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IS THERE A BUBBLE IN TODAY'S APARTMENT PRICING?
Randy Anderson |
While low interest rates and lack of attractive
alternatives have lured investors to the apartment sector, a five-year high in vacancies continues to drive down rents, creating pricing that is out of line with real estate market conditions and making for murky investment
forecasting. In a recent study examining the multi-family market, Randy Anderson, newly-named Ryder Eminent Scholar in Real Estate
Finance, seeks to clarify the relationship between cap rate movements and apartment market conditions.
Anderson attributes the existing slump in occupancies
to a sluggish economy, which has resulted in fewer households forming, and to attractive interest rates and creative financing, which
fostered home ownership. Asking rents have remained stable since the end of 2000, but concessions and operating expenses climbed
5 percent. Insurance rates compounded during the same period, escalating 48 percent, and operating risk remains at a constant high
for apartments as opposed to other commercial properties.
Despite those factors, low cap rates continue
to drive the market. The rate is stoked by poor stock and bond performance and low interest rates. It's also been repressed by
condo conversions, which saw more than one million units sold last year. Conditions, however, appear poised for a moderate rise by
2006. Interest rates are increasing, with more hikes expected by year-end. Yields in stock and bond markets also are expected to
jump, siphoning off potential investors.
At the same time, the outlook is positive for
a tightening of the apartment market. Demand will increase over the next 10 years with the emergence of the echo boomer
generation, the 20-34 year age group, and with the influx of immigrants, which represents two-thirds of the U.S.' annual
population growth. A strong expansion in the "non-traditional" household segment also will augment demand.
With these precursors in mind, market selection
will become a critical and possibly decisive determinant. Areas with lagging job growth, such as San Jose, Denver, and Austin,
will be at greater risk as will cities with excess construction, such as Atlanta, Phoenix, and Dallas.
.: DEAN ELAM ANNOUNCES NEW PROFESSORSHIPS AND EMINENT SCHOLAR APPOINTMENTS.
Last month, Executive Dean Joyce J. Elam announced several faculty appointments to professorships and eminent scholar positions.
Sumit Kundu |
Sumit Kundu is named to the new Ingersoll-Rand (IR) Professorship in International Business (IB). His three-year post is funded by a $50,000 gift, which is doubled through Florida's matching-funds agreement, from Ernesto Ramon, president of IR's Latin American operations,. The endowment targets IB teaching and research, a special interest of IR, an industrial conglomerate with nine top-slot market brands, 45,000 employees, and 100 manufacturing facilities throughout the world.
Krishnan Dandapani |
Krishnan Dandapani is assigned for three years to the Florida International Bankers Association (FIBA) Professorship. The supplement will allow him to pursue research in international and e-banking. Dandapani's work includes a forthcoming book, arising out of his task force investigations following Hurricane Andrew, on financial solutions for hurricane mitigation. He's also researching BOLI, bank-owned life insurance, which for Bank of America last year, for example, resulted in 20 percent of its earnings.
Carolina Gómez |
Carolina Gómez is appointed to the Barsky-Greenstein Professorship for this academic year. The $5,000 award may go toward travel, student assistants, and supplies for teaching enhancement and professional development. She currently is involved in the International MBA and the IB Honors programs. "I am a strong believer in the case method of teaching, and I am honored to join a group of professors who excel in this teaching technique," Gómez said.
Christos Koulamas |
Christos Koulamas and Randy Anderson are newly-named eminent scholars. Koulamas's research-intensive appointment, effective this semester, is renewable five years after he ceases to be chairperson of DSIS, a position he's held since 1997. His research focuses on production operations management, supply chain management, and machine scheduling. Anderson has published about 50 journal articles and amassed eight "Best Paper" awards. His research forte includes residential real estate brokerage performance, REIT (Real Estate Investment Trust), and commercial real estate evaluation and portfolio management.
