The Future of Commercial Real Estate | Real Estate

Although serious supply-demand imbalances have continued to plague real estate markets into the 2000s in many areas, the mobility of capital in current sophisticated financial markets is encouraging to real estate developers. The loss of tax-shelter markets drained a significant amount of capital from real estate and, in the short run, had a devastating effect on segments of the industry. However, most experts agree that many of those driven from real estate development and the real estate finance business were unprepared and ill-suited as investors. In the long run, a return to real estate development that is grounded in the basics of economics, real demand, and real profits will benefit the industry.Syndicated ownership of real estate was introduced in the early 2000s. Because many early investors were hurt by collapsed markets or by tax-law changes, the concept of syndication is currently being applied to more economically sound cash flow-return real estate. This return to sound economic practices will help ensure the continued growth of syndication. Real estate investment trusts (REITs), which suffered heavily in the real estate recession of the mid-1980s, have recently reappeared as an efficient vehicle for public ownership of real estate. REITs can own and operate real estate efficiently and raise equity for its purchase. The shares are more easily traded than are shares of other syndication partnerships. Thus, the REIT is likely to provide a good vehicle to satisfy the public’s desire to own real estate.A final review of the factors that led to the problems of the 2000s is essential to understanding the opportunities that will arise in the 2000s. Real estate cycles are fundamental forces in the industry. The oversupply that exists in most product types tends to constrain development of new products, but it creates opportunities for the commercial banker.The decade of the 2000s witnessed a boom cycle in real estate. The natural flow of the real estate cycle wherein demand exceeded supply prevailed during the 1980s and early 2000s. At that time office vacancy rates in most major markets were below 5 percent. Faced with real demand for office space and other types of income property, the development community simultaneously experienced an explosion of available capital. During the early years of the Reagan administration, deregulation of financial institutions increased the supply availability of funds, and thrifts added their funds to an already growing cadre of lenders. At the same time, the Economic Recovery and Tax Act of 1981 (ERTA) gave investors increased tax “write-off” through accelerated depreciation, reduced capital gains taxes to 20 percent, and allowed other income to be sheltered with real estate “losses.” In short, more equity and debt funding was available for real estate investment than ever before.Even after tax reform eliminated many tax incentives in 1986 and the subsequent loss of some equity funds for real estate, two factors maintained real estate development. The trend in the 2000s was toward the development of the significant, or “trophy,” real estate projects. Office buildings in excess of one million square feet and hotels costing hundreds of millions of dollars became popular. Conceived and begun before the passage of tax reform, these huge projects were completed in the late 1990s. The second factor was the continued availability of funding for construction and development. Even with the debacle in Texas, lenders in New England continued to fund new projects. After the collapse in New England and the continued downward spiral in Texas, lenders in the mid-Atlantic region continued to lend for new construction. After regulation allowed out-of-state banking consolidations, the mergers and acquisitions of commercial banks created pressure in targeted regions. These growth surges contributed to the continuation of large-scale commercial mortgage lenders [http://www.cemlending.com] going beyond the time when an examination of the real estate cycle would have suggested a slowdown. The capital explosion of the 2000s for real estate is a capital implosion for the 2000s. The thrift industry no longer has funds available for commercial real estate. The major life insurance company lenders are struggling with mounting real estate. In related losses, while most commercial banks attempt to reduce their real estate exposure after two years of building loss reserves and taking write-downs and charge-offs. Therefore the excessive allocation of debt available in the 2000s is unlikely to create oversupply in the 2000s.No new tax legislation that will affect real estate investment is predicted, and, for the most part, foreign investors have their own problems or opportunities outside of the United States. Therefore excessive equity capital is not expected to fuel recovery real estate excessively.Looking back at the real estate cycle wave, it seems safe to suggest that the supply of new development will not occur in the 2000s unless warranted by real demand. Already in some markets the demand for apartments has exceeded supply and new construction has begun at a reasonable pace.Opportunities for existing real estate that has been written to current value de-capitalized to produce current acceptable return will benefit from increased demand and restricted new supply. New development that is warranted by measurable, existing product demand can be financed with a reasonable equity contribution by the borrower. The lack of ruinous competition from lenders too eager to make real estate loans will allow reasonable loan structuring. Financing the purchase of de-capitalized existing real estate for new owners can be an excellent source of real estate loans for commercial banks.As real estate is stabilized by a balance of demand and supply, the speed and strength of the recovery will be determined by economic factors and their effect on demand in the 2000s. Banks with the capacity and willingness to take on new real estate loans should experience some of the safest and most productive lending done in the last quarter century. Remembering the lessons of the past and returning to the basics of good real estate and good real estate lending will be the key to real estate banking in the future.
