A brief bio:
With 35 years of real estate industry experience, including 26 years of research, Glenn Mueller is a professor for the Burns School of Real Estate and Construction Management at Denver University, one of the oldest and largest programs in the country. Mueller’s research experience includes real estate market-cycle analysis, real estate securities analysis, real estate capital markets, portfolio and diversification analysis, seniors housing analysis and both public and private market-investment strategies. He is also the real estate investment strategist at Dividend Capital Group, where he provides real estate market-cycle research and investment strategy for Dividend Capital’s Real Estate Securities, Private Real Estate Investment, Private REIT and Real Estate Debt groups. He is also the co-editor of the Journal of Real Estate Portfolio Management.
Dr. Mueller presented attributes of the 2016 Physical Cycle and Financial Cycle we have seen thus far:
2016 Physical Cycle
- Cycles can be Long or Short
- LONG economic expansion means LONG real estate UP Cycle
- Cycles can be driven by Demand or Supply
- Supply growth slowest in 2013 - now increasing moderately
- Growth phase of cycle 2014-2020? (depending on market and property type)
- Capital flows affect prices - volatile stock market and low bond rates
- Real estate more Stable and Safer investment?
- Debt financing harder in this cycle - more cash down
- Low new construction
- DIFFERENTIATE residential ownership versus commercial real estate to your investors!
Whereas interest rates are still some of the lowest in US history, tax deductions still remain in place, new commercial construction projects are slow to come out of the ground due to regulations, and therefore rental rates will continue to rise.
Among the caveats were the steady lowering cap rates and the possible future interest rate increases,tax increases, and/or more regulations.
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