The US Tax Code gives real estate developers and managers special tax breaks and benefits not available to others, allowing a certain presidential candidate to pay no income taxes for decades while profiting to the tune of almost $1 Billion.  Here’s how: Let’s say a fellow named Donald buys a property for $1 billion, using only $300,000 of his own money and financing $999,700,000 with a bank (subsequently bailed out by taxpayers).  When the ... Read more

According to CEL & Associates, as of 2016, only 10 of the top 50 occupations with the most job openings require any office space; and over 40% of the U.S. workforce telecommutes.  The average white-collar worker spends only 30% of his or her time working in an office, and the average individual workspace is occupied only 55% of the time in a normal work week. The average U.S. tenant has 33% of its space ... Read more

San Diego County has a severe housing shortage caused by the inability to bring to market new single-family or multi-family units, which will likely continue for the foreseeable future. The result will be continued price increases in the sale and rental of homes. Those few units which can be developed will be located far from the locale of present and future jobs, resulting in longer commutes, greater congestion and increasing employee and employer dissatisfaction. ... Read more

Ever hear of a monetary policy by which companies and households get paid to borrow and charged to save money?  Seemingly crazy, this negative interest rate policy (“NIRP”) continues to spread around the globe much like a virus, having already infected central banks in Europe, Japan and other countries accounting for 25% of the global economy. (Thus far, Federal Reserve Chair Yellen has indicated no plans to implement a NIRP in the USA.) A negative ... Read more

Interest rates and cap rates remain low Inflation and unemployment remain low at about 2% and 5%, respectively New tech jobs are coming as Google and Bizness Apps locate facilities in San Diego Despite low interest rates, low vacancy rates, and rising rents – record high prices, low cap rates and fears of a potential downturn have begun to hamper CRE investment. We still see promising (and less risky) opportunity in certain sectors though, ... Read more

U.S. real-estate sales to Chinese buyers fell for the first time since 2011, to $27.3 billion. U.S. realtors say China's capital controls and currency depreciation, resulting in a cheaper Yuan, have curbed potential buyers. Still, the National Association of Realtors reports the average price Chinese investors paid for homes in the U.S. rose by more than 12% between 2015 and 2016.  California receives about one-third of this foreign investment (compared to New York’s 10%), ... Read more

Home equity represents the wealth of most middle-class Americans. Ideally, that wealth may be transferred to the next generation upon the death of a homeowner. However, reverse mortgages provide yet another financial instrument to confiscate the wealth and stunt the growth of the middle class by encouraging homeowners to extract decades of accumulated home equity in order to supplement their retirement. In part because the federal government now regulates reverse mortgages, the upfront costs ... Read more

As commercial real estate ("CRE") prices hit an historical peak for retail, industrial, office and multi-family investment properties, the earnings yields on other assets like stocks bonds have declined significantly, making steep CRE prices still seem more reasonable from an asset pricing perspective. However, CRE investors would be wise not to over-leverage with cheap debt, such that a future bump up in interest rates, slowing of growth, decline in rents and/or increase vacancies ... Read more

Long-term U.S. mortgage rates fell this first week of May 2016, following the Federal Reserve's decision not to raise its benchmark interest rate. The decline put long-term mortgage rates near their low levels for the year, offering an inducement to prospective home buyers during the spring buying season. Mortgage buyer Freddie Mac stated the average 30-year fixed-rate mortgage declined to 3.61% from 3.66% last week -- far below its level a year ago of ... Read more