Appraisal: NAR, AI to Realign?

SPECIALTIES IN BRIEF: Appraisal, Commercial, International, and Property Management. The latest news on your real estate niche.

May 1, 1998

A study group has been meeting to explore the benefits of again joining together NAR and the Appraisal Institute. Although a number of issues are still on the table regarding a realignment, the group was expected to forward recommendations for consideration by NAR's Midyear Business Meetings.

The NAR Real Estate Appraisal Section was formed in 1991 when the American Institute of Real Estate Appraisers (AIREA) voted to disaffiliate from NAR.

For more information on appraisal-related issues, contact the NAR Appraisal Section at 800/354-2397. Be sure to request a membership application and a sample Appraiser Update newsletter.

Commercial: Strong Market, Plentiful Capital Seen for 1998

This year is expected to be a good one for sellers of commercial properties. That's according to the 1998 Landauer Real Estate Market Forecast, published annually by Landauer Associates Inc., an international counseling company.

A healthy amount of capital and strong market foundations support the prediction that office, retail, hotel, and residential sectors will see a good amount of growth through the end of the decade. Only the industrial sector is forecast to see a flattening trend.

Other predictions made by Landauer for this year:

  • REITs will be aggressive buyers of office buildings.
  • Shopping centers will see more investment capital.
  • Senior housing will have excellent investment returns.
  • Hotel transactions will be big-ticket and active.
  • Office properties will continue to boom.
  • New construction cycle will heat up between 1998 and 2000.

For more information on this report, visit

Office Investment Doubles

U.S. office properties investment has almost doubled over the past year, according to a new study by Granite Partners, a New York-based real estate consulting firm. According to the study, total office investment was about $46 billion last year for transactions greater than $10 million, with real estate investment trusts accounting for nearly half of all individual transactions and 84 percent of all portfolio transactions.

For more information on office properties, visit the Society of Industrial and Office REALTORS®at

NAR Assists CMBS Market

A record $44 billion in commercial mortgage-backed securities (CMBS) was issued in 1997, thanks to some help from NAR. That’s up from $35 billion issued in 1996, reports Commercial Market Alert, a trade publication.

NAR teamed up with heavy hitters like the Mortgage Bankers Association of America and the National Realty Committee to help influence the 1996 release of the Capital Markets Mortgage, the first mortgage document "template" established for securitized commercial real estate loans. Now widely adopted in the industry, this long-sought-after template sparked the growth of the CMBS market, say NAR analysts.

NAR and other groups continue their commitment to CMBS by taking legislative and regulatory initiatives to reduce unnecessary barriers to the market. In addition, the groups will launch a revised Capital Markets Mortgage sometime this summer. Keep an eye out for the revised document on One Realtor Place® at REALTOR.COM.

For more information on NAR's legislative initiatives, visit One Realtor Place®.

Lining Up for Bargains

U.S. investors are ready to capitalize on Asia's economic turmoil by purchasing commercial properties in Japan, says The Wall Street Journal.

Japanese banks have been holding "fire sales" of property assets since regulations were enacted in March making it more difficult for Japanese banks to keep problem assets on their books. As a result, U.S. companies such as Dean Witter, J.P. Morgan & Co., and Merrill Lynch & Co. are lining up to bid on properties in and around Tokyo. Most of the deals involve bulk sales of "packaged" properties, as Japanese banks toss good real estate in with the bad in an effort to get certain capital off their books.

The Asian crisis has caused Japan's commercial property market to fall almost 80 percent from its peak in 1991, according to the Journal. Still, many U.S. investors caution that the market may well dry up once banks adapt to the new regulations and the pressure is off to clean up the books.

For more information on commercial real estate issues, contact the Commercial Investment Real Estate Institute at 800/621-7027 or visit CIREI's Web site at

Property Management: Beefing Up Amenities

Imagine being able to set your apartment's temperature remotely from a telephone. That's just one of the amenities offered through JPI Investment Co.'s Project 2000 apartment complex in Richardson, Texas. Other amenities include high-speed Internet access, theater-quality sound in living rooms, and a view of entry gates from closed-circuit TV.

JPI is just one of a growing number of luxury apartment builders targeting well-to-do professionals, according to a recent article in The Wall Street Journal. Many builders are replacing large clubhouses and fancy pools with high-end finishes for high-income clients, says Lewis Bunch, a partner at Trammell Crow Residential in Atlanta.

Other amenity trends include on-site day care, valet parking, and complimentary Sunday brunches. Developers say all the additional bells and whistles, along with rising labor and material costs, have raised construction costs as much as 30 percent per square foot since 1993. New units are also larger, according to the Journal, averaging 1,095 square feet last year, compared with 980 square feet in 1987.

Seeking information on property management issues and educational opportunities? Contact IREM at 312/329-6000 or visit IREM's Web site at

New Rules for Credit Reports

Property owners and managers are reminded that they must comply with the new Fair Credit Reporting Act (FCRA) that became effective Sept. 30, 1997. In a nutshell, the act says that to reject applicants on the basis of their credit report, you must

  • Give applicants the name of the credit reporting agency
  • Tell applicants the credit agency didn’t make the decision to reject them
  • Tell applicants they have the right to get a copy of their credit report, dispute the report, and add a consumer statement to their report

If you turn down applicants on the basis of information other than a credit report, you must cite the reason or tell them they can submit a request for you to disclose the reason.

For the full text of the FCRA revisions, visit

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