Bank Sales Bring Out Bargain Hunters

Mall Massacre

For those of you who watch the CNBC Fast Money show, here is a clip of one of the hosts Karen Finerman recommending shorting Simon Property Group . I understand her trade and I agree that the fundamentals in the retail sector are weak, but one of the reasons Ms. Finerman cited for disliking the stock is that the occupancy rate is "very very high". Now I had no idea that having a 96% occupancy rate can be perceived as a bad thing in this market. Doesn't it actually demonstrate that Simon's portfolio is outperforming the market?

Wednesday Links

Apparel Retailers From Overseas Are Hitting the Malls in the U.S. ("WSJ")

Will Merrill's Markdown Cap the Credit Crunch? ("BusinessWeek")

Lone Star's Splash ("WSJ")

Blackstone Dips Toes In Mortgage Securities ("IDD Magazine")

For iStar, Ratings Now an Issue ("WSJ")

How to Shake Off the Mortgage Mess ("WSJ")

Insurers Cautious in Underwriting Green Building Exposures ("CPN")

Weak Dollar, Only Short-Term Benefits? ("GlobeSt")

Merrill Sells $30.6 Billion of CDOs to Lone Star at 22 Cents on the Dollar

Merrill has finally come clean. Does this mean the end is near? From Bloomberg:

Merrill agreed to sell $30.6 billion of CDOs -- the mortgage-related securities that have caused most of the firm's losses -- for $6.7 billion and provide financing for about 75 percent of the purchase price. The financing for the sale to Dallas-based private-equity firm Lone Star Funds is secured only by the assets being sold, meaning Merrill would absorb any losses on the CDOs beyond $1.68 billion.

Related link:
Merrill Aims to Raise Billions More ("WSJ")

Are Mideast Investors Losing Interest in US Real Estate ?

They are if you look at the numbers:

Middle East investment is expected to be flat or down this year compared to a banner year in 2007. More than half way through the year, Mideast investors have shelled out $2.7 billion for U.S. assets, according to Real Estate Analytics Inc., a New York-based real-estate research firm. But at that pace, this year's total sales will likely fall far below last year's $8.2 billion in deals.

Read more here......

New Linens-N-Shit Opens

From The Onion:

Although a sluggish market has forced many large-format retailers to scale back their operations and even close locations, Linens-N-Shit insists that the economy will not prevent the store from providing the consumer with superior quality linens, storage and organizational shit, framed crap, and some foreign-made designer bullshit.

The Last Lecture

I know this is not related to real estate, but if you have not had a chance to watch Randy Pausch's inspirational "Last Lecture", please do so. The 47-year old Carnegie Mellon Professor passed away Friday at his home in Chesapeake, Va.



Related links:
Professor Aimed 'Last Lecture' At His Children ... and Inspired Millions
A Final Farewell

Weekend Roundup

Collateralized Damage: Commercial Mortgage Securities Are at a Standstill ("Knowledge@Wharton")

Panel: Economic Perceptions Spookier Than Reality ("GlobeSt")

Renters go downtown to save on gas, commuting. ("CNBC")

How much free space will be left after retailers like Linens 'n Things close stores? ("Portfolio.com")

Mall Owners Join Retailers to Drive Back-to-School Sales ("Retail Traffic")

Mid-Year Retail Review: It's Not All Bad ("CoStar")

Destination retailers feel gas price pinch ("Plain Vanilla Shell")

‘Hotel in a Box’ Helps Intercontinental Install New Technology as Industry Improves Systems Integration ("NREI")

Building’s Sale at a Loss Reflects Market Travails ("NYT")

Credit crunch crimps commercial development. ("Portfolio.com")

Bust Up Fannie Mae and Freddie Mac ("Forbes")

Designer Cities: The Development Of the Superstar Urban Plan ("WSJ")

Restoring credibility to appraisers ("TheRealDeal")

Retail and Office Delinquencies Shoot Up ("CoStar")

The Outlook for Private Equity:Second Quarter 2008 ("IREI")

Pain In The Fannie

Source: Art of the Deals

Bill Moyers Journal: Mortgage Mess

CNBC's Real Estate Summit

Wall Street layoffs and the impact on NYC real estate, with Mary Ann Tighe, NY Tri State Region CB Richard Ellis CEO. Watch it here.