Other professorships were renewed as follows: Peter Dickson, Knight-Ridder Chair; Joyce J. Elam, James L. Knight Chair; Walfried Lassar, SunTrust Professorship; Ronald Lee, Ryder Chair; Andrew McCosh, Alvah H. Chapman Jr., Chair; Paul Miniard, BMI Professorship; Michael Prietula, Ryder Chair; José de la Torre, Knight-Ridder Byron Harless Chair.
.: DR. KOULAMAS GARNERS COUNCIL OF 100's ANNUAL FACULTY AWARD.
About 150 academics attended the Faculty Convocation this Fall to witness Christos Koulamas being honored with the Council of 100's Outstanding Faculty Award, acknowledging his sustained excellence in teaching, research, and service to Florida International University.
The Council of 100 is comprised of South Florida's top business and civic leaders, serving as the University's most prestigious advocacy group. One of its main initiatives is the Outstanding Faculty Award, which recognizes the exemplary contributions of a single leading FIU professor and rewards him or her with a $10,000 grant.
"When Professor Koulamas's name was announced, I was thrilled because I knew that he was extremely deserving, given his research record, his dedication to teaching, and his commitment to the College," Executive Dean Joyce J. Elam said.
.: COLLEGE LAUNCHES THREE INTERNATIONAL BUSINESS LECTURE SERIES.
Considered a must-attend by industry experts, the September 30th presentation by international venture capitalist Guy Kawasaki drew a capacity crowd to kick off the 2004-05 Kauffman Lecture Series, the first of three speakers' series slated by the College this year. Kawasaki, a columnist for Forbes.com, is a former Apple Fellow at Apple Computer, Inc., and is among those credited with the success of the Macintosh. He spoke on the principles and practices of starting a business, encapsulating the most recent of his eight books, The Art of the Start.
Kawasaki's appearance marked the first of six in the Kauffman lineup. The College's Paul Reynolds, the new director of the Entrepreneurship Research Institute, will be featured October 22. Reynolds is the 2004 recipient of Sweden's FSF-NUTEK Award and is a recognized authority on business-building in 36 countries.
The Department of Management and International Business opens its speakers' series with Assistant Professor Aya Chacar's working paper, "On a Wild Goose Chase: Looking for Business Group Effects," on October 15. According to organizer Sumit Kundu, the forum is intended to promote research efforts by faculty and doctoral students, as is the South Florida Research Colloquium, a six-part lecture series he's organizing with the University of Miami, Florida Atlantic University, and Barry University.
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.: SCHOOL OF ACCOUNTING HOSTS ALUMNI BREAKFASTS AT AREA CPA FIRMS.
Executive Dean Joyce J. Elam and School of Accounting Director Dana Forgione met this month with alumni at PriceWaterhouse Coopers and Deloitte & Touche to update them on the College's recent achievements. Forgione informed them that the School is the largest in the U.S., as reported by the Wall Street Journal in July. Additionally, it stands as one of only 125 separately-accredited accounting programs in the world out of more than about 1,200 programs and ranks in the top 10 percent in that category.
With support from various firms, the School hopes to identify accounting alumni and follow up with organizational and fundraising programs led by the Accounting Advisory Board.
Elam and Forgione will meet with alumni from KPMG on December 14 at the Miami City Club.
.: NICARAGUAN PRESIDENT ATTENDS COUNTRY'S CREDIT CONFERENCE CONDUCTED BY COLLEGE ALUMNUS VOLUNTEER.
In an individual effort to reduce
poverty, Omar Salinero (MSF '90) devoted three weeks away from his Colorado brokerage firm to consult agribusiness
creditors and cooperatives in Nicaragua, culminating in a conference attended by Enrique Bolanos, that country's
president.
The initiative was an outgrowth of the College's USAID-sponsored program, which is funded through an $868,000, five-year grant from Winrock International. The program pairs U.S. experts in farming, finance, education, and policy-making with farmers and farmer organizations in Latin America to improve agricultural productivity and trade. Coordinator Carmen Algeciras (MIB '03) said she recruited Salinero after they met at the USAID booth during the XXV Hemispheric Congress in Miami, where domestic and international exhibitors displayed food, services, and non-traditional products.
