Top 10 Investor Questions For 2013: Global Real Estate

Top 10 Investor Questions For 2013: Global Real Estate
05-Dec-2012

How does the prospect of a slow U.S. economic recovery affect Standard & Poor's Ratings Services' views on the credit quality of REITs and homebuilders in this market?How does Standard & Poor's account for divergent economic trends in its financial performance forecasts for real estate companies in the Asia-Pacific region? What implications does the prevailing weak macroeconomic environment in Europe have for real estate ratings? What are Standard & Poor's views on the funding outlook for the U.S. real estate sector? What are the most notable debt capital market developments for real estate in the Asia-Pacific region? What are funding conditions like for real estate in Europe? What is your credit outlook for the main property sectors in the U.S.? What is your credit outlook for the main property sectors in Asia-Pacific? What is your credit outlook for Europe's retail and office property sectors?What are the likely prospects for M&A activity in the real estate sector across the three major regions? The global real estate sector is set to finish the year 2012 on a cautiously positive note. Capital real estate values have broadly remained stable, rated real estate investment trusts (REITs) are on track in terms of leasing activity, and most rated developers are seeing improved profitability. The funding environment for rated real estate has improved significantly since 2010-2011, and investor appetite for real estate debt is growing. We're also seeing real estate companies shift toward debt issuance and nonbank funding rather than bank debt--a trend that we believe will continue into 2013. We believe credit quality among our rated portfolio of real estate companies should remain stable into 2013. This is because our base-case operating scenarios for rated estate companies balance macroeconomic headwinds with firms' well-diversified, high quality portfolios.

S&P: Top 10 Investor Questions For 2013: Global Real Estate

S&P: U.S. Real Estate: Stable, But Susceptible To Economic Shock

U.S. Real Estate: Stable, But Susceptible To Economic Shock (00:06:50 min)

Although Standard & Poor’s believes that the U.S. residential and commercial real estate sectors have bottomed out, companies will remain vulnerable to economic shocks--especially homebuilders. Real estate investment trusts (REITs) are well-positioned, but growth in the sector will be muted. In this CreditMatters TV segment, Managing Director Lisa Sarajian looks at the trends shaping both sectors. Topics include single-family home sales and starts trends, and REIT earnings performance.

S&P: Standard & Poor's Soon-To-Be Released Bank Ratings Criteria: Update And Related Rollout Plans

Standard & Poor's Soon-To-Be Released Bank Ratings Criteria: Update And Related Rollout Plans (00:07:57 min)

In this CreditMatters TV segment, Standard & Poor's Managing Directors Jay Dhru and Vandana Sharma discuss our views on the banking sector and how our soon-to-be released updated criteria will offer a robust framework for rating banks. And Managing Director Hans Wright provides an in-depth overview of our rollout plans for the criteria.

S&P: What Constitutes A Sovereign Default For Standard & Poor's?

What Constitutes A Sovereign Default For Standard & Poor's? (00:10:29 min)

In this CreditMatters TV segment, Standard & Poor's Criteria Officer Alexandra Dimitrijevic discusses the characteristics that could constitute a sovereign default for Standard & Poor's, following the recent public attention to Greece's debt reprofiling. Besides missing a debt payment, Standard & Poor's could also consider some 'distressed' exchange offers or similar debt restructuring as equivalent to a default, if they meet certain characteristics.

S&P: What's Behind The Recent Rating Actions On The Five Largest French Banks?

What's Behind The Recent Rating Actions On The Five Largest French Banks? (00:06:48 min)

In light of more challenging economic and funding market conditions, Standard & Poor's Ratings Services took various rating actions on the five largest banks in France. Additionally, Standard & Poor's has also revised the Banking Industry Country Risk Assessment (BICRA) on France to Group 2 from the lower-risk Group 1. In this CreditMatters TV segment, Elisabeth Grandin, one of our senior analysts for European Banks, discusses the report related to these rating actions, which was published Oct. 14, 2011.