A look at how construction companies are faring as the cost of raw materials soars, with Daniel Tishman, Tishman Construction Corporation CEO. Watch it here.


A look at the businesses that are seeing increased leasing activity, with Ric Clark, Brookfield Properties president/CEO and Mary Ann Tighe, NY Tri State Region CB Richard Ellis CEO. Watch it here.

A look at the development of the new World Trade Center and real estate in downtown NYC, with Larry Silverstein, Silverstein Properties president/CEO and Mary Ann Tighe, NY Tri State Region CB Richard Ellis CEO. Watch it here.

Beige Book

The Beige Book is out. Here is an excerpt on commercial real estate:

Commercial real estate activity weakened or remained sluggish in a majority of Districts,although Cleveland, Minneapolis, and Kansas City noted some improvement. Boston characterized sentiment in the sector as “decidedly morose,” and industrial markets were especially weak in that District. Office market conditions in the Richmond District continued to weaken and were “bleak” in the Washington, DC area. Vacancy rates increased in the Philadelphia and Atlanta Districts, and were up noticeably in both Midtown and Downtown Manhattan, according to contacts in the New York District. Office rents remained steady in the Philadelphia District, and were little changed in the Boston District after taking concessions into account. More positively, contacts in the Minneapolis District noted rent increases and positive absorption in the Minneapolis-St. Paul area office market. Districts reporting on nonresidential construction generally noted sluggishness, which contacts in the Chicago and Kansas City Districts attributed in part to prohibitively high construction costs. Contractors in the Cleveland District were also worried about cuts but reported strong backlogs and a steady flow of inquiries. Contacts in many Districts also cited tightened financing as a constraint. San Francisco noted particularly steep drops in commercial construction in the San Diego area. Retail space was described as overbuilt in the Boston and Chicago Districts.

Is Student Housing Recession Proof?

The developers think so. For investors, it can be a defensive play:

For developers, the sector is considered recession-proof, thanks to generous parents and student loans. "We have been somewhat insulated from the macro economics of the economy," said Bill Bayless, chief executive of Austin, Texas.-based American Campus Communities Inc.

For investors in the bruised world of real-estate investment trusts, student housing can be considered a defensive bright spot. While one estimate has REITs losing at least 10% this year -- and some investors are increasingly jittery about apartment stocks -- two student-housing REITs, American Campus and Education Realty Trust Inc., have each returned more than 10% year to date. Merrill Lynch reportedly recently upgraded American Campus to "buy."

Read more here....

The Beginning of Lender-liability Lawsuits

As lenders try to reduce their exposure to real estate, some have stopped funding on construction projects, and the court maybe the developer's last resort. From WSJ:

The love affair between banks and builders during the housing boom has deteriorated into a series of divorces now spilling into the courts.

As lenders rush to curtail their real-estate exposure and preserve sorely needed capital, they are triggering lawsuits from builders that say the banks have unfairly cut off their construction financing, stopped their projects midstream and forced their companies to the brink of bankruptcy.

Mid-year Office Report

Grubb & Ellis says expect near-record office vacancy rates in 2009.

Coastal markets see new cracks in fundamentals, though supply remains mostly in check with demand nationally, CoStar reports.

State of Commercial Real Estate

Commercial real estate is feeling the pain, reports CNBC's Diana Olick. Watch it here.

Multi-family Investors Nervous About Fannie and Freddie Rescue Plan

The fear is that the possible nationalization of, or other fixes for, Fannie and Freddie could bring the agencies' commercial lending to an end. One byproduct: falling real estate portfolio values for those with exposure to multifamily and apartments.

Read more here.....

Weekend Roundup

How To Survive, and Perhaps Even Thrive, In a Bear Market. The Focus In Commercial Real Estate Right Now is on Finding Value, Not Growth. ("CoStar")

US Real Estate Market Prospects in an Era of Elevated Commodity Prices ("IREI")

PKF Predicts ‘Double Dip’ in Slowed Lodging Demand ("NREI")

At Midyear, Office Landlords Feeling the Pain. Coastal Markets See New Cracks In Fundamentals, Though Supply Remains Mostly in Check With Demand Nationally. ("CoStar")

From Russia With Rubles. In Manhattan, if you are a broker, it helps if you speak Russian. ("NYT")

Multifamily Industry Seeks Reassurance Amid Freddie Mac, Fannie Mae Distress ("NREI")

How Crimping Fannie, Freddie Could Harm American Families ("New York Sun")

Quote of The Day

“Too many people believe that when things are bad, they don’t know how they can get good and when they’re good, they don’t know how they can get bad. When you’re a real estate developer, you need to have a little more vision, and see where the momentum is going.” Stephen Ross, CEO and Founder of The Related Companies.

