MARKETTRENDS
Top 3 Apartment Markets by vacancy rate decline, 2Q11–2Q12
MARKET Houston
Chattanooga, Tenn.
Libor– What Is It?
Fort Worth, Texas
Source: Reis
2Q12 VACANCY RATE (%) 7.6 3.6
5.8
BP CHANGE FROM 2Q11
-220 -220
-210
T e recent debacle involving manipulation of the London Interbank Off ered Rate caused many to wonder what exactly it is. T is benchmark interest rate used throughout the world's fi nancial systems is determined by the British Bankers Association, according to Knowledge@Wharton.com. Every day at 11 a.m., 20 of the world's largest banks submit interest rate data involving 10 currencies for 15 diff erent loan terms. "T e BBA then throws out the top 25 percent of quotes and the bottom 25 percent, and takes the average of the remainder," says Wharton fi nance professor Richard J. Herring. "T is makes it seem highly unlikely that any one bank could manipulate the rate, but on closer inspection, it is possible." While less accurate than other benchmarks, Libor has persisted out of tradi-
tion and the fact that it incorporates risk into its assessment. "[Libor] is intended to reveal the banks' real cost of money, incorporating all the market's up-to- the-minute assessments of the risk of lending to the participating banks. In contrast, a U.S. Treasury bond rate, while set more transparently, does not include default risk. …so the two rates refl ect a diff erent set of concerns," reports Knowledge@Wharton. Find out what alternatives might replace Libor by reading "T e Libor Mess: How Did It Happen — and What Lies Ahead?" at knowledge.wharton.upenn.edu.
JOBS, JOBS, JOBS
6
Offi ce-using jobs lost
during the recession: 1.7 million
Offi ce-using jobs gained during the recovery: 1.5 million Source: Jones Lang LaSalle
Commercial Investment Real Estate
iofoto/Veer