THE BUCK STOPS HERE

Projected 2002 Total Retail Sales

Consumer spending has helped offset a dearth of business investment by Corporate America in 2002. Of the 35 markets tracked by Marcus & Millichap's National Retail Index, Los Angeles is expected to top the charts with $99.6 billion in sales, with Chicago in second at $94.7 billion.

Source: economy.com/ Marcus & Millichap

MIDSCALE HOTELS LEAD THE WAY

Although there are more economy hotels than any other hotel type, they aren't the most popular hotels among developers. That distinction goes to midscale hotels without food and beverage service — 213 of the hotels are under construction as of August 2002, compared with 79 economy hotels.

Construction Pipeline
Hotel Type Existing Supply Recently Opened* Under Construction
Upper Upscale 1,674 36 68
Upscale 2,038 146 159
Midscale with restaurant 4,791 74 40
Midscale without restaurant 6,427 313 213
Economy 9,940 156 79
Unaffiliated 17,820 77 148
Source: Smith Travel Research, PPR, FW Dodge
* Hotels opened within the past 12 months


HOLDING STEADY

Thanks in part to extremely low interest rates, cap rates for multifamily properties are relatively stable. Apartments also have received an inordinate amount of acquisition attention because it's difficult to close deals in office, non-anchored retail and hotel properties due to current market conditions, says Jeanette Rice, principal of Lend Lease Mortgage Capital.

Source: National Real Estate Index/Lend Lease Mortgage Capital

insight from: demographics

JOB GROWTH IN THE U.S. 1995-2001

Markets with strong job growth also tend to boast impressive levels of real estate development. Las Vegas and other Sun Belt cities lead the pack with the highest percentage increases in employment growth from 1995 to 2001, while Rust Belt cities like Flint, Mich., experienced the largest declines.

Most Job Growth Metro Area Employment* 1995 Employment* 2001 % Change
Las Vegas, Nev. 544.5 779 43.07%
Sarasota, Fla. 210.1 281.9 34.17%
Riverside-San Bernadino, Calif. 779.9 1,029.1 31.95%
McAllen-Edinburg-Mission, Texas 123.4 162.1 31.36%
Austin, Texas 516.6 675.6 30.78%
Least Job Growth Metro area Employment* 1995 Employment* 2001 % Change
Steubenville-Weirton, Ohio 50.5 49.7 -1.58%
Terre Haute, Ind. 70.1 67.8 -3.28%
Kokomo, Ind. 52.1 50.3 -3.45%
Muncie, Ind. 61.5 58 -5.69%
Flint, Mich. 180.8 165.7 -8.35%
*Employment in thousands
Note: Employment numbers are for non-farm employees
Source: American Demographics analysis of Bureau of Labor Statistics data


SECURITIZATION KINGPINS

Wachovia securitized $1.6 billion of mortgages from January through June and captured the top spot as the most active securitization program for the first half of the year, according to a survey conducted by Commercial Mortgage Alert. The Charlotte, N.C.-based lender edged out Credit Suisse First Boston ($1.44 billion), Deutsche Bank ($1.40 billion) and Lehman Brothers ($1.38 billion). Competition and the timing of deals are among the reasons for fluctuations year over year. Wachovia Corp. and First Union Corp. merged on Sept. 1, 2001.

Top 10 Loan Contributors to CMBS deals*
Contributor First-half 2002 ($millions) First-half 2001 ($millions) '01-'02 %Change
1. Wachovia Securities $1,605.9 $1,664.2 -3.5
2. Credit Suisse First Boston $1,442.1 $3,131.4 -53.9
3. Deutsche Bank $1,397.9 $1,932.7 -27.7
4. Lehman Brothers $1,383.1 $924.4 49.6
5. GMAC Commercial Mortgage $1,292.5 $1,638 -21.1
6. Morgan Stanley $1,273.6 $1,368.3 -6.9
7. JP Morgan Chase $1,239.5 $2,074.5 -40.3
8. Banc of America $1,154.8 $1,970.4 -41.4
9. UBS Warburg $1,144 $641.6 78.3
10. Bear Stearns $902.2 $518.8 73.9
*Totals reflect the volume of activity from January-June 2002 and are based on the amount of collateral supplied to securitizations backed by originated mortgages.
Source: Commercial Mortgage Alert, Lend Lease Real Estate Investments