Steve Traub, ASA

What's In and What's Out for '96?

WITH A NEW YEAR before us, as is the tradition at Property Valuation Monitor ^SM, for a third consecutive year we bring you: "What's in and What's Out (in the World of Real Estate)".

For most types of real estate, single digit vacancy rates are in; double digit rates are out. Double digit commercial mortgage rates, however, are out, while single digit mortgage rates are in. Speaking of commercial mortgage rates, floating and one-year rate "lock-ins" are out, while five, seven, and ten year mortgage rate "lock-ins" are in. Why? Because steep mortgage yield curves are out, while flat yield curves are in. And, although nationally, for REITs, buying real estate continues to be in, for the Japanese, however, only selling large chunks of U.S. real estate continues to be in.

Speaking of large chunks of real estate, Boston Garden is out, but FleetCenter is in. Come to think of it, similarly, Dominique Wilkens and Chris Ford both are out, while Todd Day and M.L. Carr both are in. And, of course, OJ (who?) is no longer in: the jury let him out, although they weren't out (for very long). But, for everyone remotely connected to the saga, book deals are in.

In New England, Shawmut Bank is out, Fleet Bank is in. In NH, Cornerstone (in name at least) is on the way out, as BayBank moves in. Citizen's Bank also appears to be moving in, and at the moment it looks like Citizen's is trying to take First NH Bank out.

On the insurance company scene, Connecticut Mutual as a separate entity is out, but at Mass Mutual, it will find itself in. At Prudential, the Prudential Realty Group in Washington, Dallas, Houston, and Boston also is out

On the technology scene, Jim Manzi, president of Lotus, is out, so IBM made a "Note" to send someone else in. Windows 95 (no pane, no gain) finally came out. Now, computers with only two, four and six meg of RAM are on the way out, unless we put eight, 12, and 16 meg of RAM in. Also, the real estate appraisers' masonite clipboard is out, but the appraisers' PC notebook is on its way in. Unfortunately, if you do buy a computer today that's in, within a month or two, it's guaranteed to be out.

Postal mail continues to be out, while e-mail is in. Fortunately, there have been no reports of e-mail workers shooting and taking their bosses or co-workers out.

Commuting by car is out, while commuting by phone and modem is in. Build-to-suit is in, but developing speculative real estate sites (except in rare cases) remains out -- though developing speculative Web sites is in (so far in, in fact, it soon might be out).

On the shopping center scene, buying existing shopping malls appears to be in, but designing and building new shopping malls are out, except for designing and building new virtual "cybermalls" of course are in. So, at the moment, street addresses are out, and URL Web addresses and e-mail addresses are in.

And of course, if you need commercial or industrial appraisal work performed -- we are always in. Give us a call, "that's what we're here for." Give us a call at 978-462-4347. Your initial consultation is free.

Happy New Year!

Sincerely,

Stephen Traub, ASA
Publisher, PVM ^SM

The author, Stephen Traub, ASA, is Chief Commercial Appraiser for Property Valuation Advisors, Newburyport, MA. He is a certified general appraiser in NH, ME and MA. He can be reached at (508) 462-4347 or:
by e-mail: straub@shore.net

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