HFF Research Update for November 10, 2016: A Sense of Calm

Thursday, November 10, 2016

Weekly insights on current research in the commercial real estate industry from HFF Managing Director of Research Jimmy Hinton. View Daily Rates on the HFF website.

In the first full business day following Donald Trump's election to the Presidency, the mood in Qatar reflects a calm temperance. In fact, to a handful of them, there is little surprise, as they invoke the strength of the Leave campaign in June to the surprise of the urban realms within the U.K.

The sense of calm is palpable, with little scurry or scramble to cover currency and interest rate positions in the wake of the election – at least within the investor community we met with. It would appear the perception of the United States as a "store of value" remains unscathed.

Neither cautious nor excited, the investors we met with today represented a wide range of investment capital, but a narrow response to the election. From a family office with nine figures to invest in real estate to a sovereign wealth fund with a few more zeros on its balance sheet, there is a definite sense of serenity.

All this being said, they remain vigilant to market conditions and property fundamentals.

Speaking of the former, we awoke this morning to Asian markets rebounding, taking comfort from American stock market performance on Wednesday.

As President-Elect Trump lands in Washington, D.C., the yield on the 10-year UST has broached the 2.10 percent threshold. It is clear investors are comfortable with a risk-on approach, sacrificing Treasury positions across the maturity curve in favor of equities (but looking at the NASDAQ, maybe not Apple, Google or Facebook).

How much of this Treasury selling has stemmed from the international community Mr. Trump has chastised? In the coming months, we will be watching foreign currency reserves around the globe in an effort to glean an answer.

There will be more to come from Kuwait, Dubai, Bahrain and Abu Dhabi next week.

In the meantime, mind the 10-year UST.

About Jimmy Hinton

Jimmy Hinton serves as Managing Director of HFF, responsible for the firm’s national research efforts. Mr. Hinton works with the executive management team to assist in investor relations and to inform both HFF staff and firm clients with in-depth analysis of economic, property and capital market trends. He is also responsible for providing extensive market reports, client presentations and deal-specific analysis for debt placement and investment sales assignments. Mr. Hinton’s responsibilities include substantial interaction with pension funds, life insurance companies, regional and CMBS lenders, REITs, foreign investors and private equity funds.

During his tenure at HFF, Mr. Hinton has supported the execution of more than 150 commercial real estate transactions totaling more than $4.5 billion in 20 states. Mr. Hinton has experience in fixed- and adjustable-rate debt, mezzanine debt, construction loans and joint venture executions on behalf of clients engaged in the acquisition, development and recapitalization of property types including multi-housing, industrial, office, retail, medical office and storage properties.

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