Heartland Feature Archive Archives - REBusinessOnline

A Winning Recipe for Office Conversions

Kristin Harlow — Tue, 19 May 2026 12:30:00 +0000

The number of underutilized office buildings being converted into apartment units continues to steadily rise, largely due to the acceptance that the post-COVID hybrid work format is here to stay. At the start of 2026, the national office-to-apartment conversion pipeline reached 90,300 units, up 28 percent year over year and nearly four times larger than in 2022, according to RentCafe, a sister company of Yardi Matrix. Office conversions now account for almost half (47 percent) of all planned adaptive reuse projects nationwide (roughly 90,300 apartments out of 193,900 planned projects). Behind New York City and Washington, D.C., Chicago ranks third on the list for the largest office-to-apartment conversions pipeline, according to RentCafe. Cleveland and Cincinnati round out the top 10. Five other Midwest markets — Detroit, Minneapolis, Kansas City, Milwaukee and St. Louis — are included in the top 20. These cities are deploying combinations of tax-increment financing (TIF), local tax abatements, Housing Trust Fund dollars and historic tax credits to support office conversions in their downtown districts, says Al Fiesel, commercial business unit leader at Chicago-based LJC Design & Engineering. “The specific tools differ by market, but the underlying premise recognizes that public participation is the mechanism that makes…

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Seniors Housing Industry Faces Predicament of Strong Demand, Limited Supply

Kristin Harlow — Tue, 31 Mar 2026 12:30:00 +0000

Supply and demand dynamics within the seniors housing sector are at a crossroads, according to the Emerging Trends in Real Estate 2026 report produced by PwC and the Urban Land Institute. Like most commercial real estate property types, new supply is constrained due to increasing financing and construction costs. However, demand for senior living units continues to grow. According to the report, factors driving demand for seniors housing include a rapidly growing older adult population and an increase in older adults renting. The 75-plus age category is expected to grow by more than 4 million people by 2030, according to U.S. Census Bureau projections. The oldest baby boomers turn 80 in 2026. The National Investment Center for Seniors Housing & Care (NIC) expects that the limited new supply and steady demand will drive the average seniors housing occupancy rate above 90 percent in 2026, potentially reaching the highest occupancy rate reported in the 20 years that NIC MAP has tracked this data. Investors are poised to achieve strong returns. The National Council of Real Estate Investment Fiduciaries (NCREIF), which tracks the performance of institutional-grade U.S. commercial real estate, reports that seniors housing strongly outperformed all other property sectors in 2025,…

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General Contractors: Early Collaboration Is Key in Today’s Market

Kristin Harlow — Thu, 12 Mar 2026 12:00:00 +0000

Builders have “dampened” expectations for construction activity in 2026, apart from data centers and power projects, according to the Associated General Contractors of America (AGC). Citing broader worries about the direction of the economy, the findings were part of the AGC/Sage Construction Hiring and Business Outlook Survey, which was released in early January. Kurt Steinmann, vice president and residential business unit leader at Swansea, Illinois-based Holland Construction Services, says “the market is clearly more disciplined than it was a few years ago, but that’s not a bad thing. “We’ve moved out of a speculative cycle and into one where projects need to be fundamentally sound to move forward,” he explains. “For general contractors, that means fewer starts overall, but stronger alignment on the projects that do proceed.” In other words, developments are better planned, more realistic on budgets and supported by experienced ownership groups. “Owners are moving forward with intention, prioritizing projects that are well-defined and aligned with long-term operational needs,” echoes Caitlin Russell, president of Davenport, Iowa-based Russell. “While interest rates and financing conditions continue to influence timing, demand for experienced general contractors who can provide cost clarity and early collaboration remains strong. Our outlook for the…

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Stars Are Aligned for Build-to-Rent Developers

