Investment Real Estate - US - August 2006

Table of Contents

• Introduction and Abbreviations
• Introduction
• Scope of the report
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Summary--top trends in investment real estate markets
• Overview of the markets
• Factors impacting profitability
• Other markets--REIT; RMBS; CMBS
• The real estate investor
• Emerging real estate trends
• Market Drivers
• Fear can also be a moderating influence: bubble or not?
• "Marginal" margins
• Demographic drivers
• Boomers, Boomers, and Boomers
• Characteristics of Baby Boomers
• Characteristics of Boomers who own rental investment property
• Baby Boomer retirement plans
• Baby Boomer investment strategy
• The Echo Boomers
• Demographics by ethnicity
• Tax drivers
• Legal/regulatory drivers
• Residential investment drivers
• Recent residential trends
  • Figure 1: Characteristics of second home buyers, 2006
  • Figure 2: Weekly mortgage interest rates, 1997-2006
  • Figure 3: Primary mortgage market survey summary, U.S. averages, 2006
• Piggyback and IO loans
• Mortgage marketing channels
• The Internet
• Methods used to search for properties to purchase
• The real estate professional's role
  • Figure 4: What second home/investment property owners want most from real estate professionals, 2006
  • Figure 5: Method of second home purchase (percentage distribution), 2006
• Commercial real estate drivers
  • Figure 6: Commercial real estate capitalization rate characteristics, 2005
• Office market drivers
• Industrial drivers
• Retail drivers
• Multifamily drivers
• Hospitality drivers
  • Figure 7: Travel expenditures in the U.S., at current and constant prices, 1999-2005
• REITs drivers
• CMBS drivers
  • Figure 8: Quarterly gross issuance of U.S. CMBS, 1990--Q2 2006
• Market Size and Segmentation
• Residential
  • Figure 9: Investor and second-home share of prime loan origination volume (percentage), 1999-2005
  • Figure 10: Investor and second home share of prime conforming mortgage loans, 1999-Q1 2005
• Metropolitan statistical areas
  • Figure 11: Metropolitan statistical areas with the highest second home and investor share, Q1 2005
• Commercial real estate
  • Figure 12: Change in demand for commercial real estate loans, Q2 1995Q1 2006
• The office sector
  • Figure 13: U.S. downtown office market summary statistics, 1999-2005
  • Figure 14: U.S. suburban office market summary statistics, 1999-2005
  • Figure 15: U.S. office market summary statistics, Q1 2006
• The industrial sector
  • Figure 17: U.S. industrial market summary statistics, 1999-2005
  • Figure 18: U.S. industrial market summary statistics, Q1 2006
• The retail sector
  • Figure 19: U.S. retail sales by sector, 2004-05
  • Figure 20: U.S. shopping center--inclined sales, 1996-2005
• The multifamily sector
  • Figure 21: U.S. number of multifamily buildings completed, by number of units per building built for rent, 1999-2005
• The hospitality sector
  • Figure 22: U.S. hospitality sector construction pipeline, June 2006
• REITs
  • Figure 23: Historical REIT industry market capitalization, 1971-2005
  • Figure 24: Property acquisitions by REITs, 1992--Q2 2006
  • Figure 25: Twenty-year average annual total return of REITs and other investment classes, May 1987-May 2006
  • Figure 26: REIT Investment performance by property sector and subsector, June 2006
• REIT bonds and REIT stocks
• REIT requirements
• REITs rating agency performance
  • Figure 27: REIT upgrades and downgrades by S&P, 1999-Q2 2006
• Recent REIT evolutions
• The securitization sector
• Introduction
• RMBS
• CMBS
  • Figure 28: Issuance of commercial mortgage-backed securities, 2001-06
• Competitive Landscape
  • Figure 29: Realtor magazine's top 100 companies, 2005
  • Figure 30: Real estate firms ranked by growth in sales volume, 2004-05
  • Figure 31: Real estate firms ranked by growth in transaction sides, 2004-05
  • Figure 32: Real estate agents and brokers sole proprietorships, U.S. industry profitability averages, 2006
  • Figure 33: Real estate managers sole proprietorships, U.S. industry profitability averages, 2006
  • Figure 34: Real estate agents, brokers and managers partnerships, U.S. industry profitability averages, 2006
  • Figure 35: Risk index of real estate related industries, 2006
  • Figure 36: Employee productivity, real estate & other activities related to real estate, U.S. national averages, 2006
• Advertising and Promotion
• Online Marketing
• Keyword searches
• Print Advertising
• Non-Newspaper Print Advertising
• The Consumer
• Summary of consumer survey findings
• Who owns investment real estate?
