Asia Pacific REIT Market Could Swell to $500 Billion

REITs continue to hold their strength, even in weakened global real estate markets, according to the Asia Pacific Real Estate Association (APREA).

APREA CEO Peter Mitchell told the Malaysian National News Agency (BERNAMA) the REIT structure continues to be a fundamental driver of the securitization of real estate holdings in many international markets. 

"It has proved remarkably resilient in the face of the global financial crisis, particularly in Asia, because of their transparent and liquid characteristics." Mitchell said.

"Asia has the lowest level of securitized real estate in the world," Mitchell said. "It is estimated that only about 4 per cent of investment grade real estate in Asia is held in REIT-type structures,"

"Taking that last point, assuming an ultimate level of securitization of investment grade real estate of 25 per cent suggests a market that could grow to well over $500 billion US.  

"REITs in the US, Asia and Australia have recovered and performed much more strongly than other real estate asset classes since the crisis," he told Bernama.

Citing  Ernst & Young data, Mitchell said the global REIT market has grown to a total market capitalization of $568 billion US, growing by $138 billion last year alone. "Much of this growth has been in Asia," he said.

Just  before the launch of the first Japanese REIT (J-REIT), the market capitalization of REITs in Asia was around $2 billion US, he said. Five years later, it was about $50 billion.

"Today, there are about 144 Asian-based REITs with a market capitalization of approximately $127.7 billion US," he said.

On a total return basis, Mitchell told Bernama Asian REITs in most countries have outperformed equities regularly, particularly since the global financial crisis, and they have been superior performers on a risk and risk-adjusted return basis.

He noted the growth has been phenomenal, but the Asian REIT industry is only in its infancy, accounting for only 11.5 per cent of all global REITs, Bernama reported.

Mitchell told Bernama major investment banks confidently predict that in the near future market capitalization will comfortably exceed $100 billion US and continue to grow exponentially.

He said a number of compelling underlying factors for this growth include a large portion of real estate in Asia still held in private hands and weigh heavily on company balance sheets.

"This is not sustainable long term Mitchell said. "The REIT format is a much more efficient way for companies to hold real estate assets,"

Regardless of when India and China introduce their own REIT markets, their strong growth alone "will have cascading effects on the regional economies," Mitchell told Bernama.

Other factors, he noted, include more countries introducing REIT regimes, as in the Philippines, and more investment grade stock coming into the market "in the wake of strong economic growth throughout the region," Bernama reported.

Santa Catalina Island: Twenty Six Miles Across The Sea

Avalon Bay feels a million miles from home... (Courtesy Catalina Island Chamber of Commerce)

Santa Catalina Island became famous because of a 1958 song about "the island of romance" that was "twenty-six miles across the sea."

But a lot of people - very famous, very wealthy people - actually knew about it long before that.

The island was purchased by William Wrigley, Jr. (of Wrigley's Gum and Chicago Cubs fame) in 1919 - sight unseen! He developed it as a resort, and a spring training home for his Cubs. He also opened the island up to film production, and several hundred were filmed here. There's a living legacy to those days. To film a movie based on a book by Zane Grey, the producers brought 14 buffalo here in 1924. The scenes of the island were cut. But there are now some 200 buffalo roaming the interior.

Charlie Chaplin and his wife Paulette Goddard were frequent visitors.  So were Mr. and Mrs. James Cagney, Hollywood producer Cecil B. De Mille, and Clark Gable.

Zane Grey liked it, too. In 1926 he built a pueblo-style home on the hillside overlooking Avalon Bay.  He spent most of his later life here, writing some of his 89 books. His home is now the Zane Grey Pueblo Hotel.

Most people who live here - there are 3,500 in the main town of Avalon - don't have cars. (There's a 20-year wait-list.) The main means of transport is golf carts. But the best means is self-propulsion. Avalon's great for walking; it's a charming village on a harbor, with beautifully-restored homes, shops, and restaurants.

Your footsteps might be the only ones. (Courtesy Catalina Island Chamber of Commerce)

Catalina Island's landmark is the striking white Casino, an Art Deco treasure built in 1929. There's no gambling, though; the building was actually named after an Italian word meaning "place of entertainment." Inside is the Catalina Island Museum, with an outstanding collection of artifact, historic photographs, and Catalina tile and pottery.

Another landmark is Chimes Tower, which has been ringing every fifteen minutes since 1925. And the distinctive Holly Hill House, built in 1890 with a red roof and striped cupola, has been faithfully restored by its current owner.

The 42,000 acres of Catalina Island's vast interior offer great camping, hiking, horseback riding,  mountain-biking, and jeep eco-tours in a protected wilderness. On your rambles, you might see Catalina Island foxes, quail, bald eagles, and, of course, the buffalo.

You can experience some of the best snorkeling and diving in the world, or take a tour on a glass-bottom boat or semi-submersible submarine. And there's also parasailing, kayaking, electric-bike tours, and the Zip Line Eco-Tour, in which you'll zip 4,000 feet from mountains to sea - 300 feet above the canyon floor at speeds of up to 40 miles per hour. You can play golf at the Catalina Island Country Club. Or you can SNUBA...diving up to 20 feet beneath the water without heavy equipment.

For a great place to stay, check out the Hotel & Ristorante Villa Portofino, a classic European-style resort on the waterfront. This AAA Triple-Diamond property has 35 beautifully-appointed rooms; and some of the suites have fireplaces, marble baths, and balconies with great views.

The Ristorante Villa Portofino has received the coveted Three Star Award for three consecutive years from the California Restaurant Writers' Association.  The décor is Mediterranean, the views are great, and the food is reminiscent of that other Portofino.

The best way to traverse these "twenty-six miles across the sea" is via Catalina Express, which departs from three Southern California bases. The high-speed boats make the trip in about an hour. And they offer upgrades to make your trip more relaxing, such as the Commodore Lounge or the Captain's Lounge.

EB-5 Visa Program Gaining Popularity with U.S. Property Developers

In the spring of 2011, when financing for new hotels in the U.S. was scarce, a Seattle-based investment firm called American Life, Inc., and Portland, Oregon-based Williams/Dame and Associates, announced that they would develop a two-hotel complex in downtown Los Angeles on a site owned by AEG, a Los Angeles-based entertainment company.

The two-hotels, a 174-room Courtyard by Marriott and a 218-room Residence Inn by Marriott were to be developed using EB-5 funding from immigrant investors. The EB-5 program, sponsored by the US Citizens and Immigration Services (USCIS), which is part of the Department of Homeland Security, has two subcategories: the traditional EB-5 program and the regional center program.

The traditional program involves investing $1,000,000 into a business, actively managing it, and creating 10 direct jobs. In contrast, the EB-5 regional center program allows developers to pool foreign investor funds into a limited partnership and invest its capital into qualifying projects approved by the USCIS.

As the investments are almost always in a high-unemployment or rural area, the investment amount is $500,000 and indirect job creation is permitted. Due to the lower investment amount and the relaxed job creation requirement, during FY 2011, 90% to 95% of foreign investors used the regional center model rather than the traditional program.

While the EB-5 program has been around for about 20 years, it only started to take off in the last five years, said Roger Bernstein, a Miami-based immigration attorney with Bernstein Osberg-Braun, who spoke on the subject to an audience of local and international real estate brokers gathered at the Miami Association of Realtors International Real Estate Congress on November 5th. South Florida is a hot spot for EB-5 visas, he said. There are now 250 regional centers throughout the country, but in Florida alone, there are 20.

See related news story on WORLD PROPERTY CHANNEL:

• Foreign Buyers Still Boon to Florida Housing Market in 2012, Especially Miami-Dade County

The Florida Overseas Investment Center is a regional center in Ft. Lauderdale. Its job is to administer the EB-5 program for its area. In this case, the EB-5 investors are loaning money to the developer of a 135-room hotel on Ft. Lauderdale Beach. "The regional center makes sure that (the developers) follow the letter and spirit of the law," said Bernstein. The project needs $30 million and most of that has been raised in China, he said.

