Archives by: John Bergin

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

Apartment Construction Boom Slowing Rent Increases as Market Shifts Into Expansion Phase

With construction on new apartments back in full swing and vacancy rates beginning to trend upward, the robust rent increases enjoyed previously by landlords in most U.S. metro areas are expected to decelerate to below 2% in 2015 as the multifamily market shifts from full recovery into an expansion phase. CoStar Group economists are forecasting that apartment vacancy rates will rise in 46 of the 54 top U.S. metros over the next four quarters due to the massive wave of current... Read ... Read more

CMBS market hit by rating suspension, downgrade

Reports of the Securities and Exchange Commission's possible suspension of Standard & Poor's rating abilities for commercial mortgage-backed securities and Moody's Investors Service's downgrade of a planned issuance could slow the CMBS market in the coming year, according to industry analysts. While low interest rates and climbing property values hold promise for the market, which has regained strength in recent years, risks exist. 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

Condo Comeback?

It’s not like it's 2005, but, suddenly, for-sale multifamily is making sense again. Read full story Read more

Chasing Yield: The 2015 Dealmaking Outlook

As cap rates continue to fall, investors are pushing for returns in five key areas heading into the new year. Read full story Read more

U.S. GDP posts stronger-than-expected 3.9% growth in Q3

Gross domestic product rose by a seasonally adjusted annual rate of 3.9% in the third quarter, the Commerce Department reports -- up from an earlier estimate of 3.5%. Consumer spending and inventory investment were stronger than previously thought, offsetting weaker export estimates. Some economists had expected a downward revision of third-quarter GDP. Read full story Read more

Class C Market Grows Tense as Prices Rise

The product's growing popularity may press buyers to seek yield in riskier markets and assets. Read full story Read more

Central bankers acknowledge downside of low rates

Six years of low interest rates have had worrisome consequences, including sparing governments from fixing their economies, hurting savers and increasing volatility, traders and central bankers say. Despite that, the world needs interest rates to remain flat, they say.  Bloomberg (11/7) Read full story Read more

Sales of Newly Built Apartments Hint at Speed of Cycle Maturity

As supply climbs to its peak, price per unit in primary markets is decelerating more quickly than in secondary markets. Read full story Read more

Cap Rates Hit Record Lows in 3Q

Overall cap rates are at 5.9 percent; for mid- and high-rises, they've shrunk to just 3.6 percent. Read full story Read more

U.S. homeownership continues to decline

The U.S homeownership rate continues its downward trend, even as the economy improves. The latest Census Bureau figures show the rate fell to 64.3% in the third quarter. As a result, the rental market is surging. The New York Times (tiered subscription model) (10/31) Read full story   Read more

Report: REITs are driving CRE transactions

Commercial real estate transaction volume in the US increased 16.4% Y/Y for the first 7 months of 2014, up to $204.5B. REITs are driving much of this activity. Read Full Story Read more

Real Estate Institutional Assets Reach $1Trillion

Assets held by institutional real estate money managers rose 13.7% to $1.003T. It was the second time that assets reached $1T, and the first time since 2008 Read Full Story Read more

Denver Leads List of Top 10 Quarterly Rent-Growth Markets

All 79 markets that Reis tracks saw rent increases in the third quarter, but these 10 stood out from the pack. Read full story Read more

Fannie, Freddie, FHFA, lenders work on mortgage deal

Fannie Mae, Freddie Mac, the Federal Housing Finance Agency and lenders are working on an agreement that would expand access to mortgages. The deal "would allow credit to flow more freely to lower- and middle-income households," said Mark Zandi, Moody's Analytics' chief economist. "That's vital to getting the housing recovery moving forward." Reuters (10/17), The Wall Street Journal (tiered subscription model) (10/17), Bloomberg (10/17) Read full story   Read more

U.S. posts strong output, jobs numbers

Production at U.S. factories, mines and utilities jumped 1% last month for the biggest gain in nearly two years while initial claims for jobless benefits plunged to a 14-year low last week. The data reinforced other figures pointing to an improving economy but contributed to a mixed picture overall, including weak retail sales data reported a day earlier. Reuters (10/16) Read full story Read more

CMBS projected to reach $100B this year

The U.S. commercial mortgage-backed securities market is expected to post $100 billion in originations for 2014, an important post-financial crisis milestone. Despite market fluctuations, demand for these securities remains strong, CREFC CEO Steve Renna says. GlobeSt.com (10/16) Read full story Read more
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