1991-2001
Falcon's Tenth Anniversary

Falcon Real Estate was formed ten years ago, in September 1991. We were then at the bottom of one of the worst real estate recessions that the United States had experienced since the Great Depression of the 1930's. But the U.S. real estate market recovered from that recession much more quickly than had been expected, and within a few years every measure of the health of the market — occupancy rates, rental rates and property values — were all rising.
During the past ten years Falcon has carried out over $1 billion of transactions on behalf of our clients, and we currently provide asset management for in excess of $750 million of real estate assets around the country. We now have offices in six cities — New York, Chicago, Washington D.C., Miami, Dallas and San Diego — and we have an experienced staff of professionals of whom we are justifiably proud.

We began publishing newsletters such as this one shortly after Falcon was started, and we are outlining in this issue excerpts from the issues of the past ten years.

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January, 1992
The 1992 Outlook

Tremendous over-building and a slow rental market due to the recession have resulted in high vacancies, declining rental rates, and plunging real estate values throughout the United States. The current recession in the real estate market is, in many ways, the worst in the last 50 years. But new construction has virtually stopped throughout the U.S., and occupancy rates will improve as the economy recovers. Since real estate prices have declined sharply, falling, in many cases, well below replacement costs, there is now for the astute, long-term investor an historic buying opportunity.

October, 1992
The U.S. Dollar

But for the foreign investor, U. S. real estate prices may be even more attractive, since the U. S. dollar continues to trade at near-record lows. Even after its recent rally, the dollar remains about 20% lower in German mark terms than it was one year ago. For the foreign investor, an eventual recovery in the dollar could enhance the already attractive total returns available in the U. S. real estate market.

January, 1993
The Start of the Recovery

All of the elements are slowly falling into place for a sustained recovery in the U.S. commercial real estate market. The American economy is showing surprising strength and appears to be heading into a period of steady growth. This is leading to a slow pick-up in leasing activity, particularly in well-situated industrial buildings and suburban offices. With virtually no new construction taking place anywhere in the United States, vacancy rates in many markets have begun to creep down, and we expect this trend to continue. Real estate investors have had a tremendous buying opportunity over the past two years, and this window of opportunity should remain open during 1993.

October, 1994
Favorable Supply/Demand Situation

The most important factors that indicate a continued increase in the value of commercial real estate on a long-term basis are supply and demand. Throughout the United States, more constraints have been placed on the development of well-located, quality real estate than at any time in history. At the same time, demand will continue to grow in line with the growth of population and the economy. The result will be rising rental rates and increased values for high quality commercial properties through the end of the decade.

April, 1995
No Speculative Construction

As demand for space has picked up, there continues to be a total absence of new speculative construction, with lending institutions remaining on the sidelines and existing rent levels being too low to justify new construction. This changing supply/demand situation is beginning to result in upward pressure on rental rates, a trend that is likely to continue for the next several years.

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