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Jeff Erxleben interest rates built to rent quote

Build-to-Rent (BTR) Property Type Offers Positive Demand Outlook

by Sarah Daniels June 9, 2022

By Jeff Erxleben, president, debt & equity at Northmarq Liquidity and an incredibly positive outlook for single-family build-to-rent (BTR) properties is helping to offset some of the turbulence developers are experiencing from rising interest rates. Developers have been ramping up the pace of single-family BTR construction over the past five years with forecasts that call for a record high 60,000 new units to be completed in 2022. That volume shows a steady increase over the 53,000 units completed in 2021 and 49,000 in 2020, according to Northmarq’s recently released Single-Family Build-to-Rent Properties Special Report. Although financing across all property types has been impacted by upward movement in both short- and long-term borrowing rates, the BTR sector is in a good position to shake off those challenges and maintain its growth momentum. Higher construction and financing costs are being offset by rising rents with year-over-year rent increases, that in many areas of the country, are quite substantial. Developers also are finding good access to both debt and equity. The number of lenders that are active in the space is expanding as developers move into new markets and continue to prove out business models and performance with successful lease-up and dispositions. For …

June 9, 2022

Content Partner Features Leasing Activity Midwest Mixed-Use NAI Northeast Restaurant Retail Southeast Texas Western

Which Way is the Retail Pendulum Swinging?

by Sarah Daniels June 2, 2022

Although the pandemic wreaked havoc on the retail sector in general, the culling of weak concepts has left space for strong retailers to flourish. The retail industry is seeing an explosion in experiential retail, medical/dental space is ubiquitous and non-traditional tenants are jumping at opportunities to secure prime locations. As a result, shopping centers have proven very resilient, says George Macoubray, vice president of retail brokerage with NAI Elliott in Portland, Oregon. “Today’s centers continue to evolve and to address what consumers need in terms of a place for people to congregate and participate in the activities that are important to them.” The entertainment sector was hit hard by the pandemic, he notes. “But now those operators seem to be out looking for locations, and they’re seeing the light at the end of the tunnel. People want to gather. They want to be entertained. They want to go out and do activities. Those kinds of experiences are happening more and more often in shopping centers — and you can’t buy those activities on Amazon.” Exciting new in-person experiences are helping to elevate shopping centers. “There’s an influx of experiential retail. From golf simulator experiences to ping-pong places to axe-throwing activities, …

June 2, 2022

Content Partner Features Loans Midwest Multifamily Northeast Southeast Texas Walker & Dunlop Western

Small Balance Multifamily Mortgage Lending Approach Requires Education, Tech, Creativity in Structuring Loans

by Sarah Daniels May 26, 2022

Capitalizing on a changing marketplace and employing technology to streamline processes are essential strategies in helping small balance clients meet their goals. Ana Ramos, managing director and regional production head at Walker & Dunlop, emphasizes the importance of speed, creativity and using technology to assist in mortgage lending processes. She also emphasizes the centrality of teamwork, company ethos and technology to put a big emphasis on small balance loans. Walker & Dunlop defines “small loan” as up to $15 million for multifamily properties with five or more units. These clients are usually composed of smaller individual investors who need attention and education when it comes to mortgage lending. “It’s really hard for a large producer to think small, but it’s really easy for small producer to think big,” Ramos says. “It’s difficult for producers who are accustomed to institutional lending, with its higher fees and complex vesting structures to consider the credit parameters that are necessary in small balance loans. Small loans is a niche type of mortgage lending, and it only works if you have a company within a company, like Walker & Dunlop with its dedicated small loan team that works together through application, underwriting and closing.” Tech’s …

May 26, 2022

Aaron Porter, NAI Global, Interest Rate Capital Markets group quote

Content Partner Features Healthcare Industrial Loans Midwest Multifamily NAI Northeast Office Southeast Texas Western

