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CAR Commercial Forum Meeting – September 2013. (Chicago Metro) . Robert Carrillo September2013. Macro Economic Trends and Forecast. Estimate for 2013.Q2 GDP is 1.7 indicating modest but sustained growth QOQ Quantitative Easing and Tapering is coming

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car commercial forum meeting september 2013

CAR Commercial Forum Meeting – September 2013

(Chicago Metro)

Robert Carrillo

September2013

macro economic trends and forecast
Macro Economic Trends and Forecast
  • Estimate for 2013.Q2 GDP is 1.7 indicating modest but sustained growth QOQ
  • Quantitative Easing and Tapering is coming
  • QE4? Fed likely to taper back on asset purchases
  • Key interest rates expected to leave rates near 0 (until unempl. rate nears 6.5%). Economists split on when Fed will raise but most say 2015.

*Reporting and polling by DeeptiGovind

slide3
Jobs
  • Unemployment dropped to 7.3% Nationally
  • 63.2% Participation Rate (lowest since 1978)
  • Economists Mixed (sustained growth at subpar pace
business sentiment
Business Sentiment
  • Business spending shows growing confidence in the first half of the year
  • The first quarter spending was down 4.6 percent, with a decline driven by a 25.7 percent drop in spending on commercial structures
  • However, the second quarter posted a much better performance, with an annual growth rate of 4.6 percent
  • Spending on commercial buildings rose 6.8 percent
  • In line with growing demand for properties, prices rose 8 percent on a yearly basis, according to RCA’s Commercial Property Price Index. Prices rose the most for apartments (15%) and retail buildings (13%).
general market info
General Market Info
  • Chicago is the 3rd largest US city by population
  • Employment lagging US and unemployment still high, 10.3 (Chicago) and 9.1 (Illinois), but positive movement being made
  • Multi-family projected increase of over 225%
risks and opportunities
Risks and Opportunities
  • Foreclosure in SFR sector is still a little high
  • Unemployment slow to recover
  • Apartments greatest improvement,
  • due to increased household formations and tight
  • mortgage underwriting
  • Multi-family permits forecasted to increase
  • exponentially, vacancy rates declined sharply
  • and now stabilizing, inventory dropping and rent
  • forecasted to increase. Supply and Demand coming in line.
overall snapshot
Overall Snapshot

Los Angeles = Los Angeles County

New York = Manhattan, Brooklyn, Queens and The Bronx

Miami = Miami-Dade County

Chicago = Illinois component of Chicago MSA

Philadelphia = Philadelphia County

San Francisco = San Francisco County

Population data from US Census Bureau, July 2011

*estimate

bref partner value
BREF Partner Value
  • Underserviced Market
  • Our customer is your customer
    • There are over 27 million small business owners* in the U.S. and they are heavily invested in real estate
    • Ninety-five (95) percent of small business owners own their personal residence per the National Federation of Independent Business, Access to Credit Study in 2008
    • Twenty-two (22) percent have taken out at least one mortgage on their personal residence to finance business activities
    • Thirty-four (34) percent own the commercial property that houses their small business
    • Forty-one (41) percent own investment real estate, excluding their residence and business
    • The majority, fifty-eight (58) percent of those owning investment property, own more than one such property

“In Chicago over the past 12 months 82% of CRE sales transactions were <$1million compared to  53% in LA, 62% in New York and 77% in Miami.”

sources
Sources
  • NAR 2013 CRE Outlook
  • REIS
  • CNNMoney.com
  • Wells Fargo Securities, LLC