PSU Center for Real Estate Quarterly May 2010

113 pages is a lot of reading for a beautiful Friday afternoon so Dr. Mildner, the director of the PSU Center for Real Estate, gave permission to cut and paste his  outline:

I would like to announce the May, 2010 issue of the Center for Real Estate Quarterly, produced with assistance of the Oregon Association of Realtors. You can find the latest issue at the following website: http://www.pdx.edu/realestate/research_quarterly.html

From that web page, you can download each individual article or the entire 113-page issue. We have also indexed all the articles in The Quarterly back to 2007 for easier access.

Our feature article highlights the work of Leanne Lachman of Lachman & Associates in New York, who was the keynote speaker at the Center’s 5th Annual Conference on May 5th. You can find a copy of her Power Point presentation at the following website:  http://www.pdx.edu/realestate/EmployeerEvents

In her talk and article, Ms. Lachman discusses the how demographic trends in the United States and Asia will influence the prospects for the real estate industry. She reports that immigration is an important positive trend for the real estate industry, and that the Baby Boom generation is now outnumbered by the Y Generation, leading to new opportunities for multi-family housing, hospitality, and retail.

Also in this issue, you can find a reprint of my presentation at the Center’s symposium on real estate development and urban schools that we hosted on April 13th. In the talk, I discuss strategies for overcrowded suburban school districts as well as mixed use development strategies for schools in downtowns and edge cities.

Also in this issue:

Real estate student Atha Mansoory outlines some of the advantages of market rate and limited equity cooperative forms of ownership for housing development over traditional condominium developments.

Attorney Eugene Grant of Davis Wright Tremaine offers a history of the KOIN Center and explains why the California Public Employee Retirement System essentially walked away from that property in 2009.

Former PSU student Caroline Uittenbroeck and Professor Will Macht describe how developers in the Netherlands have converted surplus shipping containers into attractive, affordable student housing.

PSU urban planning and real estate student April Chastain, describes the economics of operating mobile food carts and why they have become vital part of the retail fast food scene in Portland.

In our commercial market report, RMLS Student Fellow Kyle Smith finds positive net absorption of office space in the first quarter since 2008, hinting at the potential for economic recovery. However, vacancy rates remain high, rising from 16.1% to 16.7% in our survey, suggesting we need more vigorous job growth for new office development to happen.

In his retail report, Smith reports continued weakness in the retail sector, with vacancy rates reaching 8.0% and essentially no new construction. Some landlords have responded by signing short-term leases and connecting with so-called “pop-up” retailers, but the retail market continues to be a tenant’s market.

And in the industrial report, Smith also finds negative net absorption and continued high levels of vacancy in the Portland area, particularly in the Sunset corridor. At the same time, he reports that the national indicators of industrial activity have been positive for the past eight months, suggesting that Portland is lagging the national economy.

In the Portland area apartment market report, OAR student fellow Scott Aster finds that rents have increased and vacancy rates have fallen for apartments in the last year. Aster reports that large numbers of potential renters are doubling up, suggesting that apartment markets could be even brighter if employment pick up.

In our single family housing report, Aster finds that housing prices in the Portland region continued to decline in the last quarter, with the year-on-year decline in prices reaching -3.9%, one of the steepest declines in the US. Outside of Portland, Aster finds price declines in all the major markets: Vancouver, -4.7% Salem, -5.3%, Eugene, -5.3%, and Bend, -14.0%.

With rising foreclosure rates and low interest rates, the homeownership market has become a buyer’s market. The average home sold now requires almost 90 days on market, with sellers reducing their prices to 90% of original listing price. Those reductions appear to be motivating buyers.

Portland, Vancouver and Bend have seen a spurt of home sales, suggesting that the price declines of the past two years have revived buyer demand.

Finally, in his concluding column as editor of the Quarterly, Professor Will Macht discusses the themes that have been highlighted in his three-year tenure with The Quarterly. Professor Macht will continue to teach in our graduate and undergraduate real estate programs, and we appreciate the insights and high standards that he has brought to this publication.

I hope you enjoy this latest issue of the Center for Real Estate Quarterly. I would like to thank the Oregon Association of Realtors

(OAR) for their continued support of the Center and its publication of The Quarterly. As usual, we welcome your feedback on the articles as well as your suggestions for future articles.


Gerry Mildner

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