Rising Interest Rates and Inflation to Fuel Change in Property Markets

by Sarah Daniels May 24, 2022

Beginning in the fourth quarter of 2020, commercial real estate buyers and sellers moved off the sidelines and began fueling an impressive investment sales rebound as many pandemic-related lockdowns and restrictions eased or ended. The rush to purchase hard assets hit its apex a year later when commercial property sales surged to a record $362 billion in the fourth quarter of 2021 alone, according to Real Capital Analytics, a part of MSCI Real Assets that tracks property transactions of $2.5 million or more. The strong market is continuing this year: Deals of $170.8 billion closed in the first quarter, a year-over-year increase of 56 percent, Real Capital reports. Buyers in the first quarter also pushed up prices 17.4 percent over the prior year, according to Real Capital’s Commercial Property Price Indices (CPPI). But given rising interest rates and other recent headwinds, will investors continue to drive robust investment activity and bid up prices? The 10-Year Treasury yield has spiked some 150 basis points to around 3 percent since the beginning of 2022, and fixed 10-year mortgage rates of between 3 percent and 4 percent are up about 100 basis points. For short-term variable loans, the benchmark secured overnight financing rate …

May 24, 2022

Affordable Housing Bohler Build-to-Rent Content Partner Development Features Midwest Multifamily Northeast Single-Family Rental Southeast Texas Western

Build-to-Rent Planning and Entitlements: How to Avoid Challenges

by Sarah Daniels May 19, 2022

The build-to-rent (BTR) property type has gained significant traction in the commercial real estate market due to increasing interest from tenants, investors and developers. Developers moving into the BTR market before 2020 originally focused on this sector as an “in between” product for future home buyers who weren’t ready to commit to a single location but wanted additional space and amenities. The pandemic fueled tenants’ desires for more privacy and space without the long-term commitment of homeownership, which ignited growth in the sector. As costs for single-family homes continue to rise, the BTR niche also increasingly attracts would-be homeowners who are priced out of the homebuying market — and the growing demand for BTR properties draws the attention of more and more investors and developers. But not all stakeholders are immediately on board with development of BTR properties. The concept is rather new in some markets and local communities have questions about the zoning and operation of these hybrid communities, which are an intriguing mix of single-family concept and multifamily operations. Developers often need to educate municipalities about the BTR concept — and they need to plan BTR properties that work for the local community. This is where Bohler — a land …

May 19, 2022

Emergency Rental Assistance Program graph

Affordable Housing Arbor Realty Trust Content Partner Development Features Midwest Multifamily Northeast Southeast Texas Western

As Affordability Crisis Deepens, Policies and Market Shift to Assist the Underserved

by Sarah Daniels May 3, 2022

By Omar Eltorai, Arbor Realty Trust To understand the affordable housing market in spring 2022, one needs to first assess how this sector weathered the pandemic and then assess the current state of housing affordability across the country. In-depth findings on these trends are included in the Arbor Realty Trust-Chandan Economics Affordable Housing Trends Report, from which this article is excerpted. Weathering the Pandemic When it comes to the pandemic response, federal policymakers proved effective at defusing a large-scale increase in homelessness from financially insecure households. The Center for Disease Control and Prevention’s (CDC) eviction moratorium, while unpopular among industry advocates, prevented an estimated 1.6 million evictions, according to an analysis by Eviction Lab. After the Supreme Court struck down the federal moratorium in August 2021[1], the wave of evictions that many were forecasting did not immediately materialize. Nationally, tracked eviction filings ticked up but remained well below their pre-pandemic averages, according to Eviction Lab. A key reason why many at-risk renters have remained in their homes is the deployment of funds allocated in the Emergency Rental Assistance Program (ERA) — a funding pool designed to assist households that are unable to pay rent or utilities. The ERA Program was …

May 3, 2022

Content Partner Features Industrial Leasing Activity Lee & Associates Market Reports Midwest Multifamily Northeast Office Retail Southeast Texas Western

Lee & Associates’ First-Quarter 2022 Economic Rundown by Sector

by Sarah Daniels April 21, 2022

Lee & Associates’ newly released Q1 2022 North America Market Report scrutinizes first-quarter 2022 industrial, office, retail and multifamily outlooks throughout the United States. This class-by-class review of commercial real estate trends for the first quarter of the year focuses on how real estate is adjusting to long-term post-COVID attitudes. Lee & Associates has made the full market report available here (with further breakdowns of factors like vacancy rates, market rents, inventory square footage and cap rates by city), but the overviews offered below provide sweeping looks at the overall health and obstacles for four major commercial real estate sectors. Industrial: Rents Pushed on Strong Demand Strong demand for industrial space throughout North America continued in the first quarter as vacancies fell to record lows and rent growth hit double digits. First quarter net absorption in the United States totaled 92.8 million square feet, which was up 25 percent year over year but down 35 percent from the 143-million-square feet average of the last three quarters of 2021. Annualized rents rose 10.1 percent in the U.S. and the average vacancy rate fell to 4.1 percent. Part of this trend was due to a pause in new construction starts early in the pandemic. However, …

