LOS ANGELES, CA - The USC Lusk Center for Real Estate has started a real estate blog on its website http://blogs.usc.edu/lusk featuring up-to-the-minute postings by USC Lusk Center faculty on developments in real estate markets nationally and internationally. "Many on our faculty publish articles on real estate and finance topics, but the normal research cycle can take weeks or months," said Richard K. Green, Director of the USC Lusk Center for Real Estate. "We started the blog to allow our faculty to publish their most current observations on our website and to solicit reactions and comments from the students, fellow academics, journalists and other experts who look to the Lusk Center faculty for their insights on the economic trends and policies that are shaping residential and commercial real estate markets worldwide."
Initial postings on the blog include a number of leading-edge topics of concern to policy makers:
Stan Ross, chair of the Lusk Center board of directors, speculates on the outcome of close to $300 million of commercial mortgage-backed securities (CMBS) that are coming due by the end of 2009. While this market has become highly illiquid and shares have fallen in value, Ross describes a wide range of alternatives to default in these securities, including paying off the CMBS with new equity and a new proposal from the Treasury to allow modifications to troubled loans that would not trigger immediate tax results. As a result, Ross foresees more loans restructured and modified, and fewer defaults.
Richard K. Green, Ph.D., director of the Lusk Center, comments on the monthly delinquency summaries published by Freddie and Fannie and says that while single-family delinquency rates remain high, multifamily loans continue to perform well because apartments are producing reasonably good cash flows. He notes, however, that "when multifamily loans come due, rising cap rates and falling rents will make them difficult to refinance, so we will start seeing defaults in this sector increase in the next few years."
Jenny Schuetz, assistant professor, USC School of Policy, Planning, and Development, explores the impact of changes in consumer buying behavior during the current recession on retail real estate. She believes consumer downtrading and the substitution towards cheaper items can best be managed by changing inventories within single stores, providing a quicker and cheaper solution for owners than tenant turnover. At the same time, she says, as long as the retail recession continues, "shopping centers with greater diversification, both of product types and price points, should be less vulnerable than retail centers with highly specialized stores or ones that cater primarily to the top end of the market."
Other postings discuss the economics of light rail systems, the varied impacts of differing state laws on mortgage defaults, and the changing economics in the market for large homes.
The USC Lusk Center for Real Estate www.usc.edu/lusk addresses timely issues that affect real estate, the urban economy and public policy. The Lusk Center is committed to advancing real estate knowledge by generating relevant research, offering educational programs and hosting major forums to bring together economists, business executives, students and community leaders. The Lusk Center has launched several online initiatives this year including a presence on Facebook, LinkedIn, and YouTube.
Source: USC Lusk Center for Real Estate