Too Many Lifestyle Centers

I was never a big fan of this concept. From WSJ:

Known as lifestyle centers, the open-air shopping venues offer small parks, fountains and cafés amid name-brand retailers selling fashion apparel, housewares and other discretionary fare. Developers raced to add new ones as they became popular with shoppers, especially women between 20 and 50 years old, a coveted category. Meantime, construction of traditional enclosed malls all but stopped.

But now, with the economy slumping and shoppers spending less, retailers that had flocked to the centers -- like Chico's FAS Inc., AnnTaylor Stores Corp. and Talbots Inc. -- have begun canceling expansion plans and even shutting stores. Others, such as Linens 'n Things Inc., have sought bankruptcy protection.

This couldn't happen at a worse time for lifestyle-center developers, which were putting up more of the shopping centers than ever. Last year they built 37 centers totaling some 12 million square feet, or roughly 40% of the total lifestyle-center square footage added this decade, according to market-research firm Portfolio & Property Research Inc. Double the 2007 total is now under construction, and three times as much is in the planning stages.

The economic slowdown, of course, means many of the planned projects won't leave the drawing board. But many centers where construction has begun will probably have difficulty leasing space when they open. That raises the specter that eventually they may not be able to pay their debt, adding to the strain on the already ravaged finance sector.

Time For Some Campaignin'

Send a JibJab Sendables® eCard Today!

Buyers Want Sleepover "Test Drive"

You got to do what you got to do:

In most markets, home buyers have the upper hand these days. That often means they have greater negotiating power when it comes to price or the ability to squeeze out extra perks from sellers.

But on occasion, they will ask a seller for even more, a request that will help get to know the home better. They will ask to sleep over.

As reality programs such as TLC's "Date My House" and HGTV's "Sleep On It" show buyers spending a considerable amount of time -- and sometimes an entire night -- in homes they are considering, some buyers in the real world are getting the chance to do the same.

US Office & Retail Construction to Fall Through 2009

From Bloomberg:

Construction of U.S. office and retail buildings is poised to fall for the rest of this year and through 2009 on lower demand from tenants, stricter lending standards and rising building costs, the American Institute of Architects said.

Office-building construction likely will drop 3.7 percent this year and 12.3 percent in 2009, the Washington-based group said today in its semi-annual Consensus Construction Forecast. Construction of shopping centers and other retail buildings is forecast to fall 8.3 percent this year and 9.9 percent next year.

Real-Estate Financier's Death Hints At Trouble for Lenders

The tragic death of a "hard money" lender in Arizona.

America Needs Another Bubble

Classic Onion:

The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.

Demand for a new investment bubble began months ago, when the subprime mortgage bubble burst and left the business world without a suitable source of pretend income. But as more and more time has passed with no substitute bubble forthcoming, investors have begun to fear that the worst-case scenario—an outcome known among economists as "real-world repercussions"—may be inevitable.

"Every American family deserves a false sense of security," said Chris Reppto, a risk analyst for Citigroup in New York. "Once we have a bubble to provide a fragile foundation, we can begin building pyramid scheme on top of pyramid scheme, and before we know it, the financial situation will return to normal."

Why Do Some Hotels Charge for WiFi, and Others Don't?

I never understood this. Portfolio.com's Joe Brancatelli explains.

Time To By REITs?

Barrion's Mike Hogan seems to think so. I'm not so sure about Barrion's these days. They had this cover story about the housing market, which seems to be way too optimistic. The Big Picture thinks Barron's housing cover is so terribly wrong.

"Vertical Farm"

Some may say the idea is "radical", while others think we could actually get the funding to do this.