April 21, 2022

Lument Affordable Housing Multifamily buildings

Affordable Housing Content Partner Development Features Georgia Lument Midwest Multifamily Northeast Southeast Texas Video Western

Utilizing Tax Credits to Create Affordable Housing in High-Opportunity Communities

by Sarah Daniels April 19, 2022

The Section 42 Low-Income Housing Credit program has been America’s primary tool in the effort to construct affordable homes for low- and moderate- income households and ease renter cost burdens since 1986. This public-private partnership has created or preserved more than 3.1 million rental units, accounting for over 30 percent of the nation’s affordable housing stock. Congress is considering legislation that would materially expand and strengthen the tax credit program. In addition to several technical changes to tax credit accounting and rules governing the use of private-activity bond financing, the legislation would authorize increases in credit allocation in 2021 and 2022. The impact of these changes would be substantial, catalyzing construction of more than 100,000 additional units per year over a 10-year period, perhaps trimming the number of rent burdened low-income households by half. Building more affordable housing will represent a significant step toward reducing housing instability and economic inequality in America. But are quantitative gains alone enough? Constructing affordable housing in low-poverty, high-opportunity census tracts is challenging. The following discussion explores some ways in which developers, lenders and credit allocating agencies can increase the level of affordable housing construction in low-poverty, high-opportunity areas (LPHOA) and optimize the …

April 19, 2022

California Content Partner Features Industrial Retail Walker & Dunlop Western

Los Angeles Industrial, Retail: Overlapping Industries Adapting to Post-Pandemic Change

by Sarah Daniels April 14, 2022

As the pandemic recedes, unusual supply and demand trends have taken root in retail and industrial markets throughout the nation. Factors that caused upheaval even before the arrival of COVID — the changing face of retail due to e-commerce and the growing demand for industrial real estate — continue unabated two years past the pandemic lockdowns. Los Angeles County may act as a bellwether for the rest of the country in retail and industrial trends, especially in high-cost, high-density areas, where these two real estate types often compete for space. Bayard (By) Cartmell, senior director at Walker & Dunlop, Los Angeles, has extensive experience with commercial real estate in the Los Angeles area. He has seen unprecedented demand for industrial space and growing investor interest in retail cap rates in the Los Angeles area. Cartmell sat down with REBusinessOnline to talk about the outlook for industrial and retail in Los Angeles, their intersections and the sector trends he expects to see in the coming year. Los Angeles Industrial — High Demand REBusiness: What are you seeing in terms of demand for industrial space — particularly in Los Angeles? Cartmell: There is currently almost unlimited demand for industrial space, of any size, …

April 14, 2022

Outdoor Hospitality quote from Jesse Pine, NAI

Content Partner Features Hospitality Loans Midwest NAI Northeast Southeast Texas Western

Outdoor Hospitality Properties Draw Greater Investment Interest Following Rapid Growth During the Pandemic

by Sarah Daniels March 29, 2022

Where do people go to “get away from it all” — especially when the world shuts down? Many seek relaxation and recreation in the great outdoors. Interest in camping — especially the subset of high-end camping often referred to as “glamorous camping” or “glamping” — grew steadily in the years before the pandemic. The arrival of COVID and the desire for socially distanced vacations created a rapid increase in demand and revenue. The result for commercial real estate has been a large increase in the number of investors interested in outdoor hospitality properties. “Before 2020, the trend was already very strong; the pandemic just accelerated it,” says Sean Wood, associate broker at NAI Outdoor Hospitality Brokers. Wood cites the Kampgrounds of America (KOA) 2021 Annual North American Camping Report: “From 2014 to 2018, there was consistent growth of about 2 million new households per year getting into camping across North America. From 2018 to 2019, we saw a jump from 39.2 million to 41.9 million households that went camping. And then in 2020, we saw an explosion in interest: from 41.9 million households to 48.2 million households camping each year.” The specialists at NAI Outdoor Hospitality Brokers expect this renewed …

March 29, 2022

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