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
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
SEC, S&P reportedly in talks about CMBS suspensio...
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
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 …
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
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
Pension funds seek more real estate but remain wary of...
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
Oil Price Declines: Lessons Learned Should Be Bigger T...
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
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
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
More Foreign Capital to Pour into U.S. CRE Sector in 2...
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 …
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. …
Apartment Construction Boom Slowing Rent Increases as ...
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 …
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 …
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 …
Condo Comeback?
It’s not like it’s 2005, but, suddenly, for-sale multifamily is making sense again. Read full story
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
U.S. GDP posts stronger-than-expected 3.9% growth in Q...
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
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
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
Sales of Newly Built Apartments Hint at Speed of Cycle...
As supply climbs to its peak, price per unit in primary markets is decelerating more quickly than in secondary markets. Read full story
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
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
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
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
Denver Leads List of Top 10 Quarterly Rent-Growth Mark...
All 79 markets that Reis tracks saw rent increases in the third quarter, but these 10 stood out from the pack. Read full story
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) …
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
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
Consumer spending gives strength to U.S. economy
Consumer spending is on the upswing in the U.S. and will likely keep the economy solid even as global growth slows, economists say. Low gas prices and low borrowing costs will likely keep consumers spending in the near term. Bloomberg (10/14) Read full story
Capital from Self-Directed IRAs Flows to Real Estate
Individuals with self-directed IRAs are adding to the abundant capital flowing into commercial real estate investments these days. Read full story
CalPERS is increasing its real estate investments
Real estate has risen to 9.9% of investments for the California Public Employees’ Retirement System, up from 8.7% as of July 31, according to documents. The largest U.S. pension fund plans to increase that to 11% in fiscal year 2016. Its focus is on fully leased office towers and multifamily properties in large cities, which CalPERS says are safer investments than some of its …
Expectations for Rise in Rates Pummel REITs
REIT stock prices lagged behind the broader stock market as investors bet rates would rise over the next year Read full story
Draghi’s Case for Quantitative Easing in Europe [Forbe...
ECB announcing QE plans via purchase of private sector credit, covered bonds, and cutting interest rates. Read full story
Sept. 2014 US Economic & Housing Market Outlook &...
Strong demand for apartments among younger households has created ripe conditions for rental apartment development. Read full story
Cap Rates Fall to Historic Lows as Investors Chase Yie...
Cap rates fell to 4.4% in Big Six markets for Q2. Volume increasing in secondary/tertiary markets. Read full story
5 Reasons Occupancy is Growing Stronger [Multifamily E...
Even with 180k units coming online in the last year, occupancy & rent growth highest this century. Read full story
Millennials Maintain Multifamily Momentum—Spur Sustain...
Multifamily continues to be a hot sector based on rental demand from Millennials. Read full story
Demand for Apartments Proves Stronger Than Thought, Dr...
Good news for multifamily housing—demand for space is likely to be even stronger than experts estimated, helping the sector keep ahead of new construction for the immediate future, according to the Mid-Year Outlook 2104 from Freddie Mac Multifamily Research. “For a majority of the markets… new supply will continue to be absorbed as it enters the market and rents will continue to rise,” the …
