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The Pension Real Estate Association (PREA) surveyed some of their member firms in May regarding their forecasts for the U.S. commercial real estate markets. Respondents predict apartment investments will register a total investment return of 11.4 percent this year. Total apartment investment return (on the NCREIF Property index) is expected to fall in subsequent years, though, to 9.3 percent and 9.2 percent in 2011 and 2012, respectively. The apartment investment returns prediction for this year breaks down to 5.5 percent in income returns, and 5.9 percent in appreciation returns. Sixteen firms participated in the survey this quarter, with the firms…

At CRE Finance Council’s June convention held in New York last week, some financiers were saying that CMBS standards are already slipping, very quickly. More lenders are entering the CMBS space, seemingly bullish about the prospects for a robust volume of lending. That drive for business, however, creates fierce competition among these players. “Unfortunately,” the “race to the bottom” is already upon the market, said one speaker. The players are “nearly repeating the mistakes of the past.” Pricing is being being squeezed again, until the pull backs in the last week. When one lender offers interest-only financing, others feel obliged to follow….

What recovery? The housing market has, if anything, made fresh turns downwards recently. The homeownership rate has dropped to 66.4 percent, the level in 1998. It seems recovery in the housing market has not come in at least the first half of this year. Meanwhile, a new report from the Joint Center for Housing Studies of Harvard University confirms that new home sales continue near record lows, and existing home sales remain depressed. Vacancies and foreclosures continue to push down housing prices, says the Joint Center. Contrary to assertions about a structural change in people’s desires to own homes, perhaps many…

The CMBS delinquencies rate dropped in May by the biggest amount in two years. The percentage of loans that are 30+ days delinquent, in foreclosure or REO fell by 5 basis points to 9.60 percent, according to Trepp LLC. The value of delinquent loans is now $61.5 billion, says Trepp. “While there may be additional bumps along the way, we think the May numbers accurately reflect a leveling off in the market,” says Manus Clancy, managing director of Trepp. The delinquency rates for industrial and office property loans worsened, although office property loans had the lowest delinquency rate at 7.23 percent….

As they say, we won’t see a desirable employment environment in the U.S. soon. U.S. GDP growth is not expected to hit 3 percent until 2014. That analysis comes from the international real estate group Grosvenor. Grosvenor declined to call the current economy “robust.” “Analysts are pointing to major shifts in structural unemployment in the U.S. as a result of the recession,” says the real estate group. “The construction industry is a prime example of why so many people are staying unemployed for so long,” states Eileen Marrinan, director of research for San Francisco-based Grosvenor Americas. “Their skills are simply not in…

Delinquencies rates remain high, though there is light on the horizon. The CMBS conduit/fusion delinquency rate is now 9.22 percent, an increase of six basis points, according to Moody’s Investors Service. To place it in perspective, Fannie and Freddie’s multifamily delinquency rates come in below 1 percent, while the CRE delinquencies of life insurance companies are about 4 percent. “We expect the delinquency rate to run high-single to low-double digits over the near term,” states Tad Philipp, director – CRE Research, of Moodys Investors Service. “The resolution process is in full swing, and liquidations should roughly balance new defaults.” The…