The Amero – single unified currency for North America ? Nor Yeretsian

Well some of us are still optimistically waiting for NAFTA to happen.

A level playing field for all businesses in Canada – USA – Mexico .

Open borders with free access for products/services and
people flowing back and forth , something like Europe.

When we mature enough here in North America , we may get there.

The things that would have to change  and the new things we would have to learn and re-learn.

With a new currency – like the Amero .
Valuation of everything into the new currency.

The basic principles of valuation would not change, so it would be good to learn and know them.

This would really be the New World, with free and open boarders and a new currency .

We can see why they , the powers that be – may not want all these changes in an election year.

The implications on many levels from taxation , to zoning , to productivity , etc – would be vast.

Brave New World – of efficiency , less governmental regulations  -
larger private sector working and producing with less down time and
red tape…just imagine the possibilities.

How would all this impact real estate ? 

The value of real estate in your city or town ?

How long would it take for us to learn to adapt to the new system , new rules and new taxes ?

Let’s discuss it at  www.yinvestthinktank.com

email :  capitalmoves@gmail.com

Twitter : EnvoyCapRealty

Envoy Capitol Realty Inc., brokerage     Toronto , Canada
Buy/Sell/Lease/Manage/Develop/Syndicate

Blog : www.capitalmoves.blogspot.com

Nor Yeretsian  ( August 11 , 2010 )

The Subprime Solution by Robert J. Shiller

” Real estate is still a market where location counts. ” says Professor Shiller .

As the boom turns to a bust :

” The rate of decline is roughly inversely proportional to the speed of the increase.”

There were also differences across metropolitan areas and within these markets

wherein : ” low-priced homes behave considerably differently through time than

high-priced homes.

The lowest price tier showed the biggest increases during the recent boom, until 2006

and the biggest drop afterward. This phenomenon may be observed in many cities.”

Therefore as an investment strategy you can not treat all real estate even

in one category (residential) in a location the same.

This wonderful book is worth your time and attention.

Twitter : EnvoyCapRealty .

email : capitalmoves@gmail.com

Nor Yeretsian        (  July 27 , 2010 )

Envoy Capitol Realty Inc., brokerage  Toronto, Canada

www.capitalmoves.blogspot.com

Join the discuss and follow the group :

www. Y Invest Think Tank . blogspot . com

Opportunities in the Busted R.E. Economy ? ……… Norair Yeretsian

Big Money is interested again in real estate and they have started buying
with huge discounts off the previous values .
Prices greatly below the previous purchase prices, below the  cost of the
infra-structure paid for sewers/roads and substantially below the
mortgage(s) on these properties.

Where you may ask can an investor/purchaser find these opportunities ?

In the beaten-down markets of Las Vegas and Phoenix.
Where some buyers are getting properties for ten  to twenty cents on the dollar.
Completing the necessary work, and reselling these building lots to builders who
again need these lots to continue their business of building .
As their current inventory of building lots ready to go diminishes.
This is a good news story for real estate in these depressed/ hardest hit areas
of the U.S. real estate market. [ WSJ ]

” Some of the savviest investors [Paulson & Co.] on Wall Street, including some who made
billions on the housing bust, now are snapping up barren plots of land in places like”
: Las Vegas ,Phoenix and California .

Investors are now making a bet that land is undervalued and that it can profit from
reselling lots to home builders.”  The Paulson & Co. is bidding on some 8,000 residential
lots in Arizona,Colorado and Nevada .

Meanwhile in Las Vegas, Angelo,Gordon & Co.” recently paid $35 million for land
parcels zoned for about 2,500 residential lots. That is roughly half the amount the
former owner sank into the property for roads, sewers and other infrastructure alone”.

At the same time says the [WSJ] land investor “SunCal Cos. is working with firms like
D.E. Shaw & Co. to close a dozen land deals in Arizona and California.

Builders including KB Home, Lennar Corp., Ryland Group Inc.,and Meritage Homes
Corp. are cautiously buying prime parcels in preparation for ramping up construction”.

Deep pocketed investors are buying large portfolios of land from banks, bankruptcy courts
and auctions run by Federal Deposit Insurance Corp with hopes of selling them to eager builders.

” The renewed interest in land has led to increases in land prices. In the first quarter,
the average price paid per acre in the U.S. rose to $ 41,651 from $36,829 in 2009 according
to real estate services firm CoStar Group. But that figure still paled in  comparison to the level
seen in 2007, when the average price per acre was $102,631 .

