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The Real Estate Capital Scoreboard - November, 2006


Chicago, Illinois -- November 1, 2006 - For the third consecutive meeting, the FOMC decided to keep rates on a steady direction after 17 rate hikes. A flat-and-inverted yield curve prevails. After climbing nearly a quarter point, rates settled at about the same levels as a month ago. Borrowers and investors are still enjoying some of the best debt costs in recent years.

As is the case all year long, income-property underwriting standards (both debt and equity) are flirting within extremely aggressive boundaries. Nearly all classes of income properties benefit from favorable pricing. By historical standards, properties located in secondary markets are barely lower priced than major-market assets. In tandem with a flat treasury yield curve, real estate capital markets are tightly priced -- allowing minimal premiums for property/location dynamics.

What are current issues are discussed today?

1) Interest rate jitters.
2) Narrow pricing differentials among various asset classes.
3) Purchasing of properties at, or above replacement costs.
4) Risk-adjusted pricing of credit tenants.
5) Future ripple effect of housing on income properties - particularly the retail sector.


Nat Zvislo, Research Director of the Real Estate Capital Institute advises, “Despite premium prices accompanied by higher risks, real estate capital markets are still relatively attractive compared to overall stocks and bonds.”

The Real Estate Capital Institute ( monitors realty rates data for debt and equity yields on a daily, monthly and annual basis. The Institute tracks benchmark rates including treasuries, bank prime and LIBOR dating back to 1990. Additionally, interest rates are updated hourly by calling the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825. For more information about the Institute, call (800) 994-RECI (7324)or inquire at

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