HOTEL FINANCINGS POWERING SURGE IN CMBS MARKET
Feb 13, 2018 | By Mark Heschmeyer| Original Content of CoStar News
CMBS issuance this year is off to a strong start, driven, as it was last year, by single-borrower deals totaling $4.7 billion so far.
Notably, hotel properties again have been one of the stars of the current run and have facilitated a number of large refinancings and acquisitions. Issuance of CMBS loans in the hotel sector grew from $2.7 billion in 2016 to nearly $14.5 billion in 2017, according to JLL.
Slightly more than half of this year's private-label deals by dollar amount are backed by hotel properties -- $2.9 billion in all with two more in the pipeline. The loans this year range from $190 million to $960 million averaging $415 million.
"The size of the CMBS market is where it should be at this point in the cycle, and it's continuing to provide a valuable alternative for property types that might not be getting life company or other institutional money because of lender selectivity." said Tom Fish, executive managing director and co-head of JLL Capital Markets, Finance.
However, the current run of hotel deals may be due for a slowdown. Early warning signs of declining hotel performance have emerged, says Fitch Ratings. Fitch has seen an increase in the volume of hotel loans transferring to special servicing and performance metrics in seven of the top U.S. metropolitan markets are under pressure by oversupply. CONTINUE READING
WHAT AN OVERHAUL OF FANNIE MAE AND FREDDIE MAC WOULD MEAN FOR COMMERCIAL REAL ESTATE
Feb 8, 2018 | By Ely Razin| Original Content of Forbes News
CMBS loans for multifamily properties have increasingly been going to Fannie Mae and Freddie Mac in the decade since the global financial crisis, we found in a recent analysis of the commercial mortgage-backed securities market. At the same time, the rumblings of change are making themselves heard in the distance. If the latest efforts to overhaul the U.S. housing finance system don’t fall by the wayside the way previous attempts did, such changes – especially coming as Fannie and Freddie are on the rise – could have broad implications for the securities market as well as lenders, taxpayers, multifamily lending and the housing finance system.
CrediFi examined a sample of $150 billion in loans secured by 5,000 commercial properties across the U.S. that were originated from 2003 through the first six months of 2017 and found that almost all the multifamily CMBS loans originated pre-crisis have left the CMBS world since 2009. When receiving new financing, 61% of the loans, or $18.7 billion, became agency loans, with slightly more going to Fannie Mae than to Freddie Mac. Most of the rest moved on to lenders’ balance sheets, with just a sliver going back into CMBS.
The CrediFi analysis is bolstered by findings from the Financial Stability Oversight Council, which found in its 2017 annual report that while CMBS issuance fell by over a quarter year-over-year in 2016 – a reversal of the post-crisis trend of rising issuance – agency lending rose 23.7% in 2016, when it accounted for over 60% of securitized commercial loans issued. CONTINUE READING
AVERAGE HOME SELLER PROFITS AT 10-YEAR HIGH OF $54,000 IN Q4 2017
Feb 7, 2018 | By ATTOM STAFF| Original Content of Attom Data Solutions
IRVINE, Calif. – Feb. 1, 2018 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Year-End and Q4 2017 U.S. Home Sales Report, which shows that home sellers in Q4 2017 realized an average home price gain since purchase of $54,000, up from $53,732 in the previous quarter and up from $47,133 in Q4 2016 to the highest since Q3 2007 — a more than 10-year high.
That $54,000 average home seller profit represented an average 29.7 percent return on investment compared to the original purchase price, up from 28.8 percent in the previous quarter and up from 26.8 percent in Q4 2016 to the highest average home seller ROI since Q3 2007.
“It’s the most profitable time to sell a home in more than 10 years yet homeowners are staying put longer than we’ve ever seen,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”CONTINUE READING
CHANGES IN COMMERCIAL REAL ESTATE ARE REWRITING LANDLORD RULES FOR THE 21ST CENTURY
Jan 30, 2018 | By Marcus Moufarrige| Original Content of Forbes News
The digital transformation is more than just another buzzword. As the millennial workforce prepares for middle age, Gen Z is now also entering the workplace and continuing the drive for better technology and mobility. The future of commercial real estate is forcing landlords to evolve and meet a new set of tenant demands.
The entire landscape is evolving as we increasingly see consolidation and specialization in new and upcoming industries. Even finance, which has previously been accused of being slow to adapt to the digital world, is beginning to embrace flexible office space and diverting from its traditional office background. Tenants now have a much longer list of requirements than the traditional amount of square footage based on X amount of square feet per head.
