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Good News/Bad News

Dallas-Fort Worth
Good News/Bad News
Remember these old ads: When E.F. Hutton talks, people listen. The same could be said for Texas A&M Real Estate Center chief economist Dr. Mark Dotzour.
Mark Dotzour
Recently, Mark shared a good news/bad news scenario with the Texas Association of Realtors winter meeting (though this pic is from last summer). Good news: US office space occupancy increasedfor the first time in three years in Q4 '10 and rents rose for the first time since 2008. Mall vacancy rates declined slightly over the past two quarters while apartment vacancy fell below 7% in Q4, the lowest since 2008. Cap rates are falling again as are mortgage rates and life insurance company LTV ratios are increasing. CMBS financing is coming back and troubled loans are being worked out and/or extended.
National City Tower
Mark says it's a positive indicator that KBS recently paid $115M for National City Tower (above) in Louisville. (Yes, you can even get your Kentucky news here, though we're not happy that the Wildcats beat the Gators yesterday.) The building last sold for $95M in 2005. Of course, there's also the bad news: Bank loans for CRE are virtually non-existent. Federal regulators are warning Texas bankers about exceeding their CRE loan limits with federal regulators telling Texas bankers that they are concerned about excess liquidity and that ?it's OK to buy Treasuries until we get out of this thing.? The question is, how will Texas finance future growth?