Wall Street Bankers Rejected by Banks & Co-op Boards

In New York, investment bankers and others are having a hard time buying real estate. From NYT:

Those in the financial industry who still want to buy real estate are often unable to persuade lenders and co-op boards to work with them.

The biggest problem is that buyers who work on Wall Street no longer have the guarantee of huge bonuses to bolster their financial status. And even those who continue to get bonuses are finding that banks and co-ops will not let them count all that money as part of their income, because unlike a salary, it can fluctuate wildly.

The Collape of Steve & Barry's

The Journal today has a piece on Steve & Berry's, the discount clothing store that filed for Chapter 11 last Wednesday. Specifically, the article details how the company used tenant improvement allowances to boost its earnings growth. From 2004 to 2007, the company received $380 million of TI payments:

Mall owners have always viewed anchor stores as loss leaders -- owners offer favorable deals to big stores in exchange for bringing traffic to the malls. Financial inducements often come in the form of tenant-improvement allowances, which are upfront payments that retailers use to outfit the interiors of their stores. Landlords seldom monitor how the money is spent.

The mall owners welcomed Steve & Barry's with open wallets. One former Steve & Barry's executive recalls company co-founder Barry Prevor jumping up on his credenza with joy at company headquarters after negotiating the first multimillion-dollar payment in 2003. Mr. Prevor declined to comment for this story.

Read more here.....If you don't have a WSJ subscription, you can always go to google news search, type in the title of the article, you will then have full access to the article.

You Can't Count On Us

Related link:
IndyMac Seized by U.S. Regulators; Schumer Blamed for Failure ("Bloomberg")

Weekend Roundup

Rescue Debate: Paulson Insists Fannie, Freddie Holders Lose ("WSJ")

Fannie, Freddie, Folly. Why the two mortgage giants can't be allowed to fail. ("Slate")

Weathering the Crisis. Top executives discuss managing through the credit crunch and a slowing economy. ("Real Estate Portfolio")

Making Sense of the Market. Investors who know where to look can find opportunities. ("CIRE")

How 1 Property Sank the Savings Of 35 Investors ("WSJ")

Beyond the Obvious. Secondary-market financing success requires strong fundamentals. ("CIRE")

High Gas Prices Driving Real Estate in New Directions ("CoStar")

Starbucks Loses Ground on Real Estate Front ("Retail Traffic")

Mixed-Use Matures. Developers Sharpen Their Focus to Succeed in Small Markets. ("CIRE")

Nearly 4,500 Store Closings ... And Counting ...Market Conditions Continue to Force Bankruptcy, Store Closures and Shopping Center Vacancy. ("CoStar")

Retail Fundamentals Look Solid for Second Half 2008 ("Real Estate Portfolio")

Sovereign Wealth Rising. Sovereign wealth funds create new financial force in real estate investing. ("Real Estate Portfolio")

Land Use, Energy Prices and Sustainability. Keynote Address by Richard M. Rosan President, Urban Land Institute Worldwide American Chamber of Commerce in Hong Kong. ("ULI")

The Right Mix. Amid slumping market, dealmakers are still hopeful. ("REBusinessOnline")

The Cost of Parking Rises: Manhattan, Boston, San Francisco Top List ("Developments")

Rent vs Own

In 34 cities, it's better to rent.

Non-traditional Lenders Active in Tough Lending Environment

Borrowers just need to be prepared to pay for it:

"Alternative lenders are filling a significant void in liquidity in the real estate capital markets that has vanished due to the credit crunch," the founder and managing partner at Madison Realty Capital, Josh Zegen, said. He said his fund, with $250 million of institutional equity under management, "has seen volume of deals pick up in the last year as traditional lenders have pulled back in their willingness to lend. As a fund, we are not governed by regulatory agencies and are not subject to syndication or securitization markets so we can make quick decisions on the fly."

Read more here....

Oil For Real Estate

“This is the natural outgrowth of us exporting a huge amount of dollars through high commodity prices to countries that have to reinvest it somewhere,” said Douglas Rediker, a sovereign fund expert at the New America Foundation, a research and advocacy organization. “These countries have to extend beyond Treasury bills, and that means equities and real estate.”

Real more here....