Using office space in multiple ways to provide greater flexibility and efficiency is rapidly rising to the top of wish lists in boardrooms across the globe. The key words here are "flexible" and "service." Commercial real estate is being disrupted by tenants who have seen that flexibility and service can be a reality thanks to companies offering these types of CONTINUE READING.
ENOUGH WITH THE DOOM AND GLOOM. RETAIL AND ITS REAL ESTATE HAVE BRIGHT SPOTS.
Top retail real estate owners in the U.S. have maintained occupancy rates at or above 95 percent.
Jan 24, 2018 | By Lauren Thomas| Original Content of CNBC News
Retail isn't just decades-old apparel brands and antiquated shopping malls.
The future for many industry names is bright and booming, despite dire headlines. And malls and shopping centers are taking on a new image of their own, bringing in experiential tenants and living spaces as department stores and other big-box anchors scale back.
"Store closures grabbed the headlines and drove the retail apocalypse narrative in 2017 and into 2018," said Deborah Weinswig, managing director of FGRT (formally Fung Global Retail & Technology).
However, "total in-store sales continued to grow, yielding an uplift in sales densities across US retail," she said. CONTINUE READING
THE 10 MOST EXPENSIVE U.S. STREETS FOR OFFICE SPACE
While location is what makes these streets so desirable, competition for space from technology companies is what's driving up rents.
Jan 26, 2018 | By Patricia Kirk| Original Content of National Real Estate Investor News
Many of the nation’s most prominent companies are willing to pay a considerable premium for a high-profile address, according to the latest study by real estate services firm JLL, which ranks the priciest U.S. streets for office space. Asking rents for office space on the 47 most expensive U.S. streets average $48.65 per sq. ft. — nearly 47 percent more than the average for office rent nationally.
While location is what makes these streets so desirable, the movement of major technology companies to more prestigious locations has created competition with financial, legal and consulting services firms, driving up rents.
Maturing tech companies have office space needs that are similar to the professional services industries that have traditionally occupied top class-A buildings, says JLL Director of U.S. Office Research and report author Scott Homa. He notes that major tech players are leasing large blocks of space in the most desirable office locations from Menlo Park, Calif.’s Sand Hill Road to Main St. in Cambridge, Mass. Half of the 10 most expensive U.S. office streets are now in tech hub cities. CONTINUE READING
PROPERTY SALES VOLUME DROPS AGAIN IN 2017 BY 7 PERCENT
Jan 24, 2018 | Commercial Real Estate Direct Staff Report | Original Content of Commercial Real Estate News
The volume of commercial properties that changed hands last year declined by 7 percent to $463.9 billion, according to Real Capital Analytics. That marks the second year in a row in which sales volumes have declined. In 2016, they were down 11 percent from the previous year.
The New York research firm blamed the weaker sales volume on the growing gap in pricing expectations between sellers and buyers. The latter don't expect capitalization rates, which determine pricing levels and are reliant on interest rates, to decline, while the former remain stubborn with their pricing expectations.
Every major property sector, with the exception of industrial, saw a decline in sales volume last year. Sales of hotel properties plunged by a sector-leading 24 percent to $27.5 billion; retail properties fell by 18 percent to $63.4 billion, and office properties dropped by 8 percent to $131.9 billion. CONTINUE READING
THREE CRE JOBS THAT WILL CHANGE WITH THE RISE OF PREDICTIVE ANALYTICS
Jan 25, 2018 | By Marc Rutzen | Original Content of Forbes News
After speaking with hundreds of commercial real estate professionals during the development of our real estate predictive analytics platform, we’ve realized that although everyone wants to capitalize on big data and predictive analytics, few people have a solid understanding of the impact emerging predictive analytics technologies could have on jobs.
There are three commercial real estate jobs I believe will be fundamentally disrupted by the power of predictive analytics and machine learning. After the widespread adoption of predictive analytics products in real estate, chances are good the roles of these professionals will look much different.
The job of the average real estate broker today is difficult and time-consuming. Each week, brokers must make hundreds of calls to generate leads, analyze dozens of potential deals to produce broker opinions of value (BOV), market listings through multiple channels, attend walk-throughs, collect and vet offers and ultimately guide deals through closing.CONTINUE READING
AVOID THESE FOUR COMMON COMMERCIAL REAL ESTATE INVESTING MISTAKES
JANUARY 17, 2018 | By Michael Episcope | Original Content of Forbes News
Buying and managing investment property — be it houses, multifamily units or commercial real estate — is hard work. Owners must choose between paying to outsource and handling everything themselves. The latter can range from finding financing and performing maintenance to resolving emergencies and legal problems. All these tasks extract a price in terms of time, aggravation and mistakes for owners who lack expertise in all of these areas.
