A $700 Billion Mistake? Some of the smartest guys I know, economists, CEOs and even housing advocates from sectors usually ignored in the mainstream media are all starting to come to a conclusion that I think may be prescient. The federally managed $700 billion, tax payer financed proposal should fail in Congress. While there is a likelihood it will pass, the more conventional, non-hysterical wisdom is this: The president is not understanding our present economic situation and is getting bad advice from the Council of Economic Advisors and even worse advice from Benny Bernanke. The ability of the new funding…

By Keat Foong, Executive Editor We are going from crisis to crisis. The House voted down the $700 billion bailout plan, and the Dow Jones Industrials plunged by 777.68, or nearly 8 percent—its worst drop in two decades. In the immediate aftermath, it looks as though banks’ short term  interest rates are spiking. That means higher benchmark for short-term, LIBOR-based multifamily borrowing. On the positive side, Treasury yields have fallen further. This is a plus for longer-term, fixed-rate loans, provided spreads do not widen further—which is a big if. If the bailout plan should eventually pass, that should have a…

By Keat Foong, Executive Editor Phew! What a week! Our very own event Multi-Housing World 2008 Conference and Exhibition was held in Denver last week. Within less than a week—a week—prior to the conference starting, the following happened: The government took over Fannie Mae and Freddie Mac, Lehman Brothers collapsed, and the sale of Merrill Lynch was announced. And on the day the conference began, on Wednesday, the newspapers were filled with reports of the government bailout of insurance giant AIG. The next day, the stock market plunged. And by the end of our three-day educational and networking get-together, the…

Sooner or later everyone comes to Rick’s Place… Woman: What makes saloonkeepers so snobbish? Banker: Perhaps if you told him I ran the second largest banking house in Amsterdam. Carl: Second largest? That wouldn’t impress Rick. The leading banker in Amsterdam is now the pastry chef in our kitchen. Banker: We have something to look forward to. (c) Casablanca – 1942— The Federal Government is about the embark, one way or another on one of the largest taxpayer led bailouts of the century. I was going to wait to really comment on this until the dust settled because as of…

The Taxman is Hungry For a long time now, commercial properties, especially apartment owners have had a peaceful relationship with most taxing authorities. The cities  recognized that apartments were good housing for their residents and wanted to appear to have a balanced housing policy. Apartment developers obliged by adding units and taking advantage of local subsidies or other incentives. It appears that all bets are off. Acccording to a recent report by the National League of Cities detailing "City Fiscal Conditions," home price declines, increasing expenses at the municipal level and decreasing assessments have wrought havoc with city budgets. In…

By Keat Foong Speakers at a panel at the Multi-Housing World 2008 Conference and Exhibition held in Denver came down squarely against placing apartment properties on the market. The session was titled Apartment Investment Cycle: Is it Time to Sell, Hold or Buy? "Do not sell unless you have to," said Ronald Brock, president and CEO, Pierce Eislen Inc. "This is not the time to be selling." "Do not sell. This is not the time to be a seller," said Keith Rosenthal, co-founder and president of Phoenix Realty Group, echoing Eislen.  Brock, a market researcher, said rental apartment conditions are…

Beware the Ides of September? What a difference a couple years can make. Between Bear Stearns becoming a term of art, as in "he got Bears Stearned," and now the news being overrun with banks failing (as many as 20 with more on the way), it just got more interesting. In the interest of full disclosure, I used to work someplace that was taken over by Lehman Brothers Holdings, so no, I’m not bitter. (Ha, Ha,  Ha, Ha, oops, I mean, gee what a shame…) It’s important to remain neutral, so I’m going to share something that might surprise some…

While the economy has continued to show signs of weakness as of late, the federal government’s bailout of beleaguered mortgage agencies Fannie Mae and Freddie Mac came as a welcome relief to many, although it is unclear at this point just how much of an effect the plan will have on the housing market and the economy overall.  After weeks of speculation, the government took over the struggling agencies on Sunday. The rescue plan will extend as much as $200 billon in support to Fannie and Freddie and places the agencies under a conservatorship to be overseen by the Federal…