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Commercial Department: From the Editor: February 2008


From the Editor

Yes, every year begins with uncertainty. And as we enter 2008’s second month, commercial brokers should gain a better understanding of which markets are set to roll and which are raising red flags.

Hot on the heels of President Bush signing bills extending the Terrorism Risk Insurance Act for seven years — and increasing high-cost factors for Federal Housing Administration multifamily-loan limits — comes the Mortgage Bankers Association’s (MBA) Commercial Real Estate Finance (CREF)/Multifamily Housing Convention and Expo.

As one of the year’s first large-scale mortgage-industry events, CREF likely will be abuzz with handshaking, deal-making and chin-scratching. Will the multifamily sector see bleed-over from the nonprime crunch? Or will status quo reign?

According to Reis Inc., multifamily rents have increased steadily since 2004, while multifamily-vacancy rates have hovered just below 6 percent since early 2005.

“Getting the word out that the fundamentals remain solid — and that there is not any kind of consistent break in the value stream of real estate at this point — is a great way to shore up the fact that this is not a market crisis,” said Jan Sternin, MBA’s vice president of commercial, multifamily, to Scotsman Guide’s Melinda Young in late 2007.

Regional markets — especially those in “sand states,” such as Arizona and Florida — likely will continue to be problematic, Sternin said. But as she adds in our Q&A , multifamily lending and investment could see some bounce-back by the end of the year. And deals sealed at CREF could be their catalyst.


Tony Stasiek was an editor at Scotsman Guide. For questions on this article, call (800) 297-6061 or e-mail

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