CRE | Ashworth Partners

Update on the 10yr Treasury rate which drives Multifamily, Commercial Real Estate and Home loan rates.

In the Analysis on Tapering QE3 post Tuesday I included a chart of the US 10 year Treasury rates and you could see them going vertical in the days since the Fed announcement and Bernanke’s press conference last week. We’re in the middle of negotiations on an apartment acquisition with a client and so what interest rates do over the next few days and weeks is extremely important to us. So here’s the updated chart:

10 year Treasury rate chart YTD 2013 — Click for full size image. *Treasury Yield Curve Rates, commonly referred to as “Constant Maturity Treasury” rates, or CMTs. This method provides a yield for a 10 year maturity even if no outstanding security has exactly 10 years remaining to maturity. More at www.treasury.gov

We concentrate on the 10 year Treasury because that is the benchmark most lenders base their long term rates on. In order to lure investors away from Treasuries to buy mortgage bonds lenders have to Continue reading Update on the 10yr Treasury rate which drives Multifamily, Commercial Real Estate and Home loan rates.

Apartment Building, Commercial and Residential Real Estate state of the market video from Tom Barrack of Colony.

Tom Barrack was on CNBC last week to talk about real estate with the traders. Great TB quote to open the show: “It’s always great to be the slowest guy on Fast Money”. There’s more wisdom in that statement than any of the show’s regulars understood.

A couple bullet points but definitely worth watching the video. The link on the image below goes to the Colony website where they edited the three segments together (commercial free too):

Housing [of all types] is the best opportunity. Today there might be a Fed bubble but there isn’t a housing bubble.
The rise in interest rates while not big and still low historically speaking, will hit entry level housing. 100bp (basis point, where 100bp = 1%) rise in interest rates will cost a borrower an extra $150+/- a month on their mortgage payment for a $200,000 home. That will keep more people renting.

Apartment Building Investment and single family — Click on the image to go to the Colony website video (no commercials)

Tom says the amount of pent up demand for new homes, existing homes, rentals and apartments is Continue reading Apartment Building, Commercial and Residential Real Estate state of the market video from Tom Barrack of Colony.

ULI Biz Barometer: Apartment building invesment sales vaulted last month, bouyed otherwise sagging #CRE sector.

The Urban Land Institute’s April Real Estate Business Barometer reports that apartment building investment sales were strong enough to pull the entire sector up from last month’s slump while CRE prices are at four year highs. Condominium sales are also at a 5-1/2 year high with strongly increasing prices.

“Overall, 65 percent of the key Continue reading ULI Biz Barometer: Apartment building invesment sales vaulted last month, bouyed otherwise sagging #CRE sector.

CBRE Research: Since 2010 population shifting towards urban but apartment building construction is outpacing growth in

… A number of major metros

CBRE Econometrics is out with a new report showing population growth trends in major US metros has shifted towards urban centers since 2010 but apartment building investors have been keeping pace (or exceeding it) with new construction. Author Gleb Nechayev, Senior Managing Economist lays it out nicely in a series of charts:

First Population Growth Average Change 2000- 2010

Population Growth in major Apartment Markets 2000 t0 2010 — source: CBRE Econometrics

Raleigh is the only metro with significant urban vs. suburban population growth. Note that one-county metros such as Continue reading CBRE Research: Since 2010 population shifting towards urban but apartment building construction is outpacing growth in

Back To The Future: A Brief History of Apartment Building Design

Mike Scott of Dupre+Scott Apartment Advisors gives a tour through the last hundred years or so of apartment building design. Plus ça change….

In the accompanying article (here) Mike talks with builders and developers about current trends in apartment design and amenities. Interestingly many of these changes provide a competitive advantage to Continue reading Back To The Future: A Brief History of Apartment Building Design

Latest Commercial RE and Apartment Building Investment Cycle Charts Posted by Glenn Mueller PhD.

…. “Only six markets advanced their position on the [Dividend Capital Apartment Market] cycle chart.” Once again with the notable exception of Seattle who has left in the basement of the cycle despite overwhelming evidence that it has moved well up in the cycle by his own definition. See my post from last quarter detailing the definitions and why Seattle’s apartment building investment cycle location according to Dr. Mueller is incorrect here. For other cities have a look and let me know if your markets are accurately placed:

Is it a Seattle thing? Is he the Brent Musburger of commercial real estate? Continue reading Latest Commercial RE and Apartment Building Investment Cycle Charts Posted by Glenn Mueller PhD.

Ashworth Partners Blog named a top Commercial Real Estate blog- Grateful

The Real Estate Investment site biggerpockets.com has named our apartment building investment blog one of the top commercial real estate blogs for the second year running. We are honored and thankful to be included with the CRE blogs named to the list: A Student of the Real Estate Game, Llenrock Blog and The Tenant Advisor.

Biggerpockets began publishing their top 35 List of Real Estate Blogs in 2006 and the list has generated over 100,000 views. Only ten of the original honorees still remain on the list, a statement to the hard work involved in building and maintaining a good blog and surviving tough times in the market.

At Ashworth Partners we’ll keep doing what we can to make sure the valuable time you spend here is well invested. We don’t have all the answers though so if you have a suggestion or comment about how to improve the blog we appreciate your feedback.

Apartment Building Investment Cycle Analysis via Dividend Capital. Can this be right?

Dividend Capital’s Q3 Market Cycle Monitor Report is out and naturally I looked at the apartment building investment cycle chart first. Specifically these days I’m looking to see where the author, Glenn R. Mueller Ph.D. has placed the Seattle market in the cycle.

In this latest report you can see that it is listed at position 2 with only Norfolk listed lower at position 1. What does position 2 signify? According to the good Doctor, position 2 lies in the Phase 1 – Recovery Quadrant defined as having “No New Construction” and position 2 specifically having “Negative Rental Growth”. But how can this be? Continue reading Apartment Building Investment Cycle Analysis via Dividend Capital. Can this be right?

The State of US Commercial Real Estate, Single Family and Apartment Building Investment Markets. By Tom Barrack, Colony Capital

Tom Barrack of Colony Capital on what’s really happening in US real estate from an investor’s perspective. The clearest, most cogent look at the state of commercial, multifamily and single family markets today and where the opportunities are. The first five and a half minutes is about Europe and the bottom line there is don’t but after that it is all gold. If Tom wanted to be one of those real estate ‘gurus’ he could package this video with a big notebook and some advertising and sell it for $10,000- and it would be better than any of the other stuff out there. And you get it for free. I’ve watched three times and get an extra little nugget each time.

The state of real estate in the US, commercial, single family and apartment building investment — Click on the image to view the Bloomberg video.

The big takeaway for me is that (temporarily at least) Continue reading The State of US Commercial Real Estate, Single Family and Apartment Building Investment Markets. By Tom Barrack, Colony Capital

ULI: Seattle most attractive market for Apartment Building Investment but there are 36,000 units just completed, under way or in the pipeline.

Two quick links- you decide. From the Seattle Times: Urban Land Institute finds Seattle among most attractive real-estate markets and from Dupre + Scott ( The leading Seattle area apartment market research firm): Apartment development pipeline (video)

When I see this:

And then I see this: Continue reading ULI: Seattle most attractive market for Apartment Building Investment but there are 36,000 units just completed, under way or in the pipeline.