Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Fri, May 8 1992 Date: Fri, 8 May 92 05:31:37 EDT Message-ID: 05-08 0000 DECISIONLINE: Real Estate USA TODAY Update May 8-10, 1992 Source: USA TODAY:Gannett National Information Network OFFICE GLUT QUESTIONED: The glut of commercial office space is not as bad as some recent studies have shown, say Ray Torto and Bill Wheaton, owners of CB Commercial:Torto Wheaton, a Cambridge, Mass.-based research firm. Some analysts say it will take a decade or more to fill the nation's existing supply of empty office buildings - not even counting new space entering the market during that time. (For more, see special Glut package.) RIOTS DISRUPT MORTGAGE PAYMENTS: The Federal Home Loan Mortgage Corporation said Thursday it will offer help to homeowners unable to make mortgage payments because of the civil disturbances in Los Angeles and other cities. Freddie Mac is asking its mortgage lenders to grant temporary indulgence - up to three months - or forbearance - up to 18 months - to those suffering a loss of income stemming from the riots. TREASURY COMPLETES AUCTION: Yields on 30-year Treasury bonds rose to the highest level since November as the Treasury concluded its $36 billion auction to pay government debt and maturing securities. The average yield was 8% up from 7.91% at the last auction Feb. 13. A total of $10 billion in bonds was sold out of bids totaling $24.9 billion. GREENSPAN SILENT ON RATE CUTS: Federal Reserve Chairman Alan Greenspan says there's room for the economy to grow faster in coming quarters but gave little hint of the Fed's position on further interest rate cuts. Greenspan, speaking at a banking conference, says growth has been slowed by the need to cut huge consumer and business debt. Things are better, but the economy is not near back to normal, Greenspan says. RTC TO HOLD HIGH-TECH AUCTION: At a Resolution Trust Corp. auction Tuesday in San Antonio, investors from more than 70 countries will be able to follow the action on Telerate, a global financial-information network operated by Dow Jones. The investors will be able to submit bids by phone. Both live and phoned bids will be shown on Telerate. If successful, says an RTC official, it would be used at other auctions. IBM ANNOUNCES PARTNERSHIP: IBM and Grubb & Ellis Company, San Francisco, announced Thursday a business venture to provide property management and corporate facilities management, engineering, maintenance and other related building management services to IBM and third parties. Grubb & Ellis currently provides vended services to IBM. FIXED-RATE MORTGAGES STABLE: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 8.84% Thursday, unchanged from Wednesday but down from 8.85% the week before. They were at 9.47% a year ago. For 30-year adjustable-rate mortgages, the rates were 6.10%, unchanged from Wednesday but down from 6.13% the week before. A year ago they were at 7.23%. ARM INDEXES UNCHANGED: The one-year Treasury ARM index rates were listed at 4.34% Thursday, unchanged from Wednesday but up from 4.32% the week before. A year ago they were at 6.11%. For the 11th District ARM index, rates were at 5.611%, unchanged from Wednesday but down from 5.800% the week before. A year ago they were at 7.654%. T-BONDS UNMOVED: Treasury security rates for the 30-year bonds remained stable Thursday, listing at 7.96%. That's unchanged from Wednesday but down 0.07 from 8.06% the week before. A year ago T-bonds were at 8.22%. SPECIAL PACKAGE ON GLUT: FORECASTS MAY BE FLAWED: It might take nearly 12 years to bring the commercial office market back into balance, say David Shulman, a real-estate expert with Salomon Brothers. But these forecasts are flawed, say Torto and Wheaton. They don't take into account that 10% or more of office space, according to Torto and Wheaton, is always vacant, making the market look smaller than it really is. DEMAND MAY INCREASE: The forecasters also assume the demand for commercial office space will remain deeply depressed in the future. Shulman, for example, predicts absorption will average about 37 million square feet a year for the next decade. Torto and Wheaton think an economic recovery will push demand at least back to its 1990 level of 68 million square feet per year. REBOUND IN MARKET FORESEEN: If the modified forecasts of Torto and Wheaton are right, the glut in commercial office space could be absorbed in only three and a half years. Accordingly, Torto and Wheaton foresee a rebound in office rents and property values starting in 1994. (End of package.) Real Estate Editor: Christopher Goldthwaite. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM