Archives by: John Bergin

Class B Offers Choice Investments

They may not be the prettiest of properties, but B and C developments can yield attractive returns. Read full story. Read more

Eurozone leaders back Greek rescue plan

German Chancellor Angela Merkel, French President Francois Hollande and Greek Prime Minister Alexis Tsipras have hammered out a rescue agreement for Greece that is unanimously supported by other eurozone leaders. European Council President Donald Tusk tweeted that a rescue program is ready and includes "serious reforms [and] financial support." Read full story   Read more

IMF reiterates call for Fed to delay interest-rate hike

The International Monetary Fund called on the Federal Reserve to delay raising interest rates until next year, warning that premature action could undermine the U.S. economy. The Fed has been signaling an increase this year, with strong June employment numbers strengthening its hand. Read full story   Read more

Greek Debt Crisis: Bad News for Greece, Good New for U.S. Real Estate?

U.S. real estate economists say the possibility of a “Grexit” will not have any substantial impact on commercial real estate investment in the U.S., and if it will, the impact is likely to be positive. Read full story Read more

Fed cuts economic-growth forecast but plans rate increase

Federal Reserve officials said they expect slower growth in the economy than previously anticipated but indicated they still plan to raise interest rates in coming months. Policymakers predicted the U.S. will have its lowest annual growth since 2011. The central bank left its key interest rate close to zero. Read full story Read more

Q1 GDP contracts 0.7%

The U.S. economy contracted an annualized 0.7% in the first quarter, according to the Commerce Department, which had estimated 0.2% growth. Reasons for the decline include a bigger trade gap, slower consumer spending and harsh winter weather. Economists expect 2% expansion this quarter. Read full story Read more

Yellen, Cleveland Fed chief see rate hike in the offing

The Federal Reserve will begin raising rates this year if unemployment continues to fall and inflation moves up, Chairwoman Janet Yellen said Friday. It will be several years before the federal funds rate would return to a normal, longer-run level, she said. Loretta Mester, president of the Cleveland Fed, said Monday that rising inflation and strong employment growth are creating the conditions for the U.S. economy to support higher interest rates. Read full story Read more

Multifamily Developers Favor Downtown, But Suburbia Holds Its Own

In the midst of the Great Recession, vacancy in the multifamily sector hit a cyclical high of 8.0 percent. Over the next several years, the vacancy rate nearly halved, reaching 4.1 percent in early 2014. Vacancy now stands at 4.2 percent as of the end of the first quarter, where it has plateaued for 12 straight months. Read full story Read more

Investment managers urge REIT investors to stay the course

REITs have been one of the best-performing asset classes for the last several years, with the S&P Global REIT posting nearly 140% in returns since March 2009. However, there are fears that the expected rise in interest rates will slow momentum and cause investors to flee. Investment managers such as Wells Fargo and State Street are advising shareholders to stay put as REIT fundamentals will remain strong. Read full story Read more

Report: U.S. wages fall short of rent costs

Workers earning the state or federal minimum wage cannot afford a market-rate one-bedroom apartment in any state in the U.S. unless they work 86 hours per week, finds a report from the National Low Income Housing Coalition. The average U.S. hourly wage falls $4 short of the amount needed to work full time and afford a two-bedroom apartment. Read full story Read more

Fed officials say June is too soon to raise rates

Most Federal Reserve policymakers said at last month's meeting that June would likely be too soon to start raising interest rates, minutes show. Officials predict a rebound after the slow start to the year, and most are ready to raise rates once data confirm that the economy is on solid ground. Read full story Read more

Commercial real estate sales jump 45% in first quarter

Commercial real estate transactions rose 45% in the first quarter by dollar volume, reaching $129 billion, according to Real Capital Analytics. Deals in the pipeline for the second quarter suggest it will wind up being one of the largest on record, the firm said. The competition for properties is making it difficult to acquire single assets, insiders say. Read full story Read more

3 Things That Have Changed the Industry Over the Past 20 Years

Multifamily experts weigh in on what they believe has changed the apartment rental industry for both better and worse. Read full story Read more

10-year Treasury yield rises amid global selloff

Yield on 10-year Treasurys hit a six-month high today as the rout in global debt markets continues. Goldman Sachs attributes the trend to overblown expectations for the European Central Bank's quantitative-easing program. Read full story Read more

Cap Rate Variations

Everyone in real estate knows how to calculate a cap rate — or do they? Read full story Read more

U.S. office deliveries outpaced demand in Q1

Delivery of new office space, totaling 15 million square feet nationwide, exceeded quarterly office demand in the first quarter of 2015, according to CoStar office market data. Total net absorption registered just over 12 million square feet. Read full story Read more

CoStar Group Buying Apartment Finder to Pair With Apartments.com

CoStar Group announced an agreement to acquire Apartment Finder and pair the apartment listing website with its Apartments.com service, operating the online brands as separate, complementary services with both sites powered by CoStar's multifamily information. Read full story Read more

CBDs: The New Low-Barrier-to-Entry Multifamily Markets

Downtown areas can be difficult places to build apartments simply because there is limited land for new construction projects. But in recent years, developers have been highly motivated to overcome the barriers to build downtown, where their new communities can be within walking distance of jobs, shopping and transportation. City governments have also seized the opportunity to bring new economic activity downtown and have added incentives to build. Read full story Read more

First Quarter Rent Growth Highest Since 2006

Jay Denton from Axiometrics takes a guest turn on our site to look at how, coming off a stronger-than-expected 2014, the apartment market continued its upward trend to start 2015. Read full story Read more

