Distressed commercial real estate is slowly climbing down from the heights it reached in October 2010, of $191.5B. Forthcoming figures by Delta Associates and Real Capital Analytics will show that distressed commercial real estate in the US totaled $166.9B in January 2012, down $4.7B since October 2011… attributed to a mix of circumstances, starting with extend and pretend…
See the whole article here: Globe St.com: Distressed CRE Continues to Ebb
“Not all residents want the same thing,” Conway says. “Listening to what our consumers want and wrapping them in a brand is going to help us grow.” AvalonBay hopes to attract younger consumers to its metropolitan “AVA” buildings… designed to be more youthful than other high-end AvalonBay buildings because they’re targeted to Gen Y residents, many of whom live with roommates in smaller, urban-style apartments.
Are your properties targeting specific demographics? Could you attract more tenants by marketing to a specific lifestyle? See the whole MFE article here: AvalonBay Launches Brands for Gen Yers, Suburbanites
Feb. 13 (Bloomberg) — Construction of multifamily units will lead the U.S. building industry again this year, allowing housing to contribute to growth for the first time in seven years, according to economists Michelle Meyer and Celia Chen.
Work will begin on about 260k apartment buildings and townhouse developments in 2012, up 45% from last year and the most since ’08, according to Meyer, a senior economist at Bank of America Corp. in New York. Chen, an economist at Moody’s projects a record 74% jump to 310k.
Homeownership rates, which have declined to the lowest levels since ’98, may keep dropping as the foreclosure crisis turns more Americans into renters. In addition, household formation will probably accelerate as an improving economy and growing employment embolden more people to stop sharing residences and strike out on their own.
“Given the ongoing shift from owning to renting, there is increasing demand for multifamily construction,” Meyer said in an interview. See the whole Bloomberg piece here: Foreclosures are transitioning people out of ownership
A recent report from New York–based commercial real estate research firm Real Capital Analytics (RCA) reveals that apartment sales figures closed out 2011 on a positive note. The firm’s “2011 Year in Review” report shows that the fourth quarter of 2011 netted $16.6 billion in sales, the highest quarterly volume racked up since 2007. This marks a 16 percent increase from the previous quarter and a 24 percent bump from fourth-quarter apartment sales in 2010. Among the more optimistic data revealed in the report was the rebound of garden-sector sales.
Garden properties ended up 47 percent ahead of the 2010 figures, and it appears that the sales momentum experienced in the fourth quarter will carry over into the first quarter this year. “Given the stable cap rate environment for garden properties, compared to sinking caps in mid-/high-rise, that trend is likely to continue in 2012,” projects Thypin.
See the whole AHF article here: Apartment Sales Close Out 2011 on the Rise
See the report here: http://bit.ly/xm8uUG
From WSJ Developments-
Little new apartment construction and surging demand has created a shortfall of 2.5 million units, the largest the nation has seen in more than a half-century, according to research from Nareit, a trade group for real-estate investment trusts.
As we’ve reported, apartment landlords are seeing vacancy rates decline as more Americans rent by choice or necessity. In the fourth quarter, apartment vacancy fell to the lowest rate since late 2001, with the national rate dropping to 5.2% from 6.6% a year earlier, according to Reis Inc. The vacancy rate had risen as high as 8% in 2009.
Pent-up demand could pull that rate even lower. According to Nareit, the normal rate of household formation is about 1.2% annually. But, with the sour economy in the last four years, the rate plunged to about 0.5%, as people delayed moving out and opted to live with roommates and parents longer. This has created an unmet demand of about 2 million households, “about three times what it has been in previous business cycles,”… See the whole article here
A common theme adopted by the industry is that lenders continue to delay action on distressed assets for as long as possible.
The fact is that this scenario is borrower-specific. If a borrower is acting in good faith, the lender may allow the asset to continue operating, resulting in a commercial property “Twilight Zone.”
The Twilight Zone is made up of properties on which loans have defaulted or in which default is likely imminent, but the borrower is still willing to provide all available cash flow to the lender, even if it is not enough to cover the payments. The lender agrees to accept net rents and, in turn, keeps the building operational, albeit in a limbo period.
When the lender does finally pull the plug value opportunities can Continue reading The #Multifamily Asset Twilight Zone: In default but payments still being made. Opportunity or? Via @rshall03
Great advice from Barry Sternlicht plus much, much more on real estate, investment, capital, leadership, opportunity, Europe, China while speaking at the Schack real estate conference. He is one very smart guy while being personable and humble, a rare but valuable combination. Reminds me a bit of my virtual mentor Tom Barrack, and not just because of the haircut! Barry even mentions wanting to learn how to surf, something Tom could definitely help with.
Here’s the link to the video: Barry Sternlicht at Schack RE Conference For more great video from the conference Continue reading Find the freight trains in your life and get on them instead of in front of them.- Barry Sternlicht Video via @Michael_MBA
In his Q4 report on the Seattle multifamily market ARA’s Jim Claeys says:
Vacancies and Concessions UP
Absorption and Rents DOWN
New Construction Pipeline UP 140% from year ago
Also Home and Condo Sales UP 41, 70% respectively
Sounds kind of like the cycle is moving to the next phase doesn’t it? See the whole article here: This may be a good time for developers to reassess their projections
“It’s a huge help,” says Jonathan Camps, managing director of production for Washington, D.C.-based Love Funding.
In the past, any loan of at least $15 million, or any deal of more than 150 units, had to go through the FHA’s National Loan Committee. That threshold has been dialed up to $25 million, or 250 units.
What’s more, any existing FHA-insured loan looking to refinance through the Sec. 223(f) program no longer needs to go through either the regional or the national loan committee.
Good news indeed! See the whole article here: FHA Streamlines Multifamily Loan Approvals