There are two ways for immigrants to invest in regional centers, by contributing equity or debt, said Bernstein. The equity model is favored for long-term investment, he said. "The debt model involves loaning proceeds to a developer," which investors should do cautiously, said Bernstein. But, by definition, these types of investments are all "at-risk investments," he said

Miami Condo Prices Spike 28% in Q3 Over Last Year

(Miami, FL) -- According to the Miami Association of Realtors, the performance of the Miami-Dade County residential real estate market continues to create opportunities for sellers, as limited supply and strong demand consistently yield significant price appreciation.

Median and Average Sales Prices

The median sales price for single-family homes in Miami-Dade County rose 5.06 percent to $189,000 in the third quarter of 2012 compared to the third quarter of 2011, and 2.2 percent compared to the second quarter of 2012. The median sales price for condominiums was $145,000, an increase of 28 percent year-over-year.

"The Miami real estate market continues to perform remarkably well despite the shortage of housing inventory that is limiting potential sales," said Martha Pomares, 2012 Chairman of the Board of the Miami Association of Realtors. "Such performance is reflective of the strong demand being fueled by both U.S. and international buyers.  Buyer interest will continue to positively impact our market long into the future."

Year-over-year, the average sales prices for single-family homes and condominiums increased 6.2 percent to $347,716 and 19.3 percent to $276,883, respectively.

Nationally, the median sales price of existing single-family homes was $186,100 in the third quarter, up 7.6 percent from the third quarter of 2011, according to the National Association of Realtors.  The national median sales price for condominiums was $180,800, a 7.7 percent increase over the previous year.

Homes Sales Remain Keeps Pace with Record Levels in 2011

Miami-Dade residential sales - including existing single-family homes and condominiums - increased a 0.61 percent in the third quarter, from 6,672 to 6,713, compared to a year earlier.  Following a record-breaking year in 2011, sales in Miami remain at historically strong levels.  In the third quarter, Miami sales of existing single-family homes increased 0.07 percent compared to a year earlier. The sales of existing condominiums increased one percent compared to the third quarter of 2011.

Miami, Dubai and London Among Top Global Cities Enjoying Double-Digit Price Growth in 2012

South Beach, Miami

According to a new Global Cities Report by London-based real estate consulting firm Knight Frank, fifteen of the 26 cities tracked by the Prime Global Cities Index (58%) recorded flat or positive price growth in the year to September, but over the last quarter 20 of the 26 cities (77%) have seen flat or positive growth - indicating an improving scenario.

The index now stands 18.7% above its financial crisis low in Q2 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9%, 45.4% and 39.5% respectively.

Five cities recorded double-digit price growth in the year to September; Jakarta, Dubai, Miami, Nairobi and London - a city from each of the five key world regions.

Knight Frank Global Cities Report Highlights for Q3, 2012

• The index rose by 1.1% in the three months to September, down from 1.4% last quarter

• Prime prices across the 26 cities tracked by the index increased by 3% in the 12 months to September

• Cities in Europe remain the weakest performers, recording a fall of 0.5% on average in the last 12 months

• Jakarta (up 28.5%) was the strongest performer in the year to September

• Economic uncertainty together with few strong-performing alternative asset classes is strengthening demand for luxury bricks and mortar

Dubai, UAE

Although Asia heads the pack - Jakarta recorded 28.5% annual growth - the results this quarter suggest that demand for luxury homes is only loosely linked to the strength of regional economies (Asia Pacific has only two cities in the top ten compared to Europe's three). Instead, the flow of international wealth and the attitudes of HNWIs are increasingly influential.

Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility.

Not all prime residential markets are benefitting from the global economic uncertainty. In Paris, although prices held firm in the third quarter, sales activity was muted as buyers of all nationalities adopted a "wait and see" attitude. Vendors are unwilling to reduce prices until there is greater clarity from President Hollande and the Eurozone leaders in relation to the debt crisis.

Asia's prime markets look to be entering a period of more moderate growth due in part to the regulatory measures aimed at cooling prices and improving domestic affordability.

London, UK

James Price of Knight Frank's International Residential Development team tells World Property Channel, "Aside from London, it would appear the other strong performers are either those established international markets that experienced a lull but are now 'kicking on' again (e.g. Miami, Dubai) or those that could be described as second tier international cities - strong established markets, but not global 'gateway' cities (e.g. Zurich, Vienna, San Francisco), where interest has driven price rises from a lower base."

Blackstone Lays Out $200 Million In India's Biggest Acquisition Deal

New York City-based Blackstone is investing $200 million (Rs 1,000 crore) for a 50 percent stake in three Indian business parks totaling 10 million square feet. The deal is being called the largest of its kind to date in India.

The properties are Embassy Golf Link and Manyata Embassy Business Park in Bangalore and Embassy Tech Zone in Pune.

Embassy Property Developments is currently 51%-owned by Embassy, which will now purchase the remaining 49% of share capital from Mauritius-based financial investor Alta Vista. That transaction will make Alta Vista a subsidiary of Embassy Property Developments, according to the Asian Venture Capital Journal.

A Blackstone spokesman in New York said the private equity firm does not comment on pending or completed transactions.

The Economic Times of Mumbai reports the Blackstone deal beats Citigroup's acquisition of a Mumbai office building earlier this year for Rs 985 crore. That transaction eclipsed Maple Tree's Rs 800-crore buyout of two million square feet from Assetz Global Technology Park and Baring PE Partners' Rs 500-crore investment in RMZ Corp for six million square feet.

Embassy Golf Link is a five-million-square-foot, 65-acre, business park. Manyata Embassy Business Park is a 100-acre integrated mixed-use development business park with a developable area of 18.29 million square feet.

Embassy TechZone in Pune is spread over 70 acres with 52 acres designated for a special economic zone.

Big-name tenants at Embassy properties in Bangalore and Pune include IBM, Capgemini, Mercedes Benz, Atos Origin and Accenture. Blackstone and Embassy will jointly control and manage the entity in which the fund has invested. Embassy will be responsible for completing the project,

The Economic Times reports Embassy has developed nearly 25 million square feet  mainly in business parks valued at an estimated  Rs 10,000 crore ($2 billion US).

The company is also increasing its presence in the residential segment and has eight residential projects totaling 10.56 million square feet under construction. It has a total debt of Rs 1,200 crore, of which 85% is linked to rentals. The company has a total land bank of 1,300 acres in Bangalore.

Buffalo Lender Provides $92.6 Million to TIAA-CREF for Apartment Buy in Washington DC

MassCourt East End luxury apartments, Washington DC

M&T Realty Capital Corp., a wholly-owned subsidiary of 156-year-old Buffalo, NY-based M&T Bank (NYSE: MTB), has loaned New York City-based TIAA-CREF $92.6 million to buy the 371-unit MassCourt East End luxury apartments in the Mount Vernon Triangle neighborhood of Washington, DC.  Terms of the financing were not disclosed in a news release from the Washington office of HFF which arranged the deal.

India's First REIT Raises $81.3 million in Over-Subscribed Issue

Investors in Asia, Europe and the U.S., looking for a vehicle to fight inflation, have over-subscribed India's first real estate investment trust.  Singapore Stock Exchange-listed Ascendas India Trust (a-iTrust) closed when it reached $81.3 million (Singapore $100 million).

The trust was initially looking to raise $70 million Singapore dollars. (One Singapore dollar equals 81 cents US)

The private placement is offering new units in a-Trust. at 72 Singapore cents per unit. The joint placement agents were Citigroup Global Markets Singapore Pte. Ltd and DBS Bank Ltd.

According to the company's statement, the placement saw strong participation from Asian, U.S. and European investors and was about 2.6 times subscribed based on the upsized issue of S$100 million or 139 million New Units. The new units represent 18 per cent of existing units.

The company said the issue price of S$0.72 per new unit represents a discount of 9.2 per cent to the adjusted volume weighted average price (vwap) of S$0.7933 per unit for trades in the units on the SGX-ST for the full Market Day on September 27 and a 22 per cent premium to the net asset value per unit based on a-iTrust's unaudited financial results for the first quarter ending June 30.

An announcement will also be made when the date the new units are expected to be listed on the SGX-ST.

