Tuesday, March 20, 2007

The Point...

To join my bookmarked i-banking blogs, write a bit about the current [insane] real estate capital markets, and hopefully blow off some steam.

I work at a real estate i-bank in New York, a mid-level guy trying to get my other foot out of the trenches. At our firm, intensity is the name of the game. Verbal assaults and rulers slapping the tops of hands is the norm. Doors slamming, papers ripping, blood-curdling screaming... that type of thing. The typical New York investment banking company. But real estate.

2007 is the year of the three-cap in New York, with Harry Macklowe hitting lead-off as the flippee in the EOP/Blackstone NY portfolio, and more to come, as a historic, highly-prominent, "jewel" of an office building in Midtown is quietly-rumored to be trading in the next week.

Last year, we saw cap rate in Manhattan drop to the "fours" in typical deals, with anything in the fives considered a bargain. Nationwide, trophies trading in the sixes were viewed as virtual steals (see: San Diego). So the obvious questions are what's next, and at what point does it stop (or even slow)?

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