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Posts Tagged ‘Washington DC’

REAL WORLD vs. GOVERNMENT NEGOTIATING

Tuesday, December 4th, 2012

Posted by Leonard Steinberg on December 4th, 2012

As the Democrats and Republicans ‘negotiate’ a deal to avert the FISCAL CLIFF, we are again reminded at how very different elected government officials are to the real world. They have the luxury of time I guess? The world around them can crumble, jobs can be lost, productivity can be beaten up, and they still can take their time to make proposals that don’t add up. Neither side has submitted a plan that truly addresses the big picture issues at hand, offers some measure of real compromise, and these plans they have submitted are coming ONE MONTH after the election. What have they been doing for the last 30 days? Did they do ABSOLUTELY NOTHING before the election on this subject?

When compared to a real estate negotiation, any foolish buyer knows that submitting a bid that does not address certain realities of the markets is almost certain to be rejected. It’s simply a waste of time. In fact, a foolish low bid often angers the Seller to a degree that makes them not want to do business with this foolish buyer. In this FISCAL CLIFF negotiation there is only one buyer and one seller, so I guess the ‘seller’ cannot wait for another, better, more realistic buyer to come along. So lets imagine this negotiation is a sale and the sale MUST happen otherwise foreclosure is a certainty and the buyer and his family will be on the streets. How would we negotiate this in the real world? My experience in negotiations, verifiable by numerous self-help books and cheesy seminars on the subject, is to submit a proposal/offer that offers a win-win for both sides. Thats called compromise. Thats what we have to do in the real world.

But our dear government, those elected officials paid for with our tax dollars, do not exist in the ‘real world’……they are different. They can negotiate in fantasy land. And we have to watch in disgust and bewilderment. What would you do if your broker was not performing his or her duties in a professional and rational manner, in a way that represented your needs and wishes? Maybe its time to start firing some of these ineffective, inefficient, self-righteous elected officials to remind them they were hired to do a job. I propose that both Boehner and Obama are impeached if a deal is not reached by December 31st. A little bit of real world reality could go a long way in Washington DC.

NEW YORK CITY: IT’S ONE OF THE ‘FABULOUS FOUR’…..

Sunday, October 31st, 2010

In CRAINS, a report shows how New York City is unlike the rest of the USA, and is truly an international city.

These days, buyers of commercial property in New York can expect their investments to provide similar rates of return as they would in London, Paris and Washington D.C.—cities RCA calls the “Fabulous Four.”

Capitalization rates, the yields investors receive from investing in commercial properties, are more in parity among these four markets than with their respective regions.

Over the past year, yields on prime properties in New York and Washington have averaged a mere 50 basis points, or 0.5%, above those of London and Paris. But they have ranged from 50 to 300 basis points—0.5% to 3.0%—below the average yield in the U.S. as a whole, where prices are significantly lower. Similarly, those in London and Paris have been on average as many as 200 basis points below the average office yield in Western Europe.

One of the main reasons is the strong interest from cross-border buyers, who represent a large share of acquisitions in each of these four cities and help keep prices aligned within these global markets. Foreign buyers account for more than half of office transactions in London and Paris, and a quarter of transactions in New York and Washington.

“A buyer can jump from New York to Paris very quickly,” said Dan Fasulo, head of global research at Real Capital Analytics. “It’s the same buyers, the same debt providers.”

This isn’t a new phenomenon, but it has regained momentum since the recent slump. Mr. Fasulo said that it has been a macroeconomic trend for close to a decade but was put on hold during the global economic downturn in late 2008 and early 2009.

And what does this mean for residential real estate? “When there is money to be made in New York City,” says Leonard Steinberg of Prudential Douglas Elliman and publisher of Luxuryletter, “the wealthy are there. That bodes well for our City.”