Some private equity firms already have reaped big profits in land deals.

For example: SunCal and D.E.Shaw bought 1700 lots in Las Vegas for
about $16,400 a lot.
Within eight months after the acquisition, the venture sold the land to
builders including KB Home, Lennar and Ryland for between
$35,000 to $ 40,000 a lot. ” [WSJ]

The above are examples from the U.S. market place , real estate is local.
The Canadian experience is much different, City by City.
Canadian real estate did not in most markets experience anything near the U.S experience.

Our systems, financing ( liquidity and credit/ lending practices ) are simply different
and so much less volatility is experienced in the Canadian real estate economy .
Not to mention tax system and stimulus packages less attractive than the U.S.

American news maybe more interesting and entertaining, but their
investment strategies do not easily overlap in Canada.

Land investments are the most speculative and most risky .
Win big and lose big, be careful.

Do your research and use a licensed/insured /knowledgeable professional .

Let’s discuss it , leave a comment….Is it the time to buy ?

Also on Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com    July 2, 2010

Where’s the money? Show me the Money ! Norair Yeretsian

Analysts turned gloomier about the outlook for U.S. home prices as
sales slump and home re-sales declined in May .[WSJ-6/23/2010]

The classical way to turn this around would have been lower interest rates
and increase available money for mortgage lending purposes.

However the  weak real estate market in the US also has another problem.

Lenders not lending to potential borrows ( who may qualify ) to
purchase the real estate because they don’t want the exposure to real estate risk.

Has the pendulum swung the other way now, where lenders are being conservative
and tight on lending money for real estate ?

Are the Banks paving the way for a Double Dip Recession and a further crashing in real estate ?

In one of my class this week a student spoke about the difficulty his son and
daughter in law were having trying to obtain a mortgage to purchase a house
in the US because they felt the timing was right for them to do so.

They are both  employed at reasonably good jobs with income(s) and a down-payment.
Yet they were having great difficulty finding a willing lender.

In an article by Ben Tripp on the Huffingtonpost.com , Ben posted his story and titled :

The Real Estate Plague Nobody is Talking About .
Ben describes his family’s challenge and difficulty in trying to get a mortgage
to purchase their  house — without success .

He wonders how America can come out of this Housing Crisis if no one is lending the
money to finance the purchase.

“If it’s this difficult for qualified buyers to get into a house.
I don’t see real estate making a comeback any time soon – and if the banks want another
bailout, they can send the request care of current resident . ”

He has been told ” this situation is epidemic.
Vast numbers of highly qualified buyers can’t get into houses, because the banks
don’t want to lend.”We were told that crisis had passed, but it hasn’t… the  American
economy runs on consumer spending,
and the queen of all consumer expenditures is a house in the suburbs.”

So the U.S. went from everybody and anybody get a home loan to nobody,
even if you qualify get a home loan.

Wow, sounds like the major leaking financial crisis has been capped ,
but this could make the problem a lot worse for America’s real estate.

Leave a comment or two, you can also Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com     June 28, 2010

Austerity Now ! Norair Yeretsian

Well the Bank of  Canada, decided to slowly start to raise rates
this may be a signal from the Bank that lends to the Banks
that money will cost more, in what appears a recovering economy.
The real professionalism will come out much later, when we shall
see if a more balanced growth environment is created and we are
not killing off any chance our businesses have to recover and correct
their position(s)  and growth prospects and start to re-hire  .

With rising interest rates, residential real estate’s rising valuation slows
and  declines historically speaking. This is not good news for real estate.

Just in time of course as the new harmonized tax :  HST comes into play

July 1, 2010 in Ontario,Canada and causes its anxiety among consumers.

This will affect all commercial real estate lease agreements and payments.
As we prepare a memo to all our tenants in our industrial/retail and office
buildings which says they must add an additional 8% to their current rent
to address the new HST ( 13% on top of the combined : minimum plus additional rents )
[ commercial tenants are currently paying 5% GST which will end at 11:59 June 30/2010].

This is a new tax for commercial real estate to incorporate into its system and deal with
at the end it does not matter , however in the short-term it will require an education.

For small start-up companies or individuals — it will be one more thing to worry about.