Ascendas India Trust was publicly listed in 2007. This  is the fund's first attempt in issuing a follow-on equity fund raising for its private placement. The money raised through this offer will be used to finance a-iTrust's initiatives, the company said.

a-iTrust is developing Aviator, a 6 lakh square feet multi-tenanted building in International Tech Park Bangalore (ITPB) due for completion in December 2013.

U.S. Construction Market Annualized Spend Rate at $851.6 Billion in September

According to the U.S. Census Bureau of the Department of Commerce, U.S. construction spending during September 2012 was estimated at a seasonally adjusted annual rate of $851.6 billion, 0.6 percent (±2.1%) above the revised August estimate of $846.2 billion. The September figure is 7.8 percent (±2.1%) above the September 2011 estimate of $790.3 billion.

During the first 9 months of this year, construction spending amounted to $624.8 billion, 8.9 percent (±1.3%) above the $573.7 billion for the same period in 2011.

Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $580.5 billion, 1.3 percent (±1.3%) above the revised August estimate of $572.8 billion. Residential construction was at a seasonally adjusted annual rate of $285.9 billion in September, 2.8 percent (±1.3%) above the revised August estimate of $278.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $294.6 billion in September, 0.1 percent (±1.3%)* below the revised August estimate of $294.8 billion.

Public Construction

In September, the estimated seasonally adjusted annual rate of public construction spending was $271.1 billion, 0.8 percent (±3.1%) below the revised August estimate of $273.4 billion. Educational construction was at a seasonally adjusted annual rate of $66.7 billion, 0.8 percent (±3.6%) below the revised August estimate of $67.2 billion. Highway construction was at a seasonally adjusted annual rate of $78.4 billion, 1.6 percent (±7.4%)* below the revised August estimate of $79.6 billion.

Escalante Golf Unveils New Master-plan for Florida's Black Diamond Development

Black Diamon Quarry Course

Escalante Golf, owner-operator of the exclusive Black Diamond golf club, recently unveiled a new multi-million dollar master-plan for the iconic golf course development. Located about 75 miles north of Tampa, Black Diamond is highlighted by the famed Tom Fazio-designed Quarry Course.

In concert with Black Diamond's 25th anniversary, the master-plan features a major clubhouse redesign; numerous golf course enhancements including bunker renovations, course lengthening and amenity upgrades; and new residential products and memberships.

"Our goal is to build on Black Diamond's world-class reputation to ensure the club's long-term sustainability and exclusivity," says David McDonald, president of Escalante Golf. "The comprehensive master-plan demonstrates a continuing commitment to our existing members, and is a point of pride and emphasis in attracting new members and residents who share our vision and values."

Phase one begins this month with extensive clubhouse renovations. The new interior design was crafted by nationally recognized, Club Design Associates and features upgrades to the dining facilities, boardrooms, outdoor patios, flooring, furniture and mechanical systems. The second phase will focus on the golf shop, retail environment and locker rooms.

To further elevate the Black Diamond experience, golf course architect David Whelchel will work closely with Escalante and Black Diamond to identify opportunities to lengthen and modernize the golf courses.

Meanwhile, in another sign of a rebounding Florida real estate market, Black Diamond Real Estate was beginning construction on the community's first "show" home called The Augusta. Overlooking the fourth hole on the Highlands Course, the architecturally appealing and energy efficient home marks a new era of home building inside the private gates.

Black Diamond's new 2,800-square-foot model home features two master suites, a guest bedroom, three baths, study, extended lanai, family organization area, and several flex options.  According to Black Diamond officials, delivery of the Augusta show home is scheduled on or around December 15 in time for the 2013 season.

Also in the works at are Golf Cottage designs starting at 1,900 square feet, and Village Homes starting at 2,200 square feet.  Construction of these models is scheduled for late fall.  Three best in class builders are also available for design and construction of custom homes on available lots

57,000 U.S. Foreclosures Completed in September, Says CoreLogic

According to CoreLogic's latest National Foreclosure Report for September, there were 57,000 completed foreclosures in the U.S. in September 2012, down from 83,000 in September 2011 and 59,000 in

August 2012. Prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 3.9 million completed foreclosures across the country.

Approximately 1.4 million homes, or 3.3 percent of all homes with a mortgage, were in the national foreclosure inventory as of September 2012 compared to 1.5 million, or 3.5 percent, in September 2011. Month-over-month, the national foreclosure inventory was down 1.1 percent from August 2012 to September 2012. The foreclosure inventory is the share of all mortgaged homes in any stage of the foreclosure process.

"The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market," said Anand Nallathambi, president and CEO of CoreLogic. "Increasingly improving market conditions and industry and government policy are allowing distressed homeowners to pursue refinancing, loan modifications or short sales rather than foreclosures."

"Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year," said Mark Fleming, chief economist for CoreLogic. "While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27 percent year over year in August, continue to gain popularity."

Highlights as of September 2012 include:

• The five states with the highest number of completed foreclosures for the 12 months ending in September 2012 were: California (108,000), Florida (92,000), Texas (59,000), Georgia (55,000) and Michigan (51,000). These five states account for 47.7 percent of all completed foreclosures nationally.

• The five states with the lowest number of completed foreclosures for the 12 months ending in September 2012 were: South Dakota (20), District of Columbia (58), Hawaii (436), North Dakota (583) and Maine (625).

• The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.5 percent), New Jersey (7.3 percent), New York (5.3 percent), Illinois (5.2 percent) and Nevada (4.9 percent).

• The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.7 percent), North Dakota (0.7 percent), Nebraska (0.9 percent) and South Dakota (1.1 percent).

Russia's Commercial Real Estate Market Reviving Slowly

Without citing specific figures, the Voice of Russia states the commercial real estate market in the country is slowly reviving but has a long way to go.  Office space, especially, is in demand but supply is low.

CBRE Russia predicts the market should begin recovery by the end of this year following a sharp economic downturn in the country.

Knight Frank forecasts office rents will begin to rise by the end of this year due to limited delivery of new space.

The Voice of Russia notes the commercial real estate market was among those hit particularly hard by the 2008 world financial crisis,

Growth prospects in Russia  are "significantly impeded by uncertainty surrounding the European debt crisis worries, with investors clearly focusing on prime property and risk avoidance," the Voice of Russia reports.

"Along with this trend, the volume of transactions on the commercial real estate market in the UK and Germany this year far exceeds that of other European states."

The Voice of Russia concedes  "the country's office space segment can hardly be called a 'safe haven' due to its ever-present cloud of volatility. At times of economic instability, foreign companies strive to shed all non-core operations, making it unrealistic to expect any sizable expansion of their presence in the country."

The Voice of Russia cites CBRE data that show in 2012 only 20% of investments in Russian commercial real estate market came from abroad, while 80% has a domestic origin.

Valentin Gavrilov, research director at CBRE Russia, told the Voice of Russia by  phone, "The main problems are volatility and lack of investment grade assets in Russia currently. One emerging trend that we see is related to foreign investors' readiness to enter projects on early stages of construction. They are trying to develop high quality properties themselves, rather than search for completed assets."

Gavrilov added, "The process allows us to speculate about a transition that is presently happening in this segment. As a result, foreign players become more accustomed to building high grade objects themselves with the aim to either sell them later on, or keep them for investment purposes."

Seoul's D-Cube City, Moscow's Kuntsevo Centre Win Top Emerging Market Design Awards at Dubai Cityscape Conference

D-Cube City, Seoul

(Dubai, UAE) -- During a recent awards ceremony held in Dubai, Cityscape Global awarded two Jerde designed projects top honors at the formal event held at the Armani Hotel in the base of the Burj Khalifa tower.

The Jerde Partnership, a Los-Angeles based international architecture design and urban planning firm, received the Built Retail Award for D-Cube City and the Future Retail Award for Kuntsevo Centre in Moscow - becoming the first firm to have winning projects in both categories.  The developers for the award-winning projects are Daesung Industrial Co., Ltd, and ENKATC LLC, respectively. The Cityscape Awards reward excellence and celebrate outstanding performance in real estate and architectural design across emerging markets globally.

"Receiving awards for D-Cube City and Kuntsevo Centre among such a talented group of our peers is a tremendous honor," says Sergio Zeballos AIA, Jerde design partner.  "With each Jerde Place we design, we strive to create the present day and future landmarks for the community."