S&P: Shedding Light On The Global Power Industry

Shedding Light On The Global Power Industry (00:09:51 min)

Low natural gas prices and weak power demand have driven down electricity prices, stressing ratings on generators at a time when environmental compliance costs continue to rise. Utilities in rate-regulated markets to a large extent have maintained credit quality as regulators have generally allowed cost pass-through for everything from smokestack scrubbers to nuclear plant upgrades. In this CreditMatters TV segment, Lead Analytical Managers Steve Dreyer (Utilities & Infrastructure, U.S.), Peter Tuving (Utilities & Infrastructure, Europe/Middle East/Africa), and Andrew Palmer (Utilities & Infrastructure, Asia-Pacific) examine the trends shaping the global power industry. Topics include the impact of Europe’s struggling economies on utility ratings and how the Fukushima earthquake and Tokyo Electric Power have affected Asia-Pacific's utility sector.

Fortune: American Idiots: How Washington is destroying the economy

American Idiots: How Washington is destroying the economy
By Allan Sloan, senior editor-at-large August 18, 2011: 5:00 AM ET

What's ailing us? It's not just unemployment. It's not just Europe's debt woes. And, no, it's not Wall Street this time. It's the takeover of the economic debate by fanatics who are up to no good. Fix that -- and maybe you fix the economy.

S&P: How The U.S. Sovereign Downgrade Affects Municipal Housing

How The U.S. Sovereign Downgrade Affects Municipal Housing (00:03:34 min)

After downgrading the U.S. to ‘AA+’ from ‘AAA’ on Aug. 5, 2011, Standard & Poor's lowered its ratings on many U.S. companies and government-sponsored entities with financial ties to the sovereign.

S&P: U.S. Consumer Defaults Fall In March. Existing Home Sales Rise

U.S. Consumer Defaults Fall In March. Existing Home Sales Rise (00:18:36 min)

The Standard & Poor's/Experian consumer default composite index fell to 2.43% in March from 2.54% in February. All the major sectors, such as bank cards, auto loans, and first and second mortgages, reported declines. As for U.S. housing, sales of existing homes increased 3.7% in March following a significant decline of 8.9% February. In this podcast, Standard & Poor's Senior Director Erkan Erturk discusses the significance of these statistics and how they could affect the structured finance and housing sectors.

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S&P: Why Italian Banks Face A Tricky Recovery

Why Italian Banks Face A Tricky Recovery (00:15:32 min)

Italy's banks are slowly digging out of one of the deepest recessions in the past half century, as the country's GDP declined a cumulative 6% in 2008-2009. But banks are climbing over difficult and new terrain, such as persistently slow domestic economic growth, much higher prices for wholesale funding due to sovereign credit worries in the eurozone, and tougher capital rules in the run-up to Basel III. In this podcast, Standard & Poor's credit analyst Renato Panichi provides an in-depth look at the situation and what could lie ahead.

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S&P: CMBS: Risk Retention Guidelines; Rising Mall Vacanies

CMBS: Risk Retention Guidelines; Rising Mall Vacanies (00:12:44 min)

In this Standard & Poor's podcast, Managing Director Ted Burbage, of Investor Relations, and Managing Director Howard Esaki, of Structured Finance Research, discuss “qualified” collateral in risk retention proposals for commercial mortgage-backed securities (CMBS) and new data on mall vacancies.

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S&P: Dutch Banks Continue To Pull Away From The Financial Crisis

Dutch Banks Continue To Pull Away From The Financial Crisis (00:09:42 min)

The Dutch banking system is gradually recovering from the financial crisis, as evidenced by better underlying profitability supported by an improved economic backdrop. Although the outlook for earnings growth remains limited, several large banks are making rapid progress with their restructuring processes. This should support their efforts to repay the government support that several of them received during the downturn. In this CreditMatters TV segment, Associate Director Alexandre Birry provides an overview of the Dutch banking system's recovery, and how it is affecting the market's larger players.

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S&P: The U.S. Commercial Real Estate Outlook And Its Implications For Banks, Insurers, And REITs

The U.S. Commercial Real Estate Outlook And Its Implications For Banks, Insurers, And REITs (00:07:13 min)

The U.S. commercial real estate industry continues to recover from the lashing it took during the recent recession. But as the economy continues to rebound, we expect demand to improve. In this CreditMatters TV segment, Standard & Poor’s Director Matthew Carroll discusses the state of the industry and what lies ahead. Topics include key market drivers and the implications for bank, life insurer, and REIT investment portfolios.