"I'm very pleased with the feedback from our host, the Fondo de Credito
Rural," Algeciras said. "I think that through Mr. Salinerno's
assistance, the Fondo will improve its loan application and approval
processes, which will result in better access to funds."
Salinero called the Fondo, "the
life blood of the small- to medium-sized farmers it serves and the agricultural sector as a whole in Nicaragua." He visited
and audited 10 such operations, determining their credit-worthiness and recommending improvements in their business
practices.
.: ALUMNI MINGLE AT OKTOBERFEST MIXER.
Business Alumni met September 23 at
Fritz and Franz Bierhaus (formerly Satchmo's) to greet old friends and network. They represented businesses including American
Express, Bank United, Carnival, Deloitte & Touche, Colbert, Boue and Juncadella, PA, and the Coconut Grove Actors Playhouse.
Congratulations to business card raffle winner Orlando Collazo from Bank United who won a $25 certificate from Fritz and
Franz.
.: ALUMNI FUN DAY WITH Y-100 TO BE HELD OCTOBER 16.
Costumed characters from the Miami
Seaquarium and the Street Team from Y-100.7 radio will be among the attractions at the first-ever Alumni Fun Day on October 16
from 11 a.m. to 3:30 p.m. on the Ryder Business Building lawn, University Park. Alumni also will have a chance to win a trip for
two to Atlantis Paradise Island in the Bahamas. The free event for alumni, family, and friends is sponsored by Bank United,
Brickell Personnel, Click Pharmacy, Colbert, Boue and Juncadella, PA, Commerce Bank, Costco, Hayhurst Mortgage, Initia, Kramer
Laboratories Inc., Miami Seaquarium, Palmetto General Hospital, Shikare Professional Recruiters, and Y-100.7 FM. RSVP at our alumni
web site.
Have exciting news to share?
Update your alumni profile at our alumni web site. For upcoming events from your Business
Alumni Chapter, log on to http://cbalumni.fiu.edu/.
.: IB HONORS SOCIETY JOINS A DISTINGUISHED S.E. ASIAN BBA PROGRAM FOR SPRING BREAK.
The International Business Honors Society is going to Bangkok during Spring Break, for the first time partnering with a university outside the U.S. on a community service project.
Chulalongkorn University's International BBA Program will host 12 to 24 students from Florida International University for a week-long Alternative Spring Break (ASB) adventure. The trip, March 21-25, plus travel days, will include limited sight-seeing, lodging with Chula students, and working on a social service project, according to the College's service learning organizer Robert "Dr. Bob" Hogner.
"This trip will appeal to both scholarly and aesthetic interests," Hogner said. "Chula is the premier university in Southeast Asia. It's the Harvard of Thailand." Hogner said the program is open to all students, but will be especially attractive to those studying IB and international relations.
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Robert L. Mihm (BS '74), as director of outsourcing for InSource, has clients in nine states and specializes in companies looking to go public in 36 months.
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Alphoncia LaFrance (BBA '92), president of Midas Lending Corp., adjunct professor at Miami-Dade College, and host of a weekly Creole-language program on small-business development on WLQY-AM (1320), ran for Miami-Dade Commissioner in District 1.
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Demian Bellumio (BBA '00), vice president of corporate finance and development at Terremark Worldwide, Inc., and Albert Santalo (MBA '97), CEO and president of Avisena, Inc., will both be recipients of Florida International University's Torch Awards, which honor individuals who have had a positive impact on their profession and community. The Torch Awards will take place on November 6 at the Loews Miami Beach Hotel.
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Manny Varas, Council of 100 member, was highlighted on HispanicBusiness.com as one of America's youngest self-made millionaires.
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Joe Izquierdo (EMBA '03) has been promoted to director of circulation technology for Knight Ridder.
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