Author Archive

The Alter Group Named NAIOP’s 2010 Developer of the Year

Wednesday, September 22nd, 2010

NAIOP honors The Alter Group as its 2010 Developer of the Year.I am pleased to announce that The Alter Group has received the great honor of being named the 2010 Developer of the Year — the industry’s most prestigious award — by NAIOP, the Commercial Real Estate Development Association on behalf of our entire national team and our talented executive group, which has been in place for more than 30 years.

As a company, The Alter Group has stayed true to our core values and our traditional way of doing business:  maintaining solid underwriting standards; a conservative attitude towards investment; and really focusing on strong credit, both for our tenants and our assets.  We continue to work to assure that every asset has the right fundamentals in place, from a prime location to the right tenant mix, so that we can guarantee its stability over the long term.

Our industry is first and foremost about people and building communities that flourish.  These were the values that motivated the pioneers of our industry – my Dad, among them – to go to new places, to make deals over a cup of coffee and a handshake, and to see the potential in our communities.  We’re still a people business and I think this, more than anything, is what distinguishes The Alter Group.  I want to thank all of you who have partnered with us over the years – our clients, our service providers and the many municipalities that have helped us to flourish.  It is because of these that we have been here for 55 years.  We thank you.

Nothing Succeeds Like Success

Thursday, March 12th, 2009

Tuesday, March 10’s 379.44 stock market spike – the best finish since Thanksgiving – came on the heels of Citigroup, Inc.’s news that it had made a healthy profit during the first two months of 2009.  At the end of the day, the stock market had soared to a 6,926.49 close.

man-with-cigarSo, what did it?  It wasn’t a bold move by Treasury Secretary Timothy Geithner.  It wasn’t the American Recovery and Reinvestment Act.  It wasn’t hope.  It wasn’t a government plan.

The catalyst that triggered the 5.8 percent Dow Jones Industrial Average stock market rise was honest-to-God good news.  The revelation was in the form of a leaked memo written by Citigroup CEO Vikram Pandit stating that the banking giant had enjoyed its best financial performance in more than a year.  The memo, written to reassure the bank’s employees about its stability, said that Citigroup had recorded an operating profit of $8.3 billion before taxes and special items through the end of February.  This was Citigroup’s best performance since the third quarter of 2007 and puts it into a sound cash position.

The memo did not detail what the special items involved, but they could include credit losses and writedowns.  Still, the news kicked off a buying frenzy.  Worldwide financial stocks rose, with Citigroup up 38 percent for the day.

Broader indices like the Standard & Poors 500 index rose 43.07 to 719.60; NASDAQ soared 89.64 points to 1,358.28.

How Will President Obama Impact Commercial Real Estate? Part 2

Monday, December 22nd, 2008

So what to make of President-Elect Obama’s progressive economic policies?  What his critics miss are some of the most intriguing features of his plan — providing companies with tax credits for hiring new employees; raising the investment expensing limit for small businesses; eliminating the capital gains rate for investing in small businesses; and the massive infrastructure rebuilding plans to fix roads, bridges and schools.  The last initiative has the potential to create millions of new jobs for the construction trades.

Although it will take time, we believe that the incoming president’s stimulus plans are visionary and ultimately will succeed.  In time, these progressive programs will lead to a wealthier middle class, increased consumer spending and overall economic growth.

How Will President Obama Impact Commercial Real Estate? Part 1

Thursday, December 18th, 2008

With change expected to begin in Washington, D.C., on January 20, 2009, the commercial real estate industry is bracing itself for the incoming Obama administration and the 111th Congress.  CoStar Advisor recently polled commercial real estate professionals on the top issues of the first 100 days.  The resulting list includes such policy issues as saying “no” to capital-gains increases and other investment taxes; moving forcefully to stabilize the Treasury and capital markets; suspending market rules regulating perceived asset value; making the biggest investment in the public infrastructure since the 1950s; and reforming Fannie Mae and Freddie Mac.