Complicating matters further, finding properties with potential is a big challenge facing investors today. High property prices in top markets are driving investors into secondary markets and new types of properties, notes National Real Estate Investor. But these are assets that require deep industry knowledge and experience and challenges I faced as an active individual real estate investor that inspired me to co-found Origin Investments to help individual investors address these obstacles.CONTINUE READING
3 COMMERCIAL REAL ESTATE TRENDS TO WATCH IN 2018
JANUARY 17, 2018 | By Ely Razin | Original Content of Forbes News
Political and economic uncertainty has pervaded the past year, with the U.S. economy showing signs of growth amid low inflation and a distressed retail segment in 2017, as accountants struggle to understand all the implications of the recently passed changes to the tax laws and Europe prepares for Brexit. Here’s a look at three commercial real estate trends to watch in 2018.
With Jerome Powell set to take over as new Federal Reserve chairman, there is some uncertainty surrounding the Fed, specifically whether it will stick to its plan to continue raising interest rates and what it might do about the stubbornly low inflation. The benchmark lending rate rose in December by a quarter percentage point, to a target range of 1.25% to 1.5%. At its December policy meeting, the Federal Reserve left unchanged its forecast for three 2018 rate hikes, following three increases in 2017.
Yet the 10-year Treasury rate has been fairly stable since its steep rise in the second half of 2016, indicating that the market may not be convinced the Fed will be raising rates significantly. The Federal Open Market Committee signaled late last year it expects job market growth to slow, by leaving out prior comments saying further strengthening was expected and instead saying monetary policy would help the labor market “remain strong.” CONTINUE READING
SLOW AND STEADY GROWTH: 2018 PERFORMANCE FORECAST FOR TOP 4 COMMERCIAL REAL ESTATE SECTORS
JANUARY 9, 2018 | By Champaign Williams | Original Content of Forbes News
Following one of the longest economic expansions in U.S. history, Colliers International economists forecast 2017 was the year of the market’s peak.
There are several factors that indicate the cycle’s best years are in the past, Colliers International Chief Economist Andrew Nelson wrote in the company’s 2018 Outlook report, including slowing deal volume, eight consecutive months of declining commercial property prices, plateaued cap rates, a widening divide between seller asking prices and buyer bids and investors going in search of riskier assets for better returns.
Though the cycle is getting long in the tooth, the industry is expected to continue riding the waves of the strong economy to steady growth, albeit at a more moderate pace than years past. CONTINUE READING
ECONOMIC PANEL PREDICTS HOUSING WILL CONTINUE TO GAIN GROUND IN 2018
JANUARY 9, 2018 | By Elizabeth Thompson | Original Content of National Association of Home Builders
The newly enacted tax law will create a more favorable tax climate for the business community, which should spur job and economic growth and keep single-family housing production on a gradual upward trajectory in 2018, according to economists speaking at the NAHB International Builders’ Show® in Orlando, Fla., today.
“We expect that tax reform will boost GDP growth to 2.6 percent in 2018, and this added economic activity will also bode well for housing, although there will be some transition effects in high-tax jurisdictions,” said NAHB Chief Economist Robert Dietz. “Ongoing job creation, expected wage increases and tight existing home inventory will also boost the housing market... CONTINUE READING
LAS VEGAS AMONG CITIES EXPECTED TO BE A TOP 2018 HOUSING MARKET: REPORT
These will be the top 10 housing markets of 2018
JANUARY 3, 2018 | By Kelsey Ramirez | Original Content of HousingWire News
To determine its predictions for the best real estate markets of 2018, realtor.com’s economic data team looked at the number of sales of existing homes and their prices, along with the amount of new home construction in the 100 largest markets.
Realtor.com also analyzed the local economies of each area, along with population trends, unemployment rates, median household incomes and other factors.