One more thing to be responsible for, however if you were involved with consumers
you as a business are already collecting this amount and it will now work out more in
your favor .As it is to run like the GST with input and output credits and the like.

Is there any time a better time to change / add new taxes ?
Is the economy in a condition to deal with it ?

We shall should find out.

Consumers are already uncertain about spending ( lower confidence) and
according to records are de-leveraging.

It is the summer months ( July and August) to test run it, before the last quarter .

If consumers cut back too much , we will loss more commercial tenants.
And everyone gets less revenue : private and public .

What is on the horizon as a counter balance to help push consumers to
spend and help the economy and businesses to invest and expand their operations.
Invest in research and development and push innovation — new products and services
or just better of both.
There is a sense of a pending federal election on the horizon – this wouldn’t help .
It will help pollster and advertising agencies involved with the political parties ,
but what about the rest of us ?

The City of Toronto does have an election coming up in the Fall 2010 and a new mayor to be elected
with hopefully a better fiscal management and just better management.

Save your money, because things are uncertain and there are price increases coming
and maybe tax increases coming — this may be the new normal economy and lifestyle .

An austerity life style for all ?

Let’s discuss your opinion on this with your comment below  or

on Twitter at  :  EnvoyCapRealty

nyeretsian@yahoo.com June 22, 2010

Is this the New Normal or Double Dip coming? Norair Yeretsian

Mr. Mohamed El-Erian (PIMCO, CEO: over sees more than $ 1 trillion of assets )
said we need only look to the key indicators to understand
where we are and what is happening in our economy and here is the short list ( below ).

This is the new normal economy get use to it . Things will move slower, on employment front.

Employment :  rather unemployment , well at least it is not increasing — its steady .

Consumer Spending : consumers are cautiously spending and not taking on any new debt.

They are starting to work on reducing debts.  Household’s de-leveraging – working on reducing of debt .

Government spending : Government is increasing spending and taking on more debt .

Government is increasing leveraging ,  increasing debt . This is not going to help in the long run.

Business :  Small businesses can’t borrow to spend and grow .
Big corporations have the credit ( and lines of credit ) but  not borrowing and
using their cash to buy back stock.
Not expanding , investing in new plant and equipment to grow.
This is not good for the long-term.

Housing starts : steady , stabilizing , getting better .

Demographics : the population, increasing / decreasing — aging .
The new tax base and the pension(s) – health care, more things to worry about.

The economist Nouriel Roubini described things and generally things are not good
in the economy and government does not appear to be doing anything right at this point
- this is a major concern and will affect all our lifestyles  in America.
With the future only having increasing taxes and possibly cuts to spending in many areas.

There is good liquidity in the economy, Government printing lots of money .

The U.S. economy is still the best on the planet, however  Asia will be coming up .

Roubini is concerned we may be heading for another Dip as the stimulus money
runs out and few to no other measures available for more stimulus.

El-Erian believes we are not heading towards a Dip again, however we
should not expect the economy to perform as it has/ had in the past.

It is always good to have at least two views on where we are and where we may be heading
think about your local economy and the status of its health :
where you are and where you might be heading.
The Key indicators and plus the Demographics of your location should give
you a better understanding of what is happening at the Micro level.

What is happening with the supply of re-sale housing , listings to sales
how many weeks / months supply is there at current demand ?

Most of my colleagues complaint of  lack of inventory ( good salable listings).

What’s the employment statistics in your area of the country .
Does the national average – really matter to you / your area’s economic health ?

If interest rates move, how will that effect the supply – demand dynamics in your area?

Will the interest rate movement effect affordability to the extent that
prices/valuation will be impacted in your location.

One of these factors ( variables) a lone, will give us the answer we are seeking -
- but the mix of these variables at the right time will lead us in the direction we end up.

What happens at the Macro level ( the nation) is more challenging to understand
immediately and we see the data historically ( end of quarter / half/ year ).

Mohammad El-Erian and Nouriel Roubini  [ Crisis Economics , new book ] on CNBC discussion June 15/2010

( The Realist and The New Normal )

Mirco -data ( and what it says ) and Marco ( what actually happens ).

What about innovations by individuals and companies ?
What about alternative energy sources development and implementation into our economy?
What about new discoveries  , that are game changers for the economy ?

What is happening in your area of the economy or country that is raising hope
for a new dynamic economy where new types of  jobs are be created and
new demands for housing are being driven?

