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Category

Economic and Market Commentary

Global Business and Consumer Sentiment Data Update

Business sentiment weakened across the board in the most recent round of releases. The S&P Global Flash Purchasing Managers’ Index (PMI) was flat to down in the United States, Eurozone, France, Germany, United Kingdom, and Australia. The June survey data reflects worsening conditions versus the prior month. Source: Macrobond. In the U.S., the composite index...
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More Income in Fixed Income

The bond market in 2022 has been turbulent and the negative total returns have been some of the worst experienced by fixed income investors.  As a result, a substantial amount of pessimism has been created for the asset class so far this year.  However, a reason for optimism has also been created for fixed income...
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Over the past two decades, as companies continue to seek talent and cities look to grow, they have partnered with universities in their local area to form innovation hubs creating unique opportunities for R&D, specialized talent, and economic growth.

Given the growth of Silicon Valley since the turn of the 21st century, other cities have sought to replicate their model to produce lasting research, create local jobs, and grow their economic base.  Some of the early adopters have been the Cortex district in St. Louis, MO with Washington University, St. Louis University, and University...
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Rising Commercial Mortgage Rates and the Impact on the Multifamily Sector.

As inflation pressures continue to push interest rates higher, the multifamily sector of commercial real estate will likely face pressure as cap rates in the sector drop to historic lows.  Real Capital Analytics reports that U.S. commercial mortgages originated in 2021 had an average coupon rate of 3.7% for 7/10-year fixed rate product, and as...
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A Look at where Tenants are Migrating in Several Key Markets Across the Country

The Washington, D.C. market has seen over 2 million square feet of tenant migration out of the core CBD and East End submarkets over the past several years.  Most of the migration is driven by the Federal Government who has taken advantage of the aggressive terms offered by Landlords with lower land basis in outer...
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The Recent Rise in Interest Rates Provides Fixed Income Investors an Opportunity for a Brighter Future

With the first quarter over, many bond investors have been left scratching their heads and wondering – what just happened?  For a class of investors who are not accustomed to losing money, they were quickly reminded how bond math works – as interest rates rise, the value of bonds fall.  To some investors, a glance...
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We believe leasing activity will increase as businesses begin to emerge from the pandemic and look toward future office space needs.

With COVID variants such as Delta and Omicron seemingly slowing down and back to office plans being put in effect, companies have begun to shift their focus on office space needs into 2022 and beyond. The U.S. office market registered its first quarter of positive net absorption in Q4 2021 since the onset of the...
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We believe the Russia-Ukraine conflict will have limited impact on U.S. commercial real estate.

Russia’s invasion of Ukraine in late February and the ongoing conflict will have ramifications for both the United States’ and global economies.  However, we believe it is not likely to have a major negative impact on the U.S. commercial real estate market despite damaging economic sanctions placed on Russia as the U.S. economy is not...
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Commercial Real Estate Pricing during past Fed Tightening Cycles.

The year has been undoubtedly a watermark for the commercial real estate market in terms of record sales. Given the Fed’s likely decision to begin tapering of asset purchases in reaction to accelerating inflation above their two percent target, we will likely see the end of the accommodative monetary policy brought on by the Covid...
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With Monetary Policy Set to Tighten, Investors Question How Fast and How Far the Fed Will Need to Tighten.

Despite being two years into the pandemic, the U.S. economy has demonstrated remarkable resilience with the assistance of unprecedented fiscal and monetary policy support. Multiple rounds of fiscal stimulus aggregating to several trillion dollars, coupled with the Federal Reserve reducing their policy rate by 150 basis points and doubling the size of their balance sheet...
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