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2015

IDR Research Series: 2015 Investment Outlook - Similarly to the past few years, 2014 ended with a slowly improving U.S. economy and a tempered outlook for growth prospects in the future. Real GDP growth only reached 2.2% last year, with forecasts ranging from 2.5%-3.0% per annum over the next five years. Generally speaking, most economists are forecasting steady and modest economic growth in the coming years. Since the recovery began in 2009, employment and consumer balance sheets have rebounded measurably, despite flat wage growth. U.S. unemployment has fallen to 5.6% from 7.0% the prior year and the labor market has been averaging close to 200,000 new jobs each month...

2014

IDR Research Series: 2014 Investment Outlook - U.S. real GDP grew at an annual rate of 4.1% in 3Q 2013 up from 2.5% in the previous quarter and the consensus GDP growth forecast for 2014 is currently 2.8%. In November, unemployment fell to 7.0% and yet again to 6.7% in December, but with disappointing news that employers only hired 74,000 new workers versus the forecasted 179,000. Although “choppy” job growth figures were not uncommon in 2013, the labor force participation rate dropped to a thirty year low of 62.8% adding further uncertainty to the health of the U.S. labor market...

2013

IDR Research Series: 2013 Investment Outlook - Post-election politics remain contentious in the U.S. exemplified by the recent last minute, incomplete resolution to the “Fiscal Cliff.” The debate now shifts to the debt ceiling and spending cuts, which will lead to yet another showdown in February/March, or “Fiscal Cliff Part II,” creating further market uncertainty. The Federal Reserve remains content to keep bond yields at historic lows and recently clarified its benchmarks for future monetary policy actions (unemployment and CPI)...

2012

IDR Research Series: 2012 Investment Outlook - The Federal Reserve Bank, through its “twist” policy, is attempting to spur economic growth by firmly committing to keep interest rates near record lows for the foreseeable future. Yet despite accommodative monetary policies, investor concerns regarding the health of the global economy, now focused largely on the Euro-zone, have brought a significant amount of volatility and investor risk aversion resulting in increased capital flows to “safer” assets...

IDR Research Series: 2012 Mid-Year Update - ‘The more things change, the more they stay the same’ would be an appropriate adage to describe market events in the first half of 2012. While the year began with market optimism and elevated expectations, positive sentiment reversed after a series of weak U.S. job reports amidst heightened European market volatility and signs of a slowdown in China. The Fed’s extension of “Operation Twist” combined with investor flight to safety drove the 10 year Treasury yield under 1.5% for the first time in history...

IDR Research Series: Periods of Rising Interest Rates & Inflation - Since peaking at more than 15% in September 1981, U.S. Treasury bond yields declined fairly steadily for three decades although there have been six periods of rising interest rates since 1978. U.S. treasury yields typically rise during periods of economic growth & expanding employment, which are both catalysts for improving real estate market fundamentals...

2011

IDR Research Series: Are Core Real Estate valuations Too High? - A recent WSJ article (8/17/11) on core real estate suggested that “high prices” being paid for “big-city skyscrapers” is evidence that investors are once again piling into overpriced assets. Although a few sub 5% cap rate transactions on trophy assets in New York and Seattle make for great headlines, they do not accurately reflect where most institutional core real estate portfolios are currently priced based on valuations...

IDR Research Series: Fixed Income Alternatives - Fixed income investments have always been part of a well balanced portfolio. Historically, it has been an attractive asset class for investors seeking to minimize risk of principal loss, earn a reasonable level of income and obtain appreciation with the goal of achieving a return that is equal to or greater than the rate of inflation...

2010

IDR Research Series: 2010 Investment Outlook - The year closed with mixed results among the various investment sectors of commercial real estate. IDR market cycle and pricing analyses suggest we are approaching the bottom of the real estate cycle. Realizing a full real estate recovery is ultimately dependent upon the return of capital markets and the U.S. economy, "green shoots" are appearing in certain investment sectors, asset types and geographic regions...

IDR Research Series: 2010 Mid-Year Update - In our 2010 outlook, IDR identified several key elements necessary for the recovery of the real estate market including: (i) increased availability of debt capital; (ii) improved property fundamentals; and (iii) increased investor capital flows to the asset class. Of major concern was the ability for property owners to extend loans and refinance maturing debt. During the first half of 2010, lenders have been willing to work with borrowers and extend loans...

2009

IDR Research Series: 2009 Investment Outlook - In 2008, the recession, coupled with balance sheet deleveraging, has negatively impacted commercial real estate. Fundamentals have softened and are likely to continue to soften through 2009...

IDR Research Series 2009 Mid-Year Update - As a result of deteriorating credit quality and a slowing economy, traditional lenders have reduced their lending activity. In addition the securitization and conduit lending market remains virtually non-existent. Accordingly, property prices are adjusting downward as debt continues to be revalued...

IDR Research Series: Real Estate Supply - A Source of Stability - IDR research illustrates, over the long term, the value of real estate is closely correlated to the increase in construction costs. However, the relationship between construction costs and real estate appreciation reaches its largest divergence in times of oversupply...

2008

IDR 2008 Investment Outlook - Many will remember the year 2007 in the investment market. Trends like "going global" and "green investing" have grown in interest at the same time that the market continues to re-price the underlying risk level of assets...

Volume 2: IDR Mid-Year Update - Over-levered transactions have started to increase fears regarding vintage year exposure. Some real estate investors have a high degree of exposure to 2006 and 2007 vintage private equity real estate funds who were purchasing real estate assets during a period of time with stronger than normal appreciation...