Managing Director/Principal, Gary M. Tenzer will be conducting a one-on-one interview with Los Angeles-based developer and founder of G.H. Palmer Associates, Geoff Palmer, at the upcoming Connect Apartments Conference on September 15. Since establishing G.H. Palmer Associates in 1978, Mr. Palmer has developed an excess of 10,400 apartment units, a majority of those in the heart of Downtown Los Angeles. With a real estate holdings portfolio valued over $3.0 billion, Mr. Tenzer arranged over $1.5 billion in financing for G. H. Palmer Associates. Conference registration is available online.

George Smith Partners identified a mid-western portfolio capital provider funding ground-up construction transactions and five year mini-perm term loans located in 10 mid-western states including Texas. Oil regions are not shied away from. Out of footprint transactions will be funded for mid-western sponsors. Priced from LIBOR plus 250 to 400; non-recourse construction will be considered for transactions to 50% of cost. Loans from $2,000,000 to $15,000,000 are financed to 75% of total cost with a repayment guarantee that burns off at stabilization.

Treasuries continue to trade in an extremely tight range; the 10 year sitting at 1.53%. Fed Chair Yellen’s speech, other Fed officials’ statements and last Friday’s employment report have led to the following general consensus: The Fed will raise rates one time this year in September (possibly) or December (most likely). Today’s Beige Book release and granular stats in recent employment reports focus on a key element in the Fed’s stated mission: wage growth. The Fed feels that their mandate is to “raise all boats”, ie create wage growth across all classes. It harkens back to the great post WW2 US economic expansion (generally thought of as 1946-1973), a period in which a majority of factory workers, blue and white collar employees enjoyed an ever-improving standard of living. That paradigm sputtered and flattened even during the 1990s and early 2000s expansions due to outsourcing, foreign competition, and other factors. Today’s Beige Book noted that wage increases are being reported among highly skilled workers, technology specialists, etc. In other words, the “holy grail” of widespread wage growth is still elusive. Is this part of the “new normal” and “secular stagnation”? This also highlights another issue: monetary policy vs. fiscal policy. Today’s world features extremely active (hyper active?) central banks and deadlocked legislative bodies (ie: US Congress, et al). Monetary policy can only do so much; many are looking to governments to do their part (job training, etc). Will this year’s election lead to a more cooperation and activity from the executive and legislative branches? Some real policy? Or is the Fed going to go it alone until it realizes that it has taken monetary policy to “the limit” and raises rates? Stay tuned.

David R. Pascale, Jr.