By The Editors 5/13 7:00am

opinion

New Columnists, More Opinions, Now!

If you hadn’t already noticed, The Commercial Observer late last night added seven new columnists to its already formidable roster of real estate thought leaders.

Indeed, along with veteran prognosticators Robert Knakal, Sam Chandan, Richard Persichetti and Robert Sammons (back from a short hiatus), we’re now happy to welcome David Greene, Christopher Havens, Barry LePatner, Kenneth McCarthy, J.D. Parker, Joshua Siegelman and Scott Spector. Find web-exclusive columns along the right rail of our website every week. Read More

By Sam Chandan 5/01 4:00pm

the lead indicator

chandan silo for web

Power, This Time for the Keynesians

Speaking of power, the Austerians have lost one of their most powerful corroborations. At least for political purposes, the oft-cited and rather particular relationship between sovereign debt and growth has been sundered by a graduate student’s homework assignment. Never has so much of consequence turned on a spreadsheet error. Read More

By Sam Chandan 4/17 10:00am

the lead indicator

chandan silo for web

A Bridge Too Far: It Isn’t a Lack of Funding Keeping Infrastructure From Being Built

Ask someone if there’s a problem with American infrastructure and there’s a good chance he’ll point at the nearest bridge.

It needn’t be a grand structure. As a generation of Wharton alumni will confirm, crossing the Schuylkill by way of the modest South Street overpass was a risky proposition until just a few years ago. In its dying days, the bridge was closed to heavy vehicles but open to daredevil and presumably light-footed Penn students. The long-deferred move to replace the 1923 bascule bridge began in 2008, which happened to coincide with city engineers’ declaration it would not survive another winter. Read More

By Sam Chandan 4/11 10:00am

the lead indicator

chandan silo for web

Employment Remains the Weakest Link of the Recovery

It’s been clear since long before the Great Recession that something is amiss in the labor market. Unbeknownst to the most recent crop of college graduates, this is not our first “jobless recovery.” That term was introduced to the popular lexicon in the early 1990s. It was revived in 2003; more than a year into that recovery, the turnaround in employment had never been weaker. In retrospect, those were halcyon days when compared with our current run.

What’s gone wrong? Read More

By Sam Chandan 4/04 10:00am

the lead indicator

chandan silo for web

Girding for Growth in Midtown

There are good reasons to envisage a refresh of Midtown Manhattan’s office inventory.

A prolonged lull in construction has left us with an abundance of heirlooms but few modish buildings. As a global center of finance, Midtown East’s built environment compares especially poorly with its peer markets. Average rents are much higher in London, but the premium over Midtown is less pronounced when comparing our small basket of best apples with theirs. Rezoning with an eye to new construction has its winners and losers. As new properties come online over the next decade, incumbents saddled with older buildings may find their highest and best use takes them outside the office sector altogether. Read More

By Sam Chandan 3/27 9:00am

the lead indicator

chandan silo for web

Is Office Space a Thing of the Past?

Is the office obsolete?

The argument has been going on since before the Internet, when its antecedents were limited to connecting university research labs to the Department of Defense. The adoption of new technologies may afford smaller server rooms and fewer filing cabinets, but the location of people dominates everything else when it comes to office space utilization. At least on the margins, the data show we are using less office space for every employee. We cannot assume that reflects the impact of technology, but it’s not an unreasonable hypothesis. Read More

By Sam Chandan 3/27 7:00am

Mortgage Observer

Sam Chandan.

Qualifying a CMBS Rebound: What an Explosion of New Deals Implies for Credit Quality

CMBS issuers are on a roll. The best January on record has propelled first-quarter 2013 volume past $20 billion, a milestone that has otherwise eluded the market for more than five years. Few issuers expect a slowdown in activity over the next year. Both for fusion deals and single-asset transactions, securitization has become an increasingly more competitive option as spreads have narrowed. The single-asset market has leapfrogged the recovery in multi-borrower deals and is on track to surpass its previous peak. After years of middling progress, the CMBS market overall is reasserting itself as investors’ tolerance for risk-taking recovers. Read More

By Alessia Pirolo 3/26 2:00pm

Mortgage Observer

Jeffery Hayward.