The overall attitude within the industry, according to a poll by National Real Estate Investor, is negative because of Obama’s plan to hike taxes on dividend income, capital gains and high-earning individuals.  The poll notes that 54 percent of responders are registered Republicans.

So, should our industry be wary of the new team?

Fed Chairman Bernanke Takes Steps to Restart the Economy

Friday, November 7th, 2008

Ben Bernanke has spoken.  The Fed chairman and the Federal Reserve moved recently to stimulate the economy when the policy-making committee cut the federal funds rate – the rate at which banks lend to each other – to just one percent.  This represents a half percentage point cut from the previous 1.5 percent rate.  By contrast, during the summer of 2007, this rate was 5.25 percent.

There is more good news.  Treasury rates have stabilized.  The value of the dollar and the yen are soaring.  The price of oil has fallen to less than $70 a barrel.  The New York Stock Exchange rose nearly 900 points in a single day, following the lead of markets ranging from Tokyo to Hong Kong to London.  The inflation rate is just 4.9 percent.  Unemployment is 5.7 percent – a lower proportion than was seen during previous recessions of recent decades.

And, according to NAI Global’s recent Capital Markets Update, the doomsayers who describe the current situation as “the worst economic situation ever” either are very young or have short memories.  The seemingly endless stagflation of 1973 – 1981 was far worse; so was the collapse of the savings-and-loan industry from 1989 – 1993.  The failure and September 11 wiped out more wealth when compared with the GDP.

Commercial real estate is in far better shape than the early 1990s, thanks to lower vacancy rates, higher rents and shorter construction pipelines.  Delinquency rates are virtually non-existent, though that situation could easily change.  Published in September of 2008, NAI Global’s report projects that recovery will occur within nine to 15 months.

Paul Volcker: U.S. Is in a Recession

Wednesday, October 22nd, 2008

“It’s not going to be a problem in the short run.  Inflation doesn’t flourish in the face of recession,” said Paul Volcker, who served as chairman of the Federal Reserve from 1979 until 1987.  “It’s something we have to worry about when we get out of this recession.  I have been around for a while.  I have seen a lot of crises, but I have never seen anything quite like this one.  This crisis is an exception.  I don’t think we can escape damage to the real economy.” Volcker believes that the United States is officially in a state of recession.  In a Reuters’ article, Volcker affirms that stabilizing the financial system to ease the credit crisis is a government priority, even if it requires significant intrusion into the private sector.

“The first priority is to stabilize the financial system.  It is necessary, even though the cost is heavy government intrusion in markets that should be private,” Volcker told an audience at a seminar in Singapore.  “Housing prices in the U.S. are still declining.  There are more losses to come.”

Volcker, who is credited with battling the double-digit inflation of the 1970s, believes that the massive infusion of liquidity by the Federal Reserve ultimately could result in inflation or even stagflation.

Volcker is currently chairman of the board of trustees of the Group of 30, an international body composed of central-bank governors, leading economists and private financial-sector experts.  Additionally, the former Federal Reserve chairman is serving as an economic advisor to Barack Obama’s presidential campaign.


Wednesday, March 19th, 2008

Dear Friends,

Welcome to Alter NOW, our company’s brand new blog. We hope you’ll find it informative as we set out to chronicle the important trends underway in our industry. We hope to keep this free from sales and marketing language and simply use it as a way to start a dialogue with the stakeholders in our firm — our clients, our tenants, our contractors, our communities.

For those who may be unfamiliar with our firm, The Alter Group is 53 years old this year. We started as a residential developer in the south side of Chicago and have since grown to become a national developer of office, industrial, healthcare, hotel and retail facilities in 25 markets around the country — from California to Washington DC.

There are 160 people in 4 offices who keep the company running. I am grateful to all of them. Since brevity is the soul of wit, I will sign off here. I hope you enjoy Alter NOW.

Best wishes,