October 27, 2010
This week’s perspective is provided by Tom Powers:
The capital markets remain in flux. Four months ago, the bigger the transaction the better. Today, if the transaction is too big, we are starting to see push back. For core type transactions the ‘sweet spot’ now seems to be in the $50 – $150 Million range. Also, if the product is not core or core-plus, then the buying pool drops dramatically. Debt is plentiful and inexpensive for the right transaction and many buyers are still trying to tie up opportunities to take advantage of the favorable debt before it is a thing of the past – but this is only true for core and core-plus properties.
The combination of Europe’s problems, our own economic issues and the uncertainty in the Middle East and Northern Africa are bringing pause for many. (It will be interesting to see if/how the fate of Gadhafi will affect people’s mindset). Unfortunately, things may not improve dramatically until Europe resolves their problems and we get some good news on the home front.
We are all much busier than a year ago and for that we are thankful. Keep the faith.