Kuntsevo, Moscow

D-Cube City was the first of its kind mixed-use, transit-oriented development to open in Seoul in over a decade when it was completed in September 2011. 

The design integrates retail, entertainment and cultural districts with an iconic office-hotel tower, two residential towers, and over six acres of landscaped gardens, parks and plazas to create a major new public space in the highly dense capital city.  Samoo Architects & Engineers served as the local Korean executive architect and designer of the residential.

Burj Khalifa Tower at night (Dubai, UAE)

One of the premier Jerde Places in progress, Kuntsevo Centre, is a mixed-use development with over 200,000 square meters in the prominent Kuntsevo district of Moscow that integrates residential and commercial office space, retail, entertainment, spacious rooftop amenity decks and public plazas designed to catalyze the urban public realm--a trademark of Jerde Places.  The project is scheduled for full completion in 2015.

"Cityscape is unique because it raises the profile globally for the work we are doing in these dynamic growth regions that are a driving force in the global real estate market," says David Rogers FAIA, Jerde co-design director.

The Cityscape Awards for Emerging Markets reward excellence in architecture and design from the emerging regions of the Gulf States, the Middle East, Africa, Latin America and Asia (excluding Japan, New Zealand and Australia), and seek to recognize architects for projects incorporating outstanding design, performance, vision and achievement.

As Hurricane Sandy Nears U.S. Northeast, Almost 284,000 Mid-Atlantic Homes Valued at $88 Billion at Risk of Property Damage

According to CoreLogic, the potential exposure to residential property damage from hurricane-driven storm-surge flooding as Hurricane Sandy makes its way toward the U.S. Atlantic Coast is significant.

"On its current projected track as of this weekend, Sandy is likely to make landfall along the northeastern Atlantic coast early next week," said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions.

CoreLogic North Atlantic Storm Surge Risk (Click here to enlarge)

"This is a large, slow-moving, persistent and dangerous storm. Its impacts are going to be far-reaching and no doubt very costly. Sandy could pose an enormous threat to major metropolitan areas in the Northeast, from Virginia Beach and Washington, D.C. to New York City and Boston."

The data shows nearly 284,000 total residential properties valued at almost $88 billion at risk for potential storm-surge damage among the coastal Mid-Atlantic States, assuming the storm hits the coast as a Category 1 hurricane. Within that region, more than 238,000 total properties valued at nearly $75 billion stand at risk in eight major metro areas from Virginia to New England.

Total number and total value of residential properties by coastal Mid-Atlantic state are:

The number of residential properties in each metro area and their respective potential exposure to damage are as follows:

Hurricane-driven storm-surge flooding can cause significant property damage when high winds and low pressure causes water to amass inside the storm, releasing a powerful rush over land when the hurricane moves on shore. The CoreLogic analysis measures damage from storm surge and does not include potential damage from wind and rain associated with hurricanes.

Law Firm Office Expansions Occurring in Asia and North Africa, Driven By High-Growth Economies

Tom Carroll

According to Jones Lang LaSalle's Global Law Firm Perspectives 2012, strong economic growth in emerging markets is driving law firm office expansions across the Asia Pacific and Africa regions.

"Law firm real estate trends vividly illustrate current global economic polarization," explained Tom Carroll, Director - Corporate Research, Jones Lang LaSalle. "While firms focus their sights on high growth emerging markets in Asia and Africa, a tenant favorable market will continue in North America and much of Europe for quite some time."

The JLL report reveals the following key worldwide legal industry real estate trends:

• A Return to growth via economic cross pollination - Larger multi-national firms are breaking their years of caution, as emerging market expansion returns to the agenda. Growth in emerging markets is driven by firms based in mature markets such as the U.S. and Western Europe, which want to be geographically aligned with the high growth economies in the Asia/Pacific, Middle East and Africa regions. For example, the growth of Western business interests in China has spurred law firm growth in Beijing, Shanghai and Hong Kong.

• Corporate outsourcing driving demand - Multi-national corporations are outsourcing more legal work, driving demand for legal services typically provided from low-cost locations.

• Law firm M&A shaping cities - Western law firms are partnering with local firms in emerging markets to serve expanding corporate clients, while cross-border M&A activity is also on the agenda.  For example, in Morocco, Bird & Bird formed an alliance in Casablanca with El Amari & Associes, a legal services provider. Additionally, a cluster of M&A activity has occurred with Australian firms as U.S. and U.K. firms seek to expand their presence in the region.

• Germany progressing - Emerging as an IP litigation center and continuing its economic leadership, German cities like Hamburg and Munich are welcoming new firms and office expansions.

• New workplace strategies: lease expirations drive focus on productivity - In North America and Europe, firms are using less office space per attorney, deploying new workplace strategies designed to drive productivity and efficiency, often prompted by lease expirations.

Variable Rental Rate Cycles

"In global markets, law firm rents are influenced more by overall market conditions than by legal industry trends," explained Carroll. "Many markets are recovering economically, but still offer low rents because the market cycle has yet to drive rate increases."  Incentives (or lack thereof) can vary from market-to-market as well.

For example, consider the following contrasts:

• In Hong Kong, tenants are incentivized with an average of 2-3 months' free rent; in Tokyo, the number is 9-12 months free.

• In Melbourne, where the Class A vacancy rate sits at a comparatively low 6 percent, average prime gross rents come in at A$517 per square meter. Yet in Sydney, with a higher 9.3 percent Class A vacancy rate, rents remain much higher than Melbourne's at A$925 per square meter, thanks in part to higher underlying property values.

Richard Proctor

"Rents are highly variable city-to-city, even within the same region or country," said Richard Proctor, Head of Central London Tenant Representation and Lead Director, EMEA Law Firm Practice, Jones Lang LaSalle. "Firms can find deals where rents are just beginning to rise, but remain close to the market bottom. It is critical for law firms to apply their forensic skills to their real estate portfolios to achieve an optimal outcome."

Tenant mix influences market trends

"'As go law firms, so goes the office market' is a sound guiding principal for North America," explains Elizabeth Cooper, Jones Lang LaSalle International Director and co-chair of the firm's law firm practice. "In contrast, anchor tenants in Europe, Asia and North Africa are more likely to be corporations, so law firm trends are not market-movers in quite the same way." In the U.S., law firms lease, on average, more than 15 percent of Class A office space in urbanized markets. In contrast, only two cities outside North America show law firms leasing more than 10 percent of Class A office space in the central business district."

The study, an annual barometer of law firm real estate trends around the world, characterizes a performance gap between advanced and emerging economies-and a renewed interest from large law firms in bridging that gap.

Investors See Bargains in Depressed Greek Real Estate

Athens, Greece

Real estate, and especially commercial real estate, is beginning to play a strong role in the economic recovery of Greece, according to brokers, bankers and consultants in Athens and London.

One big reason is the coalition government led by conservative Prime Minister Antonis Samaras that came to power in June has impressed some investors. Samaras promised to do everything needed to keep bailout funds flowing, easing fears of bankruptcy and leaving the Euro zone.

Even German Chancellor Angela Merkel, who calls the shots on bailout programs for sick Euro zone members, has eased her former position on allowing Greece to default on its debt.  Other Euro zone members may be following Merkel's position.

Dimitris Manoussakis, head of the Athens office of real estate consultant Savills, recently told the media the Greek government's new stance in selling state assets, including real estate as a condition of its bailout over the next several months, may start to convince some investors they will be getting a fair price on property transactions.

Greek investors, especially those living abroad, are becoming interested again in commercial property like hotels and retail, with demand even coming from the US, South Africa and Australia. Six months ago, that same interest was lacking, according to global real estate analysts.

Those potential investors are eyeing bargain prices as their incentive to step back into the market. Those same investors, however, abandoned the country when its economy was faltering and took much of their cash with them.

Reuters reported Kostas Kazolides, a London-based investor who has been investing in and advising on property deals in Greece and Cyprus for 35 years, recently said "There are deals that (once) didn't make sense but do now as the outside world takes the government more seriously."

He added, "People are talking about going back in and buying. There are villas in Mykonos going at 30 percent of their value because sellers are feeling the pinch." A 30 percent fall in construction costs was another incentive.