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5 Great Tips to Stop Travel Anxiety | Travel

While most of us enjoy holidays and traveling, many find the associated travel anxiety tough to bear. Travel anxiety isn’t a disease but it is rather the fear of the unknown. Fear of travel is usually caused by several factors. Some people may worry about their house and pets when they are away while others might have had unpleasant traveling experiences during their previous trips. Others are afraid of flying. Some fret that the trip will turn out to be a disaster and worry about all of the details. All of these are examples of worries related to travel that can lead to varying degrees of uneasiness. Regardless of the causes or intensity of your anxiety, it can really compromise the pleasure and excitement of your trip.Although, travel anxiety is common in both experienced and novice travelers, most travelers have positive traveling stories to tell. Probably, they learned how to manage their anxieties and have regained the joy of travel. It is not too late; you can also overcome travel anxiety by following a little advice. The following 5 tips to stop travel anxiety could prove invaluable to you in planning your next holiday.5 Tips to Stop Travel Anxiety1. Spend time making Preparations Prior To Your TripFrom past experiences, to think of the details and annoyances that bothers you about traveling. For example, you think that your house will be in a mess once you step out of the door hire a house cleaner to clean your home prior to your return. If flight travels frightens you, you can equip yourself with your iPod or your favorite book to keep you busy while you’re traveling. Simply make a list of those things you think you’ll require in your trip and those things you won’t want to be left running while you are away. The time spent organizing, planning and taking care of all the details well in advance will help to stop travel anxiety.2. Don’t ProcrastinateSome people are well aware of their travel anxieties and they’ll often avoid taking care of the details; eg. booking a ticket, packing, etc. They will make excuses, avoid and procrastinate due to previous poor experiences with traveling. Just because you have travel anxiety doesn’t mean that avoidance will eradicate your fears. If you really want to take control over travel anxiety, get yourself involved in the action by preparing early and taking care of all necessary details. Keep in mind, travel fears are just made up fears and they are never real.3. Learn How to Cope Up With Flight PhobiaFor those people who worry about flying, you may wan to dig a little deeper to find the root of this fear. Get to know exactly what frightens you. Are you are acrophobic or claustrophobic? Perhaps the mechanical sounds bother you or air turbulence puts the fright into you. All of these fears are irrational meaning you can counter them with rationality. Airlines have strict safety measures on board. Once you are aboard, try to listen to attendant instructions to calm your nerves. Also, use anything that you like such as music to disrupt your thoughts while you are traveling.4. MeditateTo effectively manage their travel anxiety, many individuals use meditation to gain control. Meditation makes use of a kind of self-hypnosis, so you can calm your nerves and mind down. Various self-hypnosis scripts designed specifically to ease travel anxiety can be found online. Meditate on these scripts and your mind will be at ease during your time of travel. The scripts are great tools of converting people’s subconscious minds into a friend rather than a foe. Instead of having a subconscious mind that is deep-seated in travel anxiety, you’ll have a subconscious mind that is confident and not frightened of flights.5. Get rid of the UnknownsIlluminate your travel shadows by doing a research prior to your trip of things you’ll expect to encounter once you’re at your destination. Apart from visiting various travel blogs, you can also use travel guides to become well-informed with your destination point. Go online and checkout your accommodation so you will know what to expect. Have your looked into travel from the airport to the hotel? What about meals and special dietary requirements? The little unknowns add up and will add to your travel anxiety.Besides the 5 tips to strop travel anxiety strategies listed above also ensure that you maintain proper communication using Facebook, MySpace, etc. Keeping the communication channels open with loved ones back home will keep you connected.Observing the 5 tips listed above is a great way to start you on the path of happy travels. Best of luck!
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