“People are going to continue to seek out pockets of affordability that remain in the market,” realtor.com Chief Economist Danielle Hale said. “A lot of these places are more affordable than surrounding areas, yet still have strong economies. Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.” CONTINUE READING
HOUSING OUTLOOK 2018: 6 PREDICTIONS FROM THE EXPERTS
JANUARY 3, 2018 | By Samantha Sharf | Original Content of Forbes News
In 2017 Americans learned to expect the unexpected, whether it be politics, weather or housing. Driven by record low inventory, little about the housing market went as forecast last year. “We thought there would be some things to take the pressure off,” reflects Skylar Olsen, senior economist at home search site Zillow. Interest rates would rise. Construction would pick up. Price growth would moderate. “That did not happen at any impactful level.”
Instead the market got hotter: inventory tightened, prices rose, mortgage rates barely budged and, though new home construction picked up at the end of the year, it was not at the starter price points where new inventory is needed most. Like the soaring stock market, the housing market often seemed disconnected from the tumult in Washington and natural disasters elsewhere. Observes Javier Vivas, director of economic research for Realtor.com: “We saw the economic growth and the economic momentum function as an override for a lot of external forces.” CONTINUE READING
CMBA: CRE ORIGINATORS EXPECT 'STRONG' 2018
JANUARY 4, 2018 | By MBA NewsLink Staff | Original Content of Mortgage Bankers Association
Commercial and multifamily mortgage originators expect another strong year according to the Mortgage Bankers Association's 2018 CREF Outlook Survey.
Nearly four in five (78 percent) of top commercial/multifamily firms expect originations to increase in 2018, with nearly one-fourth (22 percent) expecting an overall increase of 5 percent or more across the entire market. When forecasting just their own firm's originations, nearly half (47 percent) expect to see an increase of 5 percent or more in 2018.
"Mortgage bankers look to 2018 as another growth year for the commercial and multifamily mortgage markets," said MBA Vice President for Research and Economics Jamie Woodwell. "The majority of top firms expect a ‘very strong' appetite from lenders and a ‘strong' appetite from borrowers to drive commercial mortgage originations higher." CONTINUE READING
HOW MAJOR REAL ESTATE DEVELOPERS ARE EXPERIMENTING WITH CO-LIVING
JANUARY 3, 2018 | By Omri Barzilay | Original Content of Forbes News
In the last decade, coworking has proven itself to be more than just a trend. It has dramatically changed the way many of us work today and reframed notions of how an office should look. And then came co-living.
Co-living, a style of shared urban residence, typically involves furnished apartments with communal kitchens and common spaces – and an emphasis on amenities and community. The advantages for Millennials include affordability flexibility and ease of use.
Not so long ago, a few startups like Common, The Collective, Ollie and WeLive by WeWork, started experimenting with applying the cowering... CONTINUE READING
CONSTRUCTION SPENDING THROTTLES PAST EXPECTATIONS IN NOVEMBER , LED BY RESIDENTIAL BUILDING
Construction spending rose 0.8% in November, to a seasonally adjusted annual rate of $1.26 trillion, said Commerce Department
JANUARY 3, 2018 | By Andrea Requier | Original Content of Market Watch News
The monthly gain was led by the private sector, where spending was up 1.0%. Construction outlays in the public sector were up only 0.2% for the month. Overall spending was 2.4% higher than in November 2016, and spending for the year to date was 4.2% higher than the same period a year earlier.
September and October spending levels were revised up to a net 0.4% increase... CONTINUE READING
Commercial Real Estate Lenders To Keep An Eye On In 2018
Who are the up-and-coming commercial real estate lenders in New York City we might expect to see more of in 2018?
December 27, 2017 | By Ely Razin | Original Content of Forbes News
CrediFi took a look at who’s been on the rise this year to get some insight. Here are some of our findings:
Wells Fargo is on track to be the top originator of New York City commercial mortgages for 2017, based on its lending record for the first nine months of the year.
The San Francisco-based bank originated nearly $4 billion in NYC commercial real estate loans in the first nine months of the year – about $1 billion of it in Q3, when it financed properties including Vornado Realty Trust’s $500 million acquisition of the 840,000-square-foot office tower at 330 Madison Ave.
There are two caveats here, though. CONTINUE READING
CRE INDUSTRY GROUPS APPLAUD OUTCOME OF TAX BILL
'Huge Victory' for Sector Seen Mainly in Preserving, Expanding Existing Tax Benefits of Commercial Property Ownership
DECEMBER 20, 2017 | By Randyl Drummer | Original Content of Costar News
Late changes to the Tax Cuts and Jobs Act, the first major overhaul of the U.S. tax code in more than 30 years, further sweetened a deal already loaded with benefits for commercial property owners as earlier concerns gave way to full-throated praise for the final bill Wednesday by groups from virtually every corner of the CRE industry.