Data from Lipper, a Thomson Reuters company that tracks the funds industry, shows the amount of money flowing out of Greek equity funds is slower in 2012 than previous years and turned positive in August.

Chicago's Retail Market On the Rise

Chicago, IL

The Chicago retail market is having a resurgence based on a number of indicators, including retail vacancies.  In fact, retail vacancy has continued its steady decline since 2010, according to a third quarter CBRE MarketView report on Chicago's retail market.

During the third quarter, the Chicago retail market posted an 8.7 % vacancy rate, a 30 basis point decrease from last quarter, according to CBRE.

"Regional malls have some of the lowest vacancy rates, in the 3% to 4% range," says Mark Hunter, retail market lead for the Midwest at Jones Lang LaSalle in Chicago, although specialty stores' vacancy rates are higher. On Michigan Avenue, one of Chicago's most fashionable shopping districts, on the other hand, vacancy rates are about 3%, he says.

Although vacancies are down in the Chicago market, net asking rents were flat in the third quarter, only rising from $16.76 per square foot in the second quarter to $16.77, according to CBRE's MarketView, which reports the average for the metropolitan area for all type of centers. Asking rents at premium malls' start at $40 per square foot, says Hunter.

Retail investment sales have picked up over the last year in Chicago and other major markets, says Hunter. "Trophy properties are trading at a premium," he says.

Seattle Enjoying Strong Office Investment Sales in 2012

Seattle, Washington

This past August, Paul Allen's Vulcan Real Estate, based in Seattle, put the 1.8 million-square-foot Amazon.com headquarters, located in downtown Seattle, up for sale. As of this month, Amazon.com has a $1.16 billion ($644 per square foot) contract on the 11-building complex that may close before the end of 2012, says Ann Chamberlin, managing director at Jones Lang LaSalle in Seattle. Amazon began moving into the building in stages beginning in fourth quarter 2011, she says.   

"Amazon didn't expect to buy the building, but Vulcan, wanted to free up money for more development," says Chamberlin. "This is a good time to sell investment properties," she says. Seattle commercial real estate has become sought-after by institutional investors in the last couple of years, notes Chamberlin.

Vulcan has developed more than five million square feet of office space in the South Lake Union submarket, where the Amazon complex is located. It is one of strongest submarkets in downtown, with less than a 3% vacancy rate. "That is very low, given that overall, Seattle's office market vacancy rate is about 14%, "says Chamberlin. The strength of this submarket can be attributed to the strong technology and bio-medical businesses in the area, she says. "Microsoft has been the driver for the East Side market," including downtown Bellevue and the South Lake Union submarket is driven by Amazon."

Noting the strong investment sales market in the Seattle area, Chamberlin says, "The Amazon headquarters sale could well set a record," with regard to price, for all of North America."  

Institutional buyers, including the Principal Financial Group, Cole Real Estate Investments, JP Morgan Chase and Kilroy Realty Corp., among other institutional players, have gravitated to Seattle in the last couple of years, while foreign buyers started to show increased interest in the Seattle office market in late 2011, says Chamberlin

Federal Suit Alleges Bank of America 'Hustled' U.S. Agencies for Billions

Bank of America, no stranger to billion-dollar lawsuits, today faces another one - a $1 billion suit from the Justice Department.  The Oct. 24 complaint alleges the New York City-based bank fraudulently sold defective mortgages to Fannie Mae and Freddie Mac that triggered over $1 billion in losses for taxpayers and thousands of foreclosures.

The suit alleges the fraud was committed from at least 2008 through 2009.

In a prepared statement, the Justice Department said this is the first case involving Fannie and Freddie, which were the major purchasers of mortgage securities from commercial banks like Bank of America.

Huge mortgage losses at Fannie Mae and Freddie Mac forced a government takeover of both in September 2008. The two government sponsored enterprises (GSEs) were placed into federal conservatorship.

In his statement, Preet Bharara, U.S. Attorney for the Southern District of New York alleges Bank of America's fraudulent scheme was commonly known inside the bank as "the Hustle."

The suit alleges "the Hustle" was a nickname for the bank's "High-Speed Swim Lane," or HSSL program, designed to streamline the mortgage origination process. Instead, the government alleges it was "intentionally designed to process loans at high speed and without quality checkpoints, and generated thousands of fraudulent and otherwise defective residential mortgage loans."

The government says the program was started by mortgage lender Countrywide Financial, but continued after Countrywide was purchased by Bank of America in 2008. The fraud ran through 2009, the suit alleges.

"For the sixth time in less than 18 months, this office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis," Bharara said in his statement. "The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope."

Bank of America (NYSE: BAC) agreed to an $8.5 billion settlement last year in which it paid other investors burned by fraudulent mortgage securities. Those investors included money manager BlackRock (NYSE: BLK), insurer MetLife (NYSE: MET), investment management firm PIMCO and Goldman Sachs (NYSE: GS)

German Office Property Sales Up 50% in Last Nine Months

A relatively stable economic and employment status in Germany has generated office property sales of $8.22 billion (6.27 billion euros) over the last nine months, according to data researched by BNP Paribas SA's German real estate division.

In a prepared statement, the Paris-based bank said the sales surge was 50 percent higher than the comparable 2011 period and more than posted sales for all of the last five years. Berlin and Munich were investors' favorite buying locations.

The BNP statement noted office investments rose 172 percent in Berlin and 138 percent in Munich, Germany's most expensive city for workplace properties. But investments in Hamburg, Cologne and Dusseldorf declined.

"Safety-oriented investors see good conditions here due to the relatively stable economic and employment situation," Sven Stricker, head of investment at BNP Paribas Real Estate GmbH, said in his company's statement.  "Office investments have a good medium-term outlook, assuming the euro crisis doesn't escalate."

Investors are seeking a safe haven as they fear the euro zone's sovereign-debt crisis will worsen, Stricker said.

The German government predicts the country's economy will grow 0.8 percent this year. The German economy is Europe's largest. The economies of the 17 nations that share the euro are together forecasting a contraction of 0.4 percent, according to the European Central Bank

Outdoor Recreation' States Remain Top U.S. Travel Destinations; Gambling and Sports Related Travel Down in 2012

While the most popular U.S. states retained their tourist appeal this year ( Florida, California, Hawaii, N.Y. and Alaska) among American travelers, the allure of several other domestic destinations has increased.

For example, Louisiana, Michigan, Oregon and Washington, D.C., were the beneficiaries of increased tourism, while states like Alaska, Hawaii, Arizona and Tennessee saw slight decreases in interest.  At least that's what travel experts at MMGY Global/Harrison Group learned during their newly released survey, "2012 Portrait of American Travelers."

Meanwhile, many destinations that feature outdoor recreation now enjoy a statistically significant rise in interest - namely mountain areas such as the Utah mountain resorts, Lake Tahoe (Calif. and Nev.), Gatlinburg (Tenn.), and Pocono Mountains (Pa.). Coastal spots like the Mississippi and Florida Gulf coasts, Atlantic City (N.J.), the Outer Banks (N.C.) and South Carolina shoreline also showed rising tourism interest.

According to MMGY/Global Harrison Group, other destinations with rising popularity are those that offer unique visitor experiences such as historic Colonial Williamsburg (Va.) and St. Augustine (Fla.), wine-focused Napa Valley and Sonoma Valley (Calif.) and glitzy hotspot Las Vegas (Nev.).

International destinations with rising interest in visitation include Africa, the Middle East and Oceania (Australia, New Zealand and Pacific Islands, etc.). However, fewer U.S. travelers are interested in international trips overall, dropping to nine percent of all leisure travelers today compared with 11 percent last year.

Like Germany, Home Prices Also Rising in Austria

Austrians, wary of the Eurozone financial crisis, are placing their bets and their money these days in residential real estate. Like neighboring Germany, prices are rising in Austria, especially in the fabled city of Vienna.

Select Property, an international residential broker based in London, notes the outskirts of Vienna have shown an increased demand for property which is driving up the prices.

"People know that they can get a larger property with more living space for the same amount of money that you would pay for something much smaller in the city," according to the brokerage.