Lenders See Uptick in Loan Extension Requsts

With the CMBS market all but shut down, many lenders are seeing an uptick in loan extension requests, especially one-year renewals. So what do lenders look for when they review the requests? From GlobeSt:

Michael Bryant, senior vice president in Dallas for Capmark Finance Inc., and Lance Wright, regional director for Norwalk, CT-based GE Real Estate, say extension requests have been steadily climbing for six months and are certain to continue upward as CMBS loans of recent years come due. The most common request is a one-year breather.

"As each lender reviews the extension request, they're going to look first and foremost at the sponsorship," Bryant says, "and next, the business plan." The common-sense approach still can result in rejection due to today's market conditions, he explains.

"Lenders also are looking at whether the borrower has attempted to get alternate financing or sell the asset. They may make the request because they feel it's the wrong time to sell the asset, but from the lender's perspective, they just want to be repaid," Bryant tells GlobeSt.com. "It has to be a very legitimate reason and make good economic sense for the investment committee to approve the extension."

Fewer Filling in Hotel Vacancies

Related links:
Marriott Second-Quarter Net Falls on Slowing Travel ("Bloomberg")

Chrysler Building Sold

From Bloomberg:

New York's Chrysler Building, once the world's tallest skyscraper, was acquired yesterday by the Abu Dhabi Investment Council, a Middle Eastern sovereign wealth fund, for an undisclosed price.

Abu Dhabi Investment Council acquired the Chrysler Building from a fund managed by Prudential Financial Inc., said Theresa Miller, spokeswoman for the Newark, New Jersey-based insurer. Rick Matthews, a spokesman for Tishman Speyer Properties LP, which owns a minority stake in the tower, declined to comment. Abu Dhabi Investment Council is prohibited by law from discussing its investments, an official said when contacted by telephone today.

Related link:
Abu Dhabi Fund Buys Stake In New York's Chrysler Building ("WSJ")

Caution On REITs

From Market Watch:

RBC Capital Markets analysts said Tuesday that real estate stocks could continue to face headwinds as investors pare back leverage and risk as a result of difficult markets and credit conditions.

"We believe that real estate companies will find themselves directly impacted by the lowered risk profile of debt and equity investors," they wrote in an investor note. "As major consumers of capital, real estate companies will likely need to adhere to a new set of capital rules -- including lower leverage."

The Gawker of The Subprime World

The New York Times has a piece on Mortgage Lender Implode-O-Meter, a web site that keeps track of the number of home mortgage lenders that have run into trouble. As of Tuesday, the count is 266, and lenders are trying hard to keep their company name of the list:

“No one wants to be number 266,” said Jim Reichbach, a vice chairman and leader of Deloitte’s banking and securities team. “This is a death toll that is equivalent to the casualty ticker of the Vietnam War.”

Real Estate's Silver Lining

Watch billionaire real estate investor Larry Silverstein share his second-half outlook on commercial real estate with CNBC's Maria Bartiromo here.

The "Crisis" of Starbucks

Source: Journal Advocate

Retail Vacancies Likely Get Worse Before They Get Better

Foreclose Could Lead To Increase in Homelessness

I agree that this is totally underreported:

Jeremy Rosen, executive director of the National Policy and Advocacy Council on Homelessness, thinks the effect of foreclosures on low-income renters has been underreported.

"The foreclosure crisis is hitting two groups," Rosen said. "The owners of houses and buildings, and the renters that are occupying them."

The main issue for Rosen pertains to time: Renters can be forced to leave a foreclosed property at a faster pace than a homeowner, who typically gets earlier notice that a crisis is looming. If the renter has limited income, that compounds the problem.

Nontraditional Usesr Fill Dark Spaces

As US retail store closures approaching six-year high, landlords are finding creative ways to fill the dark spaces. According to Portfolio.com:

"What we do in these times, we look for nontraditional uses to fill spaces and to generate income and, more importantly, traffic to help existing retailers to produce more sales," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team.

Bemis said it's typical to turn to the public sector, such as colleges or city and state services, as tenants. The Department of Motor Vehicles is a great tenant for a mall or strip center, Bemis said, because people are constantly coming in and out of the government office.