The Republican-controlled U.S. House of Representatives gave final approval to the $1.5 trillion legislation Wednesday, sending the bill to President Donald Trump for his signature. The Senate passed the bill by a partisan vote of 51-48 in the early hours, and the House followed suit by approving it for the second time in two days after a procedural mishap forced another vote... CONTINUE READING
PRIVATE CRE, PUBLIC EDUCATION DEVELOPMENT AMONG CONSTRUCTION SPENDING HIGHLIGHTS
Private construction provided a bright spot, on both year-to-date private residential and non-residential spending, a report from the Associated General Contractors of America showed.
DECEMBER 7, 2017 | By Gail Kalinoski | Original Content of Commercial Property Executive
Aided by increases in private commercial real estate and public educational development, overall construction spending reached a record high in October, according to the Associated General Contractors of America. However, the Arlington, Va.-based association noted public-sector investments in infrastructure continued to lag behind earlier levels, according to an analysis of new government data.
Association leaders said federal, state and local officials need to address the growing shortfall in transportation, water and wastewater infrastructure spending. “It is essential to increase the nation’s investment in roads and other transpiration facilities to keep the economy growing. And investment in safer highways, drinking water and wastewater systems are important for public safety and health,” Stephen Sandherr, the association’s CEO, said in a prepared statement...CONTINUE READING
FEDS SEE SMALLER MULTIFAMILY FINANCE MARKET IN 2018
FHFA Lowers 2018 Multifamily Lending Caps for Fannie Mae and Freddie Mac
DECEMBER 5, 2017 | By Mark Heshmeyer | Original Content of CoStar News
Following two years of increased originations, the Federal Housing Finance Agency (FHFA) is lowering its projections for the multifamily lending market in 2018.
FHFA, which oversees Freddie Mac and Fannie Mae, announced that the 2018 multifamily lending caps for each government-sponsored enterprise will be $35 billion. That is down from $36.5 billion in 2017. The 2018 limit returns to the same lending cap set in 2015 and reflects the FHFA's expectations that the overall size of the 2018 multifamily originations market will be slightly smaller next year.
In fact, the nation's largest 25 banks have already cutback on multifamily lending. The amount of multifamily loans on their books has shrunk $3.3 billion through Nov. 22 since the end of July, according to Federal Reserve data... CONTINUE READING
CRE INDUSTRY FOCUSED ON TAX CUTS FOR 'PASSTHROUGH' ENTITIES AS TAX REFORM ENTERS FINAL STRETCH
Apparent Victory for Commercial Property Owners as First Major Tax Overhaul in Three Decades Speeds Toward Completion
December 4, 2017| By Randyl Drummer | Original Content of CoStar News
The U.S. Senate and House of Representatives have started work to reconcile differences between their two tax bills, including the timetable for reducing the corporate tax rate from 35% to 20%.
Of special interest to commercial real estate investors is how the final legislation will tax so-called "pass-through" entities such as sole proprietorships, partnerships, limited liability companies and S corporations. Tax treatment of pass-throughs is among several differences between the two bills with regard to businesses.
Senate Republicans early Saturday passed a hastily crafted $1.5 trillion overhaul of the tax code on a party line vote of 51-49, with only Bob Corker R-TN, breaking party ranks to vote against the final draft of the bill... CONTINUE READING
WHICH COMPANIES CARRY THE HIGHEST VALUE IN LEASES FOR US OFFICE AND INDUSTRIAL REAL ESTATE?
Updated - Analysis of Top 1,000 US Leaseholders Representing $135 Billion in Rent Value Confirms Rapid Ascent and Influence of Tech Tenants, Importance of Govt. Occupiers to CRE Landlords
November 30, 2017 | By Randyl Drummer | Original Content of CoStar News
The top 1,000 corporate, government and institutional occupiers in the U.S. hold leases worth an aggregated rent value of more than $135 billion, encompassing just over 8.4 billion square feet of office, industrial and flex space across about 115,500 properties, according to a recent analysis of CoStar Group tenant data.
The study ranks occupiers by the current value of rents paid across their U.S. real estate portfolios in CoStar's database. Total rent value was calculated by multiplying the space occupied by tenants in each building by the estimated rent value per property in the U.S. and providing a total lease value for each occupier across markets... CONTINUE READING