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S&P: Portugal: What S&P's Downgrade Means For The Country's Banks

Portugal: What Standard & Poor's Downgrade Means For The Country's Banks (00:20:59 min)

Since March 28th, 2011, we have downgraded, by several notches, the five Portuguese banks that we rate to 'BBB-'. We have also lowered the short-term ratings to 'A-3'. The outlooks on four of the five banks are negative. One bank still remains on CreditWatch negative. What prompted our rating actions on the banks? In this podcast, Director Elena Iparraguirre explains our rationale, why we feel sovereign risk and banks' ratings are so tighthly correlated, and our main expectations for the Portuguese financial system.

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S&P: Why Municipal Risk Is Low For Rated U.S. Banks

Why Municipal Risk Is Low For Rated U.S. Banks (00:06:06 min)

There has been market debate about the outlook for municipal risk and U.S. banks' potential exposure to it, particularly in their loan portfolios and securities holdings. However, Standard & Poor’s believes the banks it rates aren't really facing significant exposure to municipal risk. In this CreditMatters TV segment, Managing Director Rodrigo Quintanilla explains why and discusses our findings.

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S&P: Why CLO Market Performance Continues To Improve

Why CLO Market Performance Continues To Improve (00:08:45 min)

Performance in the collateralized loan obligation (CLO) market continues to improve, as evidenced by several positive factors. Notably, we upgraded over 30% of our CLO book in the last six to nine months. Of the CLO tranches that we rate -- roughly 4,400 -- only a few are rated 'CC' and below, and more upgrades are possible. For 2011, we expect CLO issuance of roughly $15 billion, and possibly $25 billion if significant improvement is sustained. In this podcast, Director Zachary Wolf provides an overview of CLO market activity thus far this year.

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S&P: The CMBS Market Improves In First-Quarter 2011, But Global Instability Could Impede Progress

The CMBS Market Improves In First-Quarter 2011, But Global Instability Could Impede Progress (00:05:53 min)

In first-quarter 2011, the commercial mortgage-backed securities (CMBS) market experienced improving fundamentals, including tighter spreads and fewer delinquencies. Nevertheless, instability in the Middle East and North Africa, and the earthquake in Japan, resulted in increased volatility and higher commodity prices, which could ultimately hamper new CMBS issuance. In this podcast, Standard & Poor's Senior Director James Manzi provides an overview of CMBS market activity for the first quarter and our expectations for the rest of the year.

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S&P: New Home Sales Sink To An All-Time Low As U.S. Housing Woes Continue

New Home Sales Sink To An All-Time Low As U.S. Housing Woes Continue (00:20:41 min)

This week’s U.S. housing data report negative trends all across the sector. Existing home sales declined 9.6% in February and 33% from their 2005 peak, and sales of new homes dropped to their all-time lowest level. In this podcast, Standard & Poor’s Senior Director Erkan Erturk discusses the latest trends affecting the sector.

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S&P: How The Fed’s Move To Ease Capital Restraints Could Affect Large U.S. Banks

How The Fed’s Move To Ease Capital Restraints Could Affect Large U.S. Banks (00:04:56 min)

On March 18, 2011, the Federal Reserve relaxed its capital restraints on the 19 largest U.S.banks. The move allows these institutions to increase the return of capital to shareholders in the form of dividends and share repurchases. In this CreditMatters TV segment, Standard & Poor's Director Stuart Plesser discusses our thinking on how the decision could affect the banks in the long run. Topics include the potential rating implications, stress test results, and the importance of capital adequacy in the ratings process.

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S&P: Could Bank Resolution Regimes Spur Rating Actions?

Could Bank Resolution Regimes Spur Rating Actions? (00:05:37 min)

Bank resolution regimes are legal and regulatory frameworks that clarify the powers and approaches taken by governments to deal with failing banks. Could these regimes spur rating actions? Moreover, will banks be allowed to fail? In this CreditMatters TV segment, Senior Director and Criteria Officer for Financial Institutions Michelle Brennan answers these questions and provides a big picture look at the effects the regimes could have on global banking and financial systems.

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