This has made for some dramatic increases in prices with apartments in Wiener Neustadt rising by 25 percent year-on-year and houses in Korneuburg increasing by an average of 17 percent.

The Mariahilf district in Vienna saw the average price per square meter rise to €4100 a rise of 16 percent.

Buy-to-rent property investors will also benefit from the slight increase in rental prices, which rose by 1.6 percent for the first six months of the year on an annual basis, the brokerage says.

Other areas which saw real estate price increases were Penzing where prices rose by 35 percent against 2011 and the suburban areas saw rises between 10 and 30 percent.

Select Property's Alexander Ertler said: "The fear over losing money through inflation and mistrust in the financial markets is encouraging increasing numbers of Austrians to invest and try and find security in the property market."

Financing, Eurozone Troubles Slow Real Estate Investments in Romania

Bucharest, Romania

Commercial real estate transactions in Romania are almost nowhere to be seen. CB Richard Ellis reports two first-half deals were valued at EUR 55 million ($70.3 million U.S.) That valuation was the lowest in Romania in the past six years.

The two transactions were the sale of the Nokia plant in Cluj to household producer De†Longhi, and theTimisoara-based City Business Center compound, acquired by the South African-registered investment fund NEPI.

Romania still remains an attractive market in terms of real estate transactions but the lack of financing and the Euro zone turmoil "have raised the investment risk and quelled investment appetite," reports The Diplomat Media Group in Bucharest .

In the Central and Eastern Europe (CEE) region, Russia and Poland registered the highest investment volume.

Office segment yields in Romania stabilized to 8 percent, while retail notched up 8.75 percent for commercial centers and 10.25 percent for storehouses, according to CBRE.

By comparison, in Warsaw, prime yields in office are at 6.25 percent, while on the industrial segment the figure is 7 percent. Retail in the Polish capital has an estimated prime yield of 6 percent. Similar values are registered in Prague and Budapest.

In the first half of 2012, Russia posted over EUR 900 million of transactions and Poland over EUR 800 million. The Czech Republic, in comparison, saw a transaction volume of EUR 180 million at six months. (1 euro = $1.2785 U.S.)

Residentual-Home-Construction.jpg Homebuilders across the U.S. are happy today, and for good reason. According to newly released stats from HUD and the U.S. Census Bureau, sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 389,000 units in September. This is the fastest sales pace recorded since April of 2010. "Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, today's data provides further confirmation that a gradual but steady housing recovery is underway across much of the nation," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under today's exceedingly stringent guidelines."

Homebuilders across the U.S. are happy today, and for good reason.

According to newly released stats from HUD and the U.S. Census Bureau, sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 389,000 units in September. This is the fastest sales pace recorded since April of 2010.

"Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, today's data provides further confirmation that a gradual but steady housing recovery is underway across much of the nation," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under today's exceedingly stringent guidelines."

U.S. Home Sales Slow in September, Yet Enjoy Biggest Median Price Increase Since 2005

According to the National Association of Realtors (NAR), September existing-home sales declined modestly, but inventory continued to tighten and the national median home price recorded its seventh back-to-back monthly increase from a year earlier.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August, but are 11.0 percent above the 4.28 million-unit pace in September 2011.

Wyndham to Open First Hotel in Bahrain

Wyndham Grand Manama, Bahrain

Bahrain is getting its first Wyndham Hotel. The new five-star Wyndham Grand Collection hotel will be part of a 50-story mixed used architectural landmark in Bahrain Bay.

Bahrain Bay Development B.S.C. is a $2.5 billion waterfront district designed around vibrant neighborhoods of residential, commercial and retail spaces.

Set in this unique new development, the Wyndham Grand Manama will face the World Trade Centre, just a short distance from Bahrain Financial Harbour, making it well placed to cater to business as well as leisure travelers.

Wyndham Hotel Group recently confirmed plans for the first Wyndham Grand property in Bahrain following the signing of an agreement with Cooperation Investment House SPC to manage its prestigious  hotel  property.

Currently under development in the city of Manama, the Wyndham Grand Manama is expected to open by the end of next year with more than 260 spacious guest rooms ranging from 46 to 120 square meters (approximately 495 to 1,290 square feet). Covering 14 floors of a 50-story mixed use development, it will also comprise 500 square meters (nearly 5,400 square feet) of meeting space and a 900-square-meter ballroom (equivalent to nearly 9,700 square feet) on the building's top floor, offering stunning sea views.

Complemented by indoor and outdoor infinity swimming pools and separate health clubs for men and women, the development will also include five food and beverage outlets catering to a variety of tastes.

Upon opening, the hotel will join the Wyndham Grand Collection, an ensemble of distinguished hotels within the upscale Wyndham Hotels and Resorts brand. Wyndham Hotel Group, the world's largest hotel company with over 7,170 hotels, is part of Wyndham Worldwide Corporation (NYSE: WYN).

 "This is an incredibly dynamic and exciting development," said Bani Haddad, regional vice president Middle East & Africa, Wyndham Hotel Group. "Each Wyndham Grand hotel takes in some of the flavor of its destination and this modern, cosmopolitan setting will be reflected in the hotel along with historical Bahraini influences. It is a fantastic setting and a great property for this distinguished collection."

The Wyndham Grand Manama will face the World Trade Centre, just a short distance from Bahrain Financial Harbour, making it well placed to cater to business as well as leisure travelers.

"We are delighted and honored to work with Wyndham Hotel Group on the first Wyndham Grand hotel in Bahrain," said Ahmed AlQaed, managing director, Cooperation Investment House SPC. "By combining the Wyndham brand's authentic hospitality and high-quality service with modern corporate office spaces in one magnificent development at this prime location, we believe we are creating the best tourist and business destination this area will offer."

This will only be the third Wyndham Grand in Europe and the Middle East. The other two properties are the Wyndham Grand Regency Doha in Qatar and Wyndham Grand London Chelsea Harbour in the U.K.

Coeur D'Alene, a Paradise in the Panhandle

The Coeur D'Alene Resort sits at the foot of the lake. (Photo courtesy Coeur D'Alene Chamber of Commerce)

Coeur D'Alene is special. And you can see it the moment you turn off Highway 90 from Spokane.

To your left lies a little town with cobbled sidewalks and gas-lit streetlamps and green awnings and red-brick storefronts, behind which lie attractive little shops, eateries, and galleries. In front of you, shooting up into a clear azure sky, lies Coeur D'Alene Resort, one of the Northwest's premier resorts. And to your right lies an ice-blue alpine lake, from which rise 7,000 foot- mountains covered in deep-green forest.

Tucked up in the Idaho Panhandle, about 90 miles south of Canada, Coeur D'Alene is one of the prettiest towns in the Northwest. And the lake upon which it sits - Lake Coeur D'Alene - has 125 miles of shoreline.

Coeur D'Alene means "Heart of the Awl," a reference by early French traders to the earrings worn by the native Salishan people. And the Heart of the Awl is situated amidst a setting that no doubt took these French traders' breath away.

More than 125 miles of bays and inlets...(Photo courtesy Coeur D'Alene Chamber of Commerce)

On a sunset cruise with Lake Coeur D'Alene Cruises, you'll explore quiet bays and lagoons, some with magnificent, Western mansions several stories high. And you'll see the sun go down - not until after ten in summer - behind mountain ridges that it sprinkles with reds and purples and oranges and pinks.

At the foot of downtown is Tubbs Hill, a mini-mountain jutting out into the lake, which seems to offer stunning views around every turn. People come here to hike, rock-climb, picnic on one of the ledges overlooking the lake, row, sail, canoe, or kayak. And speaking of kayaking, if you take one out, you'll see bald eagles and ospreys flying overhead. And you'll explore isolated little coves where the only sound is that of your oars.

There are some cool surprises in this small town. . For example, Northern Idaho is not a place you'd associate with great olive oil - which makes a visit to Coeur D'Alene Olive Oil Company all the more interesting. And Coeur D'Alene Cellars produces distinctive syrahs, cabernet sauvignons, and chardonnays, all of which you can sample at their Barrel Room #6, an atmospheric wine bar that also serves local micro-brews.

