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.
| 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 ($1.38 billion). Competition and the timing of deals are among the reasons for fluctuations year over year. Wachovia Corp. and First Union Corp. merged on Sept. 1, 2001.
| Contributor | First-half 2002 ($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 | ||||