M&As will continue to define the REIT industry, experts say

Mergers and acquisitions will continue to characterize the REIT industry, according to speakers at the NYU Schack Institute of Real Estate's annual REIT symposium. Factors driving the trend include the rise of activist investors and a surge in investor interest in commercial real estate. With new entrants to the industry, however, the overall number of REITs could stay largely the same, said Michael Kirby, chairman of research firm Green Street Advisors. Read full story Read more

CMBS Delinquency Rate Stopped Falling in March

The improvement in the CBMS market faced a small roadblock in March, as the delinquency rate for CMBS loans stopped falling after four consecutive months of decreases. Read full story Read more

Fed edges closer to raising rates

The Federal Reserve signaled an increased likelihood of raising interest rates but said it has a less optimistic view of where the U.S. economy is headed. The policy committee said economic expansion has slowed due to a sluggish housing market and feeble export growth. The Fed said it won't raise rates in April. Read full story Read more

For Foreign Investors, U.S. Assets Are Attractive and Challenging

Now that the United States economy is back on its feet, and the U.S. is once again proving to be a safe investment in the midst of a volatile world, foreign investors are investing billions of dollars in real estate here. The continuing influx of foreign money—including Chinese, Korean, Japanese, European, Mexican and Canadian buyers—is not only creating competition for key assets, especially in the gateway markets, but is presenting new transactional challenges for foreign buyers, particularly when it comes to due ... Read more

Chain Retailers’ Store Opening Plans Remain Healthy, RBC Report Shows

It seems that in spite of a recent spate of bad news from some mid-market retailers, the retail sector overall continues on a stable course, according to the March “National Retailer Demand Monthly” report from RBC Capital Markets. Read full story Read more

More Demand, Less Supply for Student Housing in 2015

The student housing business faced declining college enrollment in 2014. At the same time, developers finished more purpose-built student housing properties than ever before. But these new student housing communities leased up very quickly anyway. Read full story Read more

10 Cities With Skyrocketing Rent

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Cap Rate Limbo: How Low Can They Go?

Already at historic lows, cap rates may yet be pushed lower this year amid an overheated investment environment. Read full story Read more

America’s Fastest-Growing Cities 2015

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Apartment Sales Up 42% in January

2014's apartment sales momentum continues into 2015 as equity funds increase their stake in the market. Read full story Read more

Loan Maturities Loom for Multifamily Financing

Despite the mountain of loans coming due this year, the market more and more belongs to the borrower. Read full story Read more

SEC, S&P reportedly in talks about CMBS suspension

McGraw Hill Financial is negotiating with the Securities and Exchange Commission to keep unit Standard & Poor's from being suspended from rating commercial mortgage-backed securities, a source says. The SEC reportedly is seeking to suspend S&P because of allegations that it doctored ratings in 2011 to obtain business. Read full story Read more

Construction of 405,000 apartments is expected in 2015

Developers will likely begin building 405,000 apartment units next year, according to the 2015 Dodge Construction Outlook. Developers are betting on strong demand as the employment landscape improves and new households form. "Financing for construction projects is becoming more available, reflecting some easing of bank lending standards, a greater focus on real estate development by the investment community and more construction bond measures getting passed,” said Robert Murray, chief economist and vice president of Dodge Data & Analytics. Read full story Read more

New CMBS delinquencies decline in Jan.

New delinquencies of commercial mortgage-backed securities totaled $274 million in January, less than half of December's $554 million, said Fitch Ratings. Total outstanding Fitch-rated delinquencies stood at $17.9 billion in January. Fitch expressed concerns for the higher levels of credit enhancements for new CMBS. Read full story Read more

Fed expresses reservations about hiking interest rates

Federal Reserve officials said the recovery of the U.S. economy is too fragile to risk by raising interest rates. According to minutes of their January policy meeting, officials fear that a premature increase could dampen economic growth so much that the central bank would have to reverse course and return stimulus programs. Read full story Read more

Pension funds seek more real estate but remain wary of risk

Real estate's high yields and strong fundamentals have pension funds looking to increase their allocations. Many are focused on core assets in primary markets and are cautious about potential risk in other markets. With demand already high for core assets, that preference presents a challenge when it comes to yields, however. Read full story Read more

Oil Price Declines: Lessons Learned Should Be Bigger Than Texas

Recent volatility in oil prices is an abrupt reminder to real estate investors of how quickly markets outside of commercial real estate can change. It is clear there are risks to being complacent, even in an asset class with longer-term return characteristics, when conditions can change quickly. Read full story Read more

Class C Market Grows Tense

Many of you have read about, and experienced, the current multifamily investment frenzy as we continue to learn of new Class A developments on almost a daily basis. Read full story Read more

Switzerland shocks markets by abandoning franc cap

The Swiss National Bank has scrapped a 3-year-old limit to keep the franc at 1.20 per euro. The move stunned markets and sent the franc soaring against the euro. "It has taken the market by complete surprise," said Jonathan Webb, head of foreign exchange strategy at Jefferies. Read full story Read more

More Foreign Capital to Pour into U.S. CRE Sector in 2015

Continuing a trend that has been a major theme for the U.S. commercial real estate industry in 2014, the vast majority of foreign investors plan to step up their acquisition activity stateside in the year ahead, according to the Association of Foreign Investors in Real Estate’s (AFIRE) annual survey. The survey, completed in the fourth quarter, found that 90 percent of respondents planned to maintain the same level of investment in U.S. properties that they had in 2014, or increase it. Read ... Read more

U.S. property continues to appeal to foreign investors

Ninety percent of foreign investors plan to increase or maintain their allocations to U.S. commercial real estate this year, according to the latest survey by the Association of Foreign Investors in Real Estate. The five most popular U.S. cities for investment are New York, San Francisco, Houston, Los Angeles and Washington, D.C. However, global interest in D.C. continues to decline, according to the survey. Read full story Read more
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