About a half-hour outside of town is one of the most unusual mountain-biking experiences in the world. Situated in the Bitterroot Mountains at the Idaho-Montana border, at the Lookout Pass Ski Area, "The Route of the Hiawatha" is a long-abandoned railroad track (named after the "Hiawatha," which ran from the Northwest to Milwaukee) through a series of tunnels and 1,000-foot high wooden trestles. The longest of the ten tunnels is almost two miles long...and you can't see more than a foot or two in front of you! (In fact, you have to be looking very carefully even to see the Idaho/Montana marker on the border.) When you're out of the tunnels, and riding on the old wooden trestles, you'll see spectacular views deep into Montana.

The Route of the Hiawatha (Photo courtesy Coeur D'Alene Chamber of Commerce)

After your adventure, you can relax back in your room at the Coeur D'Alene Resort...which probably has a breathtaking view of the lake. Newly-renovated, the resort has luxurious guestrooms, three good restaurants and an elegant bar, and, believe it or not, a float-plane service operating from its dock (as well as the aforementioned Lake Coeur D'Alene Cruises). The Coeur D'Alene Resort also boasts a golf course (accessible by mahogany boat) with the only movable floating green in the world.

When you look out your window at the resort, you'll know why the owners of those Western mansions built homes here.

Mortgage Application Volumes Dip in U.S.

According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 12, mortgage applications decreased 4.2 percent from one week earlier. This week's results include an adjustment to account for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14 percent compared with the previous week.

The Refinance Index decreased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier.

This is the highest Purchase Index observed in the survey since early June 2012. The unadjusted Purchase Index decreased 9 percent compared with the previous week and was 12 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 82 percent of total applications from 83 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained constant at 4 percent of total applications. The HARP share of refinance applications increased to 22 percent from 18 percent the prior week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.57 percent from 3.56 percent, with points increasing to 0.44 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.81 percent from 3.74 percent, with points increasing to 0.42 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained constant at 3.34 percent, with points increasing to 0.82 from 0.71 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.87 percent from 2.88 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent LTV loans. The 15-year contract rate has decreased for eight consecutive weeks and is a new record low in the survey. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.59 percent from 2.60 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTV loans. The contract rate matched the lowest rate in the series. The effective rate decreased from last week

Washington D.C. Office Market Affected by Political Uncertainty, Yet Still Relatively Strong

The Washington, D.C. metro area continues its economic expansion, but at a slower pace than in prior expansion periods, according to a third quarter 2012 office market/economic report put out by Delta Associates and Transwestern. This slower growth is due partially to the uncertainty associated with possible sequestration and the end of Bush Era-tax cuts, tentatively scheduled for January, 2013, according to the report. 

In spite of fears about possible sequestration and the ending of tax cuts, there is continuing growth in the Washington metro, because of the strength of the regional economy, according to the Delta Associates/Transwestern report. Among those strengths are a highly-educated workforce, economic diversity (compared to the 1970s when there was more dependence on the federal government), growing technology and healthcare  industries, a strong housing market with sustained values and a plethora of corporate  and association headquarters, many of which have moved into the area in the past five years, says Elizabeth Norton, senior vice president and Mid-Atlantic research director at Delta Associates.

Regardless of these strengths, however, the Washington, D.C. area saw a payroll employment increase of only 24,300 in the 12 months ending July 31st, compared to a long-term annual average of 39,800. These statistics contrast with job growth during a typical expansionary period of 60,000 to 80,000, making this past year's job growth look anemic by comparison. Still, the unemployment rate for the Washington metro was 5.6% in July 2012, down from 6.0% the year before. This compares to the national rate of 8.3% in July 2012. The national rate went down to 8.1% in August 2012.

The Washington metro area office market had negative net absorption and a rising vacancy rate during the first three quarters of 2012, because demand was not enough to offset tenants vacating space, according to the Delta/Transwestern report. This was the result of several factors, including Base Realignment and Closure ( BRAC) Commission-related tenants moving out of privately-owned office space into government-owned space in addition to the fears about sequestration. Plus, many other kinds of tenants are consolidating and/or downsizing their operations.

"We expect the share of government leasing to remain limited for the foreseeable future, as Congress scrutinizes any large lease deals and agencies are forced to do more with less," although private sector leasing should gradually start to rise, according to the Delta Associates/Transwestern report. But significant growth in demand will not be felt until 2014 or 2015, when there will be more need for Class A space, says Norton.

Meanwhile, some General Services Administration (GSA) tenants are relocating to military bases, a trend that will be "continuous for the next handful of years," says Norton. Military bases are owned, rather than leased, which saves money for the government.

Johannesburg Fund Raises $250 Million for Mixed-Use Projects in Nigeria‚ Ghana and Angola

In an unprecedented move, Johannesburg-based RMB Westport, South Africa's second-largest financial-services company, announced the property unit of its investment banking arm has raised $250 million to develop real estate in West Africa.

The initial sites will be in Nigeria, Ghana and  Angola. Retail and mixed-use development will be the primary objective. Africa currently has strong demand for high-grade retail and commercial properties, according to Independent Online, a division of Independent Newspapers (Pty) Ltd. based in Cape Town, South Africa.

RMB Westport opened its doors in 2008 when Rand Merchant Bank (RMB)‚ through its Real Estate Investment Banking division entered into a joint venture with the Westport Property Group.

In an e-mailed company statement to the media, Michael O'Malley‚ Director of RMB Westport, said his company "believes in the African growth story. Over the past decade‚ African economic output has more than tripled‚ which is one of the many reasons we think that Africa today holds the greatest overall investment potential for all frontier markets globally."

O'Malley says the discovery of oil in Ghana will probably lead to a further increase in investor interest and subsequent demand for office and industrial space in West Africa. O'Malley has spent the past 20 years working on retail and mixed-use projects in 12 African countries.

RMB Westport is no newcomer to Africa. Some of RMB Westport's biggest projects, at various levels of completion, include Icon House and Accra Financial Centre (A-grade buildings in Ghana); Ikeja City Mall (the largest shopping mall in Nigeria); Osapa Retail (Phase I) and Project Wings (Office and retail property in Nigeria) and recently the Junction Shopping Center (retail property in Accra‚ Ghana).

Westport chief financial officer Alan Wilson states,  "Africa currently has the world's highest rate of urbanization. This migration‚ along with Africa's growing middle-class further reinforces the need for high grade office space and retail buildings in urban areas."

For example, Wilson says "the city of Luanda was built for a population of 300,000 and currently has over six million inhabitants."

Wilson says the International Monetary Fund (IMF) recently forecast Nigeria's economy to grow by 6.9% - a rate which‚ if sustained‚ will eventually lead to Nigeria overtaking South Africa as the largest economy in Africa.

Boston's Commercial Market Benefiting from High-Tech Activity, Financial and Legal Services Lagging

Downtown Boston

According to a third-quarter report by Jones Lang LaSalle on the US office market, there was a slight improvement in this sector, compared to the second quarter, but expectations for future growth have had to be "reset," because of concerns about the global and US economies. 

"The recovery has been limited to a handful of (geographic locations) dominated by energy and technology demand, mainly in Texas, Northern California and the Pacific Northwest," says Jones Lang LaSalle's New England Research Manager, Lori Mabardi. "But Boston appears to be bucking the East Coast trend of stalled momentum," by performing like a West Coast market, in that it is driven by high-tech and life sciences firms, she says.

The Boston metro had an asking rent growth of 1.4% in the third quarter and a drop in vacancy of 30 basis points. "But our market is contending with dual forces," says Mabardi. On the one hand, large firms are shrinking their space and becoming more efficient, while high tech and life science firms, as well as many start-ups, are growing and expanding their physical footprint.

Traditionally, Boston was dominated by financial and legal services, sectors which haven't turned the corner yet, says Mabardi. "Once we do, the fundamentals can improve dramatically," she says.

Boston has recovered 80% of the jobs lost in the recession, but not the same jobs, says Mabardi. "We're still above historical averages in terms of vacancies," she says. "There is little new office supply in Boston and what there is, is mostly build-to-suits, but as companies downsize, (leaving more space on the market)" there is an additional supply of office space, as if there had been new space built, says Mabardi.

