- November was a positive month for the CMBS market with more than $10 billion issued and AAA spreads declining to below 95 bps. Despite concerns earlier in the year that rising interest rates would impact financing activity, Bloomberg reported $63.5 billion of offering so far this year and another $14.5 billion in the works. The ongoing health of the CMBS market is very important to balance sheet lenders as it impacts how they underwrite their exit through a refinancing.
- Global Investment sales activity, including recapitalizations, is back to 90% of 2007 levels. U.S. and Europe are still at ~50% of their respective maximum levels in 2007, but Asia Pacific is up nearly 90%. New York remains the top global market by transaction volume with $34.1 billion of activity through the third quarter. Tokyo, London Metro, Shanghai, and LA Metro round out the top five.
- Development in the top five gateway cities of NY, Boston, San Francisco, Los Angeles and Washington D.C. has picked up. In Q3 2013, the percent of inventory under construction in the top five gateway cities increased to 1.5% from 0.5% in Q3 2012.
- The national economy remains in slow growth mode as the uncertainty created by the seemingly endless series of budget confrontations inhibits both businesses and consumers, who’s balance sheets are healthy but confidence is low. Once the December/January/February deadlines are resolved and there is certainty around funding and tax levels, the underlying health of the U.S. private sector is expected to assert itself leading to stronger growth in 2014 and 2015.
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