Fannie Mae Multifamily Head, Agency Vet Jeffery Hayward

When on the road, Jeffery Hayward often carries a personally customized guide, with the addresses of all the multifamily buildings that Fannie Mae has financed in the area. Then the head of the government-sponsored enterprise’s Multifamily Mortgage Business drives from building to building.

“I want to see what we are financing,” Mr. Hayward told The Mortgage Observer recently, during a series of meetings in his Washington, D.C. office. “I have actually walked a lot of the properties that we financed—I know what they look like, I have seen the tenants.” Read More

By Sam Chandan 3/21 10:00am

the lead indicator

chandan silo for web

How to Have a Banking Crisis

A run on the banking system is one of the surest paths to a credit crisis. The mechanics are simple: worried that their banks might fail or otherwise endanger their savings, consumers shift to their mattresses as preferred storehouses for cash. The expectation fulfills itself. In a fractional-reserve banking system, mass withdrawals drive institutions to insolvency. A failure of one bank raises the possibility that others could also fail. And so the process cascades. Read More

By Sam Chandan 3/13 10:00am

the lead indicator

chandan silo for web

Can the Apartment Market Manage Without Fannie and Freddie?

The debate over housing finance reform has taken place largely behind closed doors, with public discourse limited to speculation. Since the collapse of Fannie Mae and Freddie Mac into effective insolvency in September 2008, the public has been shielded from serious discussion about their future. At least for the time being, weakness in the housing market has encouraged the status quo; policymakers have sidestepped the question of the government’s long-term role in shepherding homeownership outcomes. Read More

By Sam Chandan 2/27 10:00am

the lead indicator

chandan silo for web

Should We Raise the Minimum Wage?

Among the various proposals put on the table during his State of the Union earlier this month, the president called for a higher federal minimum wage. That was guaranteed to push the ideological buttons. Along the absurdly one-dimensional political spectrum that now defines the norm of policy debate, each side has its arguments for or against such a move. The minimum wage has been around since the Great Depression, when it was set at a quarter.

For all its longevity, divided interests have not succeed in settling the minimum wage debate conclusively, in part because distributional considerations are an important part of the evaluation that clouds clear thinking on both sides. Read More

By Sam Chandan 2/20 10:00am

the lead indicator

chandan silo for web

America’s Infrastructure Crises

During his State of the Union address last week, President Obama pushed for renewed investment in the country’s weakening infrastructure.

In the ranking of proposals making the rounds in Washington, this one falls low on the scales of partisanship. Party ideologies aside, the quiet majority in Congress stands to benefit from a program that would see new spending reach virtually every district in the nation. If there is one arena in which policy makers’ individual incentives might trump doctrine, this could be it. Read More

By Sam Chandan 2/13 10:00am

the lead indicator

chandan silo for web

Price Stability, the Real Estate Hedge and the Federal Debt

The Federal Reserve dropped a lead foot on monetary policy in late 2008 and intends to keep it there until you or someone you know finds a job.

If you’re reading The Commercial Observer, odds are you’re gainfully employed. The Fed’s attention is elsewhere, fixed on the more than 12 million Americans still lollygagging in the labor statistics. Price stability is the other half of the Fed’s mandate, but for now, employment is the larger challenge. Read More

By Sam Chandan 1/16 7:45am

the lead indicator

chandan silo for web

Investment In NYC Begets More Investment, Until It Doesn’t.

Buy American.

It is generally required if you are the government, and simply an admonition if you are not. The jurisdiction of President Hoover’s 1933 legislation may end at the border, but investors around the world are responding to the call in any case. They are not acting without cause. The global instability exemplified by Europe’s existential crisis has fueled a disconcertingly insatiable appetite for riskless assets that has long outlived the technical recession.

Treasury and agency debt markets are flush with eager buyers, even at negative real returns. But the appeal of buying American extends well beyond our favorite export. Read More