In the third quarter, Class B office space was the bright spot in Boston, according to the Jones Lang LaSalle report. This segment had a 3.1% growth in asking rents, compared to a .4% asking rent growth for Class A space in the third quarter, both compared to the second quarter of 2012. "This is likely due to the organic growth, as opposed to M&A activity, in the high-tech and life sciences sectors in Cambridge and the Seaport district, in addition to continued spillover demand into the city's financial district and northern suburbs," says Mabardi.

New York City Still 'Top Dog' of Global Property Investment Marketplace; London and Tokyo Ranked Second and Third

According to Cushman & Wakefield's annual Winning in Growth Cities report launched today at EXPO REAL trade fair in Munich, low global interest rates and ongoing risk are luring investors towards commercial property markets in core global cities, with New York attracting the most investment during the last year.

The top 25 global cities have in fact strengthened their lead in the past year - increasing their market share to 56% from 46% in 2009. However while this dominant group will continue to be favoured by investors for their risk averse characteristics, they will in the future face increasing competition from a host of other cities according to the report.

Cushman & Wakefield's report highlights include:

• New York is the largest global investment market for second consecutive year - with volumes rising 18.9% to US$34.7 bn in the year to Q2 2012

• London took second place with 3.8% growth in investment volumes to US$ 29.3 bn (18% less than New York)

• Tokyo, Paris, Los Angeles and Hong Kong round out the top 6.  Los Angeles took top spot for investment in industrial, Shanghai for development sites and Hong Kong for retail.

Manhattan Residential Sales Slow 5% in Q3 as Listing Inventory at Seven Year Lows

According to Prudential Douglas Elliman's latest Manhattan Market Overview 3Q 2012, the Manhattan housing market showed seasonally stable pricing and sales activity. Smaller apartments continued to gain market share as mortgage rates continued to fall and city employment levels rose.

The sharply declining listing inventory reached a 7.5-year low, while the monthly absorption rate demonstrated a brisk market pace as it reached a 5-year low. All price indicators posted modest year-over-year declines, as 1-bedroom apartments gained 5% market share to represent 37.8% of all sales, edging out the 2-bedroom market as the largest market segment.

Co-Op and Condo Market Highlights:

• Quarterly pending sales rose as year-to-date closed sales lagged-- The pending sales index was 4.9% above year ago levels as summer contract signings were unusually heavy. Year-to-date closed sales lagged behind prior year totals by 2.9%, as 2011 saw more activity in the first half of the year.

• Listing inventory continued to decline sharply, reaching lowest level in 7.5 years-- There were 5,847 listings at the end of the quarter, 24.3% fewer than 7,726 total in the prior year quarter, marking the metric's lowest level since the first quarter of 2005. The monthly absorption rate fell to 5.9 months, the fastest market pace in five years.

• Prices showed stability. Indicators slipped as market share for 1-bedrooms jumped-- Median sales price slipped 2.3% to $890,000 from $911,333 in the prior year quarter. Market share of 1-bedroom sales jumped 5% to 37.8% over the same period.

The median sales price was $890,000, down 2.3% from $911,333 a year ago. Average sales price and average price per square foot slipped 1.4% and 2.4% from the prior year quarter to $1,444,463 and $1,103 respectively. Year-to-date, median sales price remained unchanged from a year ago at $850,000, while average price per square foot increased 0.6%, further reflecting price stability in the overall market.

There were 2,952 sales this quarter, the second highest total since the credit crunch began four years ago, second only to the prior year quarter total of 3,106. Sales in the first half of 2012 fell just short of sales in the first half of 2011. While there was a 5% decline in third quarter sales from a year ago, signed contracts increased 4.9%.

After a relatively slow summer in 2011, sales activity remained unusually high over the 2012 summer months, suggesting a possible stronger finish to the year. Average monthly maintenance was $1.62 per square foot per month, up 6.6% from $1.52 in the same period last year. Despite listing inventory continuing to drop, declining 24.3% to 5,847, its lowest level since the first quarter of 2005, only 8.5% of all sales sold for more than their list price at time of contract, down from 10.1% in the prior year quarter. As inventory fell, older listings were absorbed, resulting in a jump in days on market from 119 in the prior year quarter to 191. Listing discount increased from 4.4% to 7.2% over the same period.



The Co-Op Market

• Price indicators were mixed as both entry-level and high-end sales rose-- The combined studio and 1-bedroom market share was 55.2%, up from 53.7% in the prior year quarter. The 3- and 4-bedroom market share jumped from 8.4% to 15.3% over the same period.

• Most co-op sales in five years-- There were 1,728 sales in the third quarter, 31.2% more than in the year ago quarter, and the highest number since 2007.

• Listing inventory fell sharply-- There were 3,136 listings at the end of the third quarter, 25.1% below year ago levels, resulting in a 5.4 month absorption rate, the fastest market pace in five years.

The median sales price edged 0.7% lower to $700,000 from $705,000 largely due to the drop in market share of 2-bedroom apartments. Typically the largest category, this segment fell to a 29.4% market share from 37.9% in the same period last year. Average sales price for the third quarter edged 0.8% higher to $1,216,364 from $1,206,770 in the same period last year. Average price per square foot slipped 2.2% to $969 from $991 in the prior year quarter. There were 1,728 sales in the third quarter, 31.2% more than 1,317 in the same period last year. Listing inventory fell 25.1% from 4,187 to 3,136 over the same period. Co-ops accounted for 58.5% of all apartment sales and 53.6% of all active apartment listings. The combination of rising sales and falling inventory resulted in a 5.4 month absorption rate, the fastest market pace in 5 years. Days on market continued to rise, reaching 191 days from 103 days in the prior year quarter, this high level of marketing time indicating that the market sold off older inventory as new listings failed to keep up with the pace of sales. The listing discount jumped to 7.7% from 2.6% in the year ago quarter. The monthly maintenance charge for all sales increased 3.8% from $1.59 per square foot per month in the prior year quarter to $1.65.

 

London's AXA Investment Group Raises $1.8 Billion; Aims for $2 Billion

With European investors hungry for fresh investment capital, London-based AXA Real Estate Investment Managers announced it has raised $1.8 billion (1.4 billion euros) to loan projects in The Netherlands, Sweden, Norway, Finland and Switzerland. The new funds raises AXA's lending chest to 7 billion euros for the year to date.  One euro equals $1.30 U.S.

AXA says it expects to raise another two billion euros by the end of this year. The new tranche of fund-raising follows 1.3 billion euros in investments made by AXA Real Estate for the first half of 2012.  AXA Real Estate Investment Managers is a subsidiary of AXA Investment Managers (AIM)

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Amazon Buys Its 11-Building Seattle Headquarters Campus for $1.16 Billion

Signaling that near-future growth is on the way, Seattle, WA-based Amazon.com, founded by entrepreneur Jeff Bezos, has contracted to purchase its 11-building, 1.8-million-square-foot South Lake Union headquarters campus from Vulcan Real Estate for $1.16 billion.

The deal is expected to close before the end of the year. Seattle real estate sources call it the biggest commercial real estate deal in Seattle's history. The sales price of the four-year-old property equates to $644 per square foot.

Vulcan Real Estate was founded by Microsoft co-founder Paul Allen. He began building the complex in 2008 after Amazon signed long-term leases that expire in the 2020s. Allen is selling the property to rebalance its investment portfolio and free up capital for more development in  the booming South Lake Union neighborhood of Seattle, according to published media reports.

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California Healthcare Investment Partners' Portfolio Hits $1 Billion

Newport Beach, CA-based American Healthcare Investors and Griffin Capital Corp. announced their $108.5 million acquisition of three Los Angeles-area hospitals and three medical office buildings in Frisco, TX and Jasper, GA. The purchase brings the partners' portfolio value to $1.1 billion on 121 buildings in 26 states.

"Reaching the $1 billion mark in aggregate portfolio value, based on purchase price, is a key milestone for Griffin-American Healthcare REIT II," said Danny Prosky, a principal of American-Healthcare Investors and president and chief operating officer of the REIT.

He added, "Size and scale can be very important in terms of real estate portfolio operations, efficiency and potential enhanced value of the REIT as a whole. The REIT has now grown to the size where it is one of the largest and most significant owners of healthcare-related real estate in the country."