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GLG News by this Author

depreciation isn't just about book-keeping

February 6, 2008

Analysis of: Birth, Death and Shopping | www.economist.com

Depreciation happens. Buildings get old, are demolished, and new ones put in their place. In booms, and with inflation, overall property prices in nominal dollars may not go down. Shopping centers are a prominent example.

The same, and less of it.

February 4, 2008

Analysis of:Home Affordability | www.marketwatch.com

For the next several years we'll be shaking overcapacity out of homebuilding. Affordability is not a very clear term, but basically is related to another one - depreciation.

how much leverage?

February 1, 2008

Analysis of:Carrefour Shelves Spinoff Due To Market Woes | www.realestatejournal.com

Leverage is neither good nor evil. It's a tool. How much is good is a case by case question.

Who pays for the floor?

October 10, 2007

Analysis of:Deal for Apartment Giant Completed | online.wsj.com

In the absence of private funding, will Fannie and Freddie really put a floor under the market? If they do, what will it cost and who will pay?

...how we REALLY got here, and what that means for tomorrow...

September 24, 2007

Analysis of:Understanding Recent Trends in House Prices and Home Ownership | www.kc.frb.org

House prices when going up are a function of household income, and mortgage interest. Going down, the descent is limited by household income and the slow pace of the foreclosure process, but exacerbated by any increase in either unemployment or long-term interest rates. The proportion of homeowners, versus renters, is partly a question of mortgage interest but more a question of underwriting standards. My bet is that in summer 2009 nationwide home prices as commonly reported will be off on the order of 10% from summer 2006. So, what is to be done?

...it's hard to make predictions, especially about the future...

September 21, 2007

Analysis of:Commercial Real Estate Index Continues Rise in Second Quarter...according to NAR Commercial Alliance | www.realtor.org

Transaction based indexes have systematic problems. So do valuation based indexes. Either can be used for some purposes, for instance gauging relative past performance. The big question is the relevance of indexes at all. Prediction is another art.

What we don't know can hurt us.

August 31, 2007

Analysis of:Fearing Slide in Economy, Fed Cuts Its Discount Rate | www.nytimes.com

The hypothesis that securitization spreads risk is a cliche. It might even have some truth to it. The problem is the price. Consider. Start with a group of individual loans representing an aggregate of $X of debt. What sort of markup is necessary to justify turning those loans into a mortgage backed security (MBS)? How much more markup to feasibly market a collateralized debt obligation (CDO)? Now, what if the buyers of these have borrowed money to make the bets? Are we surprised that we're seeing volatility where the original idea was to spread risk?

if you like subprime, you'll love the commercial property bubble

August 29, 2007

Analysis of:Commercial Real Estate, Come On Down | www.washingtonpost.com

It's fine to talk about gloom and doom, but it's an ill wind that blows no good. Counter cyclical investment is worth thinking about.

 

Bubble, bubble... commercial property trouble

August 1, 2007

Analysis of:American Home Mortgage hit by margin calls | www.marketwatch.com

It's a great time to be selling commercial/office property. It is not a good time to be buying.

how fast will the housing bubble deflate?

May 25, 2007

Analysis of:housing bubble bursting | talk.ocregister.com

If the housing bubble deflates quickly the impact on the economy and on the holders of mortgage backed securities will be severe. If, however, prices stabilize or decline slowly the effect is likely to be less dramatic. Inflation might even erase the price imbalances. A recession, however, would make a rapid deterioration more likely.

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