Let’s discuss it below with your  comments / or on Twitter EnvoyCapRealty .

nyeretsian@yahoo.com    June 20, 2010

Even Professionals Learn Valuable Lesson, Norair Yeretsian

G.E. Capital was struggling with its huge commercial real estate
portfolio of approximately $80 billion.

GE Capital is planning to reduce this by about half to $40 billion.

” It was just the toughest market I’ve seen in my lifetime. ” said GE Capital’s
chairman and CEO Mike Neal. Coming through the economic crisis,
GE Capital will be” smaller and stronger with a goal on returning to profitability.”

The goal is to make its real estate portfolio about 10% of its overall assets.

The company will be exiting commercial properties as it can.

On commercial real estate market conditions,  overall
” we are largely through the free fall , better days are ahead.”
said Mike Neal.

In addition to cutting back on real estate assets, the portfolio is
also likely to shift to more debt holdings than equity.
And that the company’s goal is to transition to more of an
asset management platform, according to Neal.

” When you talk about what we learned, Neal said,
“one is that with small operations at a distance you can’t earn very much.”

This advice was given many years ago by a master builder and founder of
Tridel Corporation Jack Del Zotto,’ try to buy properties that are within a
day’s drive of your home — you will be able to manage them and
you will make more money ‘.

Sage advice, as Pension Funds and other large entities are searching the planet
to invest the billions of dollars intrusted to them and believe they must diversify
it all over the world to better protect the capital for their stakeholders / investors/ pensioners .

I have a feeling they too will learn this simple lesson years from now.
However it will not be at their expense.

Keep your investments close to you. So that you can see them everyday, as need be.

Let’s continue the discussion and comments below or at Twitter @ EnvoyCapRealty.

Costar was source of material information, June 14/2010 .

nyeretsian@yahoo.com     June 15, 2010

Is This The Bottom, A double Dip Recession ? Norair Yeretsian

Chairman Steve Roth,  Vornado Realty Trust ( the REIT)(VNO) said
New York and Washington D.C. is the best real estate.

However in New York City real estate’s Net Effective Rent were down 40% and
vacancy is sitting at 11%.

Is this the Bottom? Motley Fool says : Who Cares?!, concluding
the experts do not have a good record of being Right. (May 30/10).

” We are at the bottom, but occupancy is rising and pricing is at 2007 levels.”

Mr. Roth believes , and “the world is awash in capital.” (CNBC, June 9/10)
ready to move into opportunities as they arise.

“The safest investments in real estate are in New York and Washington D.C. ,
however current rents don’t justify the prices being asked and being paid .”

According to The Wall Street Journal :

In a letter to investors in March, Mr. Roth predicted that the commercial-property
sellers eventually will flood the market as prices rise. “ Assets will soon trade a
plenty ( just look at the volumes flooding into special servicing).” he wrote.

Special servicing is a hot business because of the rising default rate of commercial
mortgages that were packaged into securities to feed Wall Street’s deal-making
machine and investor appetites.

According to Fitch Ratings ; more than 11% of  $ 536 billion of loans packaged
into commercial mortgage- backed securities are expected to be at least 60 days
past due by year’s end.

The late-payment rate now is about 8% , but property owners are defaulting
as rents and occupancy levels decline. Borrowers also are unable to refinance
their debt when it comes due because of the tightened credit supply.

In 1997 , Vornado got a foothold in the Manhattan office market by buying stakes
in seven office buildings for $700 million. Vorando also owns a stake in retailer
Toys R  Us Inc., which is slated to go public later this year.

Like other real estate investors, Vornado bought more assets than it sold when
the market was frothy. ” Our acquisition volume has been 10 times our
dispositions — a numerical mismatch and probably a mistake”
Mr. Roth wrote in his shareholder letter.
( The Wall Street Journal , June 9,2010)

Let’s discuss and talk about your views on the market : below or Twitter @

ThinkInvest or  EnvoyCapRealty

nyeretsian@yahoo.com   June 10,2010

Blue Horizons with a little white mist ………… Norair Yeretsian

There are many reasons to be hopeful and optimistic
in this time of uncertainty and market jitters.
It is usually times like these that the bold and the brave go out
and invest and create opportunities for themselves.

