no coherent agenda. Ask 50 demonstrators why they are there and what they hope to achieve and you get 50 different answers.