Market Watch February 2012

Marcus & Millichap, Real Estate Investment Services

Jeff Mueller

Senior Associate

303.328.2049

303.328.2010 Fax

Jeff.Mueller@marchusmillichap.com

https://www.marcusmillichap.com/

Marketwatch February 2012

COLORADO 

Pueblo, Fort Collins lead economic comeback in Colorado

Pueblo and Fort Collins — which suffered lighter job losses in the downturn than much of the rest of the state — are expected to be the first metro areas in Colorado to recover their lost jobs. But it could take another three years before Denver and Colorado Springs do so, and Grand Junction may not regain peak employment until after 2017, according to a study released Wednesday by the U.S. Conference of Mayors.

Denver-area apartment vacancies hit 12- year low for Q4

The apartment vacancy rate in metro Denver was 5.4 percent in the fourth quarter of 2011, the lowest year-end rate in 12 years, according to a report Thursday by the Apartment Association of Metro Denver and the Colorado Division of Housing. The Q4 rate -- the lowest for the quarter since 2000 -- was up from the third quarter’s 4.9 percent vacancy percentage, but vacancy rates tend to rise in the fourth quarter from earlier in the year, said Ryan McMaken, division spokesman and economist

Metro Denver unemployment rate 8.1% in December, raw numbers show

Denver metro area unemployment stood at 8.1 percent in December 2011, down from the 8.9 percent rate in the same month of 2010, according to raw, unadjusted county jobs data released Tuesday by the Colorado Department of Labor and Employment . The 8.1 percent rate is for a 10-county area that includes Aurora, Lakewood, Broomfield and Centennial but not Boulder County.

Denver builders buck national trend 

As national headlines screamed that 2011 was the worst year on record for the sale of new homes, Denver bucked that trend, shows a report released today. 

“Denver is de-coupling itself from the national market and is moving to the forefront in the recovery cycle,” said Jeff Whiton, President and CEO of the HBA of Metro Denver. “W e are encouraged.” 

NATIONAL 

Sam Zell Talks Politics, Debt, International Markets and How He's Investing Today 

He says what he thinks, doesn’t allow emotion to seep into his deals and has not shied away from controversy. 

He’s not in business to make friends. He’s in it to make money. And it doesn’t matter what you think about how he does it. He is famously known as the “grave dancer” for profiting off distressed real estate in the past. And he never backed away from that moniker, once writing in an article, “I was dancing on the skeletons of other people’s mistakes.”

As Five-Year Debt Comes Due, CMBS Sector Faces New Challenges 

For much of the past few years, the CMBS delinquency rate has climbed to vertiginous heights, breaking all futility records in the process.

After bottoming at 0.28 percent in June 2007, according to Morningstar, the CMBS delinquency rate began to rise soon after commercial real estate values and vacancy rates fell. The rate peaked at 8.43 percent in July 2011 and as of the end of November had retreated mildly to 8.19 percent. Loans originated with aggressive underwriting assumptions about future occupancies, rents and values turned sour quickly. And even though quite a few troubled loans were “extended and pretended,” that practice didn’t prevent many loans from going bad.

Oil and Gas Boom Lifts U.S. Economy 

NAMPA, Idaho—The staccato of nail guns echoes across a cavernous building here as workers piece together manufactured houses with easy-to-clean linoleum floors and rugged interiors for muddy oil-field workers. There is no oil and gas production in Idaho, but that doesn't mean the U.S. energy boom has bypassed this bedroom community west of Boise. Fleetwood Homes of Idaho, a subsidiary of Cavco Industries Inc., has increased production by 25% since last fall at its Nampa factory, hiring 40 workers and adding hours for employees. It is building the extra-insulated "Dakota" model for shipment 1,000 miles east to the Bakken oil field in North Dakota.

Moody's: CMBS delinquency rate higher than 9% through 2011 

The delinquency rate of loans in commercial mortgage-backed securities bounced higher in December and remained above 9% all year. Delinquency rates were mixed across the five commercial property types in December with hotel and multifamily rates declining while office, retail and industrial rose. 

Obama budget: Tax plans aim at rich 

NEW YORK (CNNMoney) -- Raise taxes on those making more than $250,000. Limit deductions for the wealthy. Make an expanded college tax credit permanent. Sound familiar? 

When it comes to taxes, President Obama's 2013 budget proposal released Monday includes a host of repeat performances. In fact, many of the proposals he makes have appeared in every budget Obama has put out since taking office.

Bernanke: Housing problems hold back recovery 

NEW YORK (CNNMoney) -- Lingering problems in the housing market continue to restrain America's economic recovery and limit the effectiveness of Federal Reserve policies, Ben Bernanke said Friday. "The economic recovery has been disappointing in part because U.S. housing markets remain out of balance," the Fed chairman said in prepared remarks at the International Builders' Show in Orlando, Fla.