  • Figure 37: Type of real estate investment, by income, 2006
  • Figure 38: Type of real estate investment, by employment status, 2006
  • Figure 39: Type of real estate investment, by ethnicity, 2006
• How much do investors own?
  • Figure 40: Percentage of portfolios in real estate or REITs, by gender, 2006
  • Figure 41: Percentage of portfolios in real estate or REITs, by income, 2006
• Primary reasons for investing in real estate
  • Figure 42: Primary reason respondent owns investment real estate or REITs, by gender, 2006
  • Figure 43: Primary reason respondent owns investment real estate or REITs, by income, 2006
  • Figure 44: Primary reason respondent owns investment real estate or REITs, by age, 2006
• Methods for finding properties
  • Figure 45: Primary method used to find properties or REITs, by gender, 2006
  • Figure 46: Primary method used to find properties or REITs, by income, 2006
  • Figure 47: Primary method used to find properties or REITs, by age, 2006
• Methods for investing
  • Figure 48: Primary method used to invest in properties or REITs, by gender, 2006
• Expected returns
  • Figure 49: Annual rate of return expected on real estate investment, by gender, 2006
  • Figure 50: Annual rate of return expected on real estate investment, by income, 2006
  • Figure 51: Annual rate of return expected on real estate investment, by age, 2006
• Methods for financing
  • Figure 52: How property was financed, by gender, 2006
  • Figure 53: How property was financed, by age, 2006
  • Figure 54: How property was financed, by income, 2006
• Future Trends
• Introduction
• Residential real estate
• Markets to watch
• Expected returns by property/investment type and sources of capital
• Increasing foreclosure rates may provide incentive to invest
• Raw land transactions
• College town properties
• Economic trends
  • Figure 55: NAR Economic Forecast, 2004-07
• Home sales projections
• Commercial investment real estate
  • Figure 56: National Association of Realtors Commercial Real Estate Forecast, 2005-07
  • Figure 57: Total expected unleveraged returns by asset class, 2006
• Office sector
• Office sector buy/hold/sell
  • Figure 58: Expectations for office real estate performance in major metropolitan areas, 2006
• Industrial sector
• Infrastructure rebuilding affects industrial sector
• Warehouse sector buy/hold/sell
  • Figure 59: Expectations for warehouse real estate performance in major metropolitan areas, 2006
• Retail forecast
• Entertainment/lifestyle center concerns
• Retail shopping malls
• Retail sector buy/hold/sell
  • Figure 60: Expectations for retail real estate performance in major metropolitan areas, 2006
• Multifamily forecast
• Multifamily buy/hold/sell
  • Figure 61: Expectations for multifamily real estate performance in major metropolitan areas, 2006
• Hospitality forecast
• Overbuilding and wear & tear plague hospitality
• Hospitality forecast
  • Figure 62: U.S. Hotel construction forecast, 2006-08
• REITs forecast
  • Figure 63: REIT sector outlook, 2006
• REITs stability in ratings
• CMBS forecast
  • Figure 64: U.S. CMBS outlook, 2006
• RMBS forecast
  • Figure 65: U.S. RMBS outlook, 2006
• Technology trends
• Appendix: Trade Associations