The Pearl : Toronto, Ontario is in a unique place in this interest time.
People are coming here. People are investing here.
Based on Demographics and the increasing numbers of the population
in this area of North America.
The economies of scale are being achieved to support and
fundamentally under pin values and price justification.

Demand is being created by the increasingly new net immigration in to the GTA.

Forecast is that this will continue for some time to come.

The Creative people live here and creative industries and job creation will follow.

Despite what government(s) may do and are doing, with inefficiencies and
overspending, over taxing at the City of Toronto level,
and not investing in infrastructure and renewal of infrastructures.
Over taxing to cover budget shortfalls self created by incompetent spending
by the City of Toronto, in almost all areas from computer leasing
( budget was $ 40 million, spent $ 80 million plus another $20 million spent
for an inquiry that went nowhere and no one went to jail .
And city staff end up with old computer equipment and technology
to work with to serve our City and its loyal citizens  – shame . )
The St. Clair streetcar construction nightmare and costs doubled again the budget numbers and
destroyed a beautiful street by putting up a concert curb. in the middle of the street,
causing a distortion to street life + business and traffic chaos for years to come.
Bloor Steet is suffering the same fate by the  City contractors under
the leadership of  Mayor Miller , seem to be hard at work trying to destroy .
But despite this  either impotence or incompetence by the guys running the City,
the population keeps moving forward and will over come these minor
setbacks  in the grand scheme of things.
There is hope, there are elections coming — please vote for competent leadership
and good managers for our City and then we : Toronto will be unstoppable as
we head towards a prosperous future.

Yes we have challenges on all fronts, at the City level .
The provincial level with the new HST (13%, on purchases and commercial leases)
coming in July 1, 2010. (21 days and counting) and major issues with Healthcare.
The Bank of Canada, feeling the need to raise interest rates
(because things are better here then anywhere else on the planet currently)
and commercial lending being tight.

Regardless of  these issues, things are generally good and getting better.

But wait a minute, new housing starts fall in May the headline reads…

Yes, yes… with every blue horizon there is the occasional white mist of a cloud.

And yes the economy in housing, in real estate goes through a natural up and
down rhythm it is expected and it is healthy for the market place.

What do you think? Where are we going ?
Should we be raising interest rates, now ?

Let’s discuss it , leave a comment below or Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com             June 9 , 2010

Inflation Where and When ??? Norair Yeretsian

The Barenaked Ladies sang (1991) ;

” If I had a million dollars, I would buy you house. “
( real estate first on the list).

Now there’s a singer Travie McCoy  on the radio,
song’s titled  Billionaire (2010);
” I wanna be  a billionaire so fricking bad,
buy all of the things I never had ….

Now that’s inflation, 1991 millionaire to billionaire 2010 .

Inflation, inflated prices for things seem to have a steady march
upward and onward. Its the little things that have caught my eye,
when everyone around me suggests there is none.
I see it everywhere creeping in / on to investments and eroding values.

Property Taxes over the passed eight years have gone up, but
industrial net rents have been flat, no increase not even for inflation.
Water rates have increased over the passed six years at a rate of at
least 8 to 10% a year compounded here in Toronto.

Government(s) cause inflation for all of us , in every sector.
Then they raise interest rates to reign in this inflation and hurt the rest
of us who borrow to work, borrow to invest and borrow to create
businesses and employ people.

This inflation simply is the  erosion of money you may have saved ,
sitting in the bank and your purchasing power.

It costs more for everything.

They keep us all dancing, as they call the tune.

Can you predict inflation, yes you can expect inflation.
You can expect higher inflation when governments print money
to keep the system liquid. This is a good thing, you want the system
to remain liquid and working for all of us.

Inflation and the range of inflation, is one of the variables you will
need to worry about as you consider the desired yield from
your investment and the Risk adjustment(s) you will be incorporating
into your forecast / pro formas.

One other variable that you need to worry about is the future range of
the cost of capital, interest rates being the biggest component .

This again is not something you can control, but you can
anticipate the trends and be prepared for it.
And keep a reserve to deal with this risk variable so that you can
address it as it arises.

Be prepared, its a good motto.

Be informed and educated , so that you can be prepared
to deal with the Risk(s).

Let discuss the challenges and risks you can expect as you move
forward with real estate investing.
Leave a comment below or on
Twitter @ EnvoyCapRealty

nyeretsian@yahoo.com            June 7, 2010