Bank profits are up, while loan volume has been falling.
Realtor Magazine, July 2011 | By Lawrence Yun
You already know from real-world experience that banks are not lending. But now your experience is backed by hard data from the FDIC. The agency found that in the year ending March 2011, bank deposits rose by $300 billion, assets grew by $80 billion, and profits were up by $12 billion. Yet loan volumes fell $260 billion to $7.24 trillion.
The banking industry’s old “3-6-3 rule” says that bankers pay 3 percent interest to depositors, make loans to depositors at 6 percent, and be out on the golf course by 3 p.m. That rule now seems to be replaced with a new 0-0-3 rule: Offer nothing to depositors and nothing to those who want to borrow, and earn 3 percent by buying tradable assets like government bonds.
Reprinted from Realtor Magazine, July 2011 Issue
Washington, DC, May 24, 2011
The improving economy and job creation mean growing demand for commercial real estate, according to the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said job creation will be the biggest factor moving forward. “Job growth creates demand for commercial space, and the economy should be adding between 1.5 million and 2 million jobs annually both this year and in 2012, with the unemployment rate falling to 8.0 percent by the end of next year,” he said. “Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down in the commercial real estate sectors. Individual markets are now stabilizing and in some cases rising.”
From the second quarter of this year to the second quarter of 2012, NAR forecasts vacancy rates to decline 1.0 percentage point in the office sector, 0.9 point in industrial real estate, 0.5 point in the retail sector and 1.1 percentage points in the multifamily rental market.
The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 360 local market experts,1 shows a firming up of market fundamentals.
Warehouse Demand: Strong Signs of Life
One reason investors like warehouses is that the demand principles are simple. If a company makes something or imports something, it has to put that something somewhere until it reaches the end user. That equals demand.
International trade accounts for approximately 35 percent of industrial space demand, says Rene Circ, national director of industrial research for Grubb & Ellis. So it’s not surprising that with a 14.3 percent jump in imports during 2010, according to Mario Moreno, economist with The Journal of Commerce, the overall national industrial vacancy rate fell to 10.2 percent at the end of first quarter of this year, down from 10.3 percent at the end of 2010, according to Cushman & Wakefield. This rate compares favorably to the 10.8 percent of the industrial property vacancy in the first quarter of 2010. Full article here….