What a bizarre two years it has been...

I originally started this blog in 2007, when it was common that trophy commercial real estate assets would trade for 3% cap rates (cap rate = property-level net operating income divided by property value). I felt the market correction coming -- albeit not nearly to the extent that we are experiencing today, nor the extent to which I think we'll see in the next couple of years.

Two years later, I'm at my second company since leaving the boutique i-banking firm, including 15-month pit stop at one of the biggest hedge funds on the Street (where my strategy proceeded to blow up). And I, like everyone else, am wondering -- where do we go from here?

The people who used to read this blog are probably long gone. Most who worked in the CRE industry in New York have left for less-competitive locales. So I'm really just posting this to see if it's picked up on anyone's RSS feeds.

I dropped everything when I went to the hedge fund to focus 100% of my time on the strategy. Now that I have a bit more time on my hands, I'll probably resume blogging regardless of whether anyone reads it. It's amazing to me that since I started this, there still have been no blogs about commercial real estate that have popped up given everything that's going on. It's an incredibly interesting time, yet no one seems interested.

The Point...

To join my bookmarked i-banking blogs, write a bit about the current [insane] real estate capital markets, and hopefully blow off some steam.

I work at a real estate i-bank in New York, a mid-level guy trying to get my other foot out of the trenches. At our firm, intensity is the name of the game. Verbal assaults and rulers slapping the tops of hands is the norm. Doors slamming, papers ripping, blood-curdling screaming... that type of thing. The typical New York investment banking company. But real estate.

2007 is the year of the three-cap in New York, with Harry Macklowe hitting lead-off as the flippee in the EOP/Blackstone NY portfolio, and more to come, as a historic, highly-prominent, "jewel" of an office building in Midtown is quietly-rumored to be trading in the next week.

Last year, we saw cap rate in Manhattan drop to the "fours" in typical deals, with anything in the fives considered a bargain. Nationwide, trophies trading in the sixes were viewed as virtual steals (see: San Diego). So the obvious questions are what's next, and at what point does it stop (or even slow)?