Weekend Roundup

Lax Real Estate Decisions Hurt Starbucks. ("NYT")

The Buyout Boom’s Last Big Deal ("Dealbook")

Businesses Take Less Office Space Nationwide. Landlords Feel Pain As Market Softens; Tenants Gain Edge ("WSJ")

Crisis or correction? ("The Real Deal")

Wall Street lobbies to delay accounting rules that could bring $5 trillion back onto bank balance sheets ("Financial Week")

Six Months into 2008, the CMBS Market Has Failed to Recover. ("Retail Traffic")

Moody’s to check on accuracy. ("FT")

Staving off commercial foreclosure. In change from past, lenders discount, sell off mortgages on distressed properties. ("The Real Deal")

Commercial Real Estate: Harder Times Ahead ("Business Week")

Surge in Mega Projects Begs Question: Why Now? ("NREI")

REITs Bruised by Credit Crisis. Index Lags Behind S&P Amid Worries About the Economy ("WSJ")

Goldman Turns Bearish On Equity REITs. ("Investment News")

Trump’s Adventures in the Land of Golf. ("NYT")

Housing Crunch Slows Demand for Independent Living, Continuing Care Communities. ("NREI")

Debt-Laden Casinos Squeezed by Slowdown. ("WSJ")

What Do Women Want? A Developer Asks, and Listens. ("NYT")

Rents Climb Despite ‘Shadow Market’. ("Developments")

Toronto Bulks Its Flex ("The Slatin Report")

Real Estate Investors May Resort to Prayer. ("The New York Sun")

The Other Real Estate Disaster?

Forbes has a great piece on how real estate opportunity funds calculate their returns and makes a case that pension funds might do a lot better buying REITs than investing in opportunity funds.

Related links:
Hidden Losses
A Code of Silence

US Office Rents Rose 1% In Second Quarter

From Bloomberg:

Asking rents for U.S. offices rose 1.1 percent in the second quarter from the previous three months, the smallest gain in almost three years, as job losses and a slowing economy reduced tenant leasing, said research firm Reis Inc.

The effective rent, or the amount tenants actually pay property owners, rose 0.7 percent, the third straight quarter it lagged behind asking rents, a sign landlords are offering concessions to tenants, Reis said in a survey today. The annualized increase was 4.3 percent for asking rents and 2.9 percent for effective rents. The national vacancy rate rose 0.2 percentage point to 13 percent.

Other Links:
Businesses Take Less Office Space Nationwide ("WSJ")

Regional Banks' Troubled Construction Loans

From WSJ:

Wall Street is bracing for regional and small banks to fess up to large losses from their mounting volume of soured construction loans made primarily to home builders.

According to the Federal Deposit Insurance Corp., $45.4 billion of the $631.8 billion in construction loans outstanding at the end of the first quarter were delinquent. When banks announce second-quarter results in coming weeks, they are expected to report sharp increases in loans that builders can't repay. Banks are also facing intensifying pressure from federal and state regulators to deal with the problem loans on their books.

It's important to note that majority of these troubled loans were made to home builders, and the delinquency rate for nonconstruction loan on commercial real estate remains near historic lows.

A Mediocre Underwriter

BofA's other vexing deal.

Worst.Deal.Ever.

BofA Gets Its Countrywide Deal, for Better or Worse.

What You See Is What You Get

Canada ranks first amongst 82 countries in transparency in the real estate industry.

New REIT Financial Reporting Will Be Obscured on a Global Basis

Starting January 1, 2011, REITs in 110 countries will prepare their financial statements based on the new international financial reporting standards (IFRS). One single most important change is how property values are reported:

As far as real estate is concerned, the most important single change is the requirement that companies report fair market value of their properties in all financial statements on an annual basis. Currently, companies report the purchase price of the property less accumulated depreciation, which usually results in a significantly lower figure than fair market value.

The change in resale value would then be reported as either a profit or loss on financial statements. This paper profit, however, would not affect REIT distributions; nor would market value gains be taxable.

Read more here....

Institutional Investors Consider Trimming Investment Manager Rosters

From Pensions and Investments:

Some large real estate investors are taking a second look at their rosters of investment managers with a view to focusing on a smaller number of players.

The current state of the economy and the real estate market might be forcing some institutional investors into adopting this approach. With the number of real estate transactions down, investors are getting less cash back from their investment managers. Meanwhile, the declining stock market is causing real estate portfolios to grow as a percentage of total assets, something called the “denominator effect.” This is making capital for real estate scarce.