Economic Review

Here is a sample of the economic reports that are available to registered members of Millennium Realty Group.

The dollar downward slide is scaring a lot of investors into investing more in the commodity markets such as oil, gold, grains, and such. The unfortunate result of this action by investors is that it is fueling inflation, which is then discouraging spending, and further weakening the economy. All indications by major forecasting and economic boards show that although the dollar will probably slip further it will not free fall. 

In regards to the capital markets it is expected that they will remain volatile in the near term.  We are seeing that debt capital is still available, but the sources are now different from what they were a year ago. Looking at the first quarter of 2007 we are noticing that conduit and CMBS lending is down when compared to last year. In its place we have seen other lending sources step in and increase their lending. For example, as of the first quarter of 2007,  both Freddie Mac and Fannie Mae increase their originations by as much as 66%. We have also noticed that originations among life insurance companies have increased by 16% when compared to the previous six months.

Despite these lenders coming into the market the result is that tighter underwriting is now the new standard. Today, it is very common for commercial mortgage loans to require actual operating fundamentals as opposed to pro forma numbers. Also, loan to values have been pulled back to historical norms of about 70%. Finally, we are seeing that lenders are looking at both the quality of the property and the quality of the market where the subject property is located. Lastly, lenders have increased the debt service-coverage ratios from 1.1x a year ago to 1.25x or greater. All these issues clearly demonstrate the importance of working with an experience team like Millennium Realty Group when investing in commercial property.