Kristin Harlow — Tue, 02 Dec 2025 13:30:00 +0000

Higher rents and lower turnover are a few of the key advantages build-to-rent (BTR) properties have over traditional multifamily product, according to investors. Meanwhile, the sector continues to experience strong demand from tenants priced out of the housing market as well as renters by choice who prefer flexible, maintenance-free living. BTR units typically have all the perks of a single-family home — privacy, garages and yards — without the hassles of landscaping or property maintenance. “The BTR sector is experiencing significant growth because it addresses a genuine need in today’s housing market,” says Khrista Villegas, managing director of Material Capital Partners (MCP), a Charleston, South Carolina-based development and investment firm focused on BTR communities in the Southeast and Midwest. “Many prospective residents are moving away from traditional apartments, seeking the space, privacy and community feel of a single-family home without the commitment and burden of ownership. This trend is especially pronounced among millennials and Gen Z renters who value lifestyle flexibility, outdoor space and neighborhood connectivity — features that traditional apartments often lack,” explains Villegas. (Gen Z, the demographic cohort succeeding millennials, includes persons born between approximately 1997 and 2012.) Many millennials and Gen Zers are postponing family formation, but…

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Forecast Survey: What’s Your Take on Commercial Real Estate in 2026?

John Nelson — Mon, 24 Nov 2025 12:55:00 +0000

The editors of REBusinessOnline.com are conducting a brief online survey to gauge market conditions in 2026, and we welcome your participation. The survey should only take a few minutes to complete. Questions range from property sectors that you are most bullish on heading into 2026 to trends in deal volume to your outlook for interest rates. The results of our 15th annual survey will be compiled and published in the January issues of our regional magazines. Conducting these surveys is part of our mission at France Media to provide readers with indispensable information, and we couldn’t do it without your help. To participate in our broker/agent survey, click here. To participate in our developer/owner/manager survey, click here. To participate in our lender/financial intermediary survey, click here. (Note: Please remember to click on “done” to properly submit the survey.)

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Northern Nevada Retail Market Gains Momentum Heading Into 2026

John Nelson — Wed, 05 Nov 2025 12:59:00 +0000

— By Sam Meredith of Colliers — After a slow and uncertain start to 2025, the retail market in Reno and Sparks is finally finding its stride. The first half of the year saw many tenants hit pause on leasing decisions as economic jitters made retailers cautious. By the third quarter, however, the mood had shifted. Leasing activity picked up noticeably, and tenants are now back in the market, actively looking for space. That momentum is expected to carry through the fourth quarter and into 2026, with healthy absorption on the horizon. This turnaround is backed by solid market indicators. Net absorption turned positive in the second quarter, while asking rents rose quarter over quarter. Vacancies nudged upward due to big-box closures, including three Big Lots and a Joann store early in the year, but the overall retail vacancy still sits at a manageable 5.4 percent. In fact, several submarkets, including North Valleys, Northwest Reno, South Reno and Southwest Reno, are reporting vacancy rates below 2 percent, showing strong demand in key areas. Retailers are clearly taking notice. Trader Joe’s, which once considered Northern Nevada a one-store market, has now opened two additional locations in Spanish Springs and South Reno.…

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Competition Heats Up Among Retail Real Estate Buyers

Kristin Harlow — Thu, 16 Oct 2025 12:30:00 +0000

In JLL’s second-quarter “Retail Market Dynamics” report, “resilience” was the word used to describe the national retail investment landscape in the first half of 2025. Transaction volume reached $28.5 billion, a 23 percent increase over the same period a year ago. The figure also outpaces the long-term historical average of $27.7 billion for the first two quarters of the year, according to the brokerage firm. The scope of data includes all transactions $5 million and above for all retail asset subtypes. Retail investment sales brokers say there is plenty of capital flowing into the sector and more robust competition from institutional investors as of late. “We are seeing enhanced liquidity in the retail investment sales market from both an equity and debt perspective,” says Michael Neider, senior director with JLL Capital Markets in Chicago. “Total transaction volume is up in terms of deal volume and number of transactions, while cap rates are compressing.” Grocery-anchored and unanchored retail assets remain the most efficiently priced, but power center cap rates are compressing at a faster pace from their elevated levels, says Neider. “The spread between grocery-anchored cap rates and power center cap rates has narrowed from 166 basis points in 2023 —…

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Meaningful Modularity: Reconfigurability Is the Future of Flexible Construction

Kristin Harlow — Thu, 07 Aug 2025 12:30:00 +0000

By Dan Sullivan, Modwall Today’s need for agility in both work environments and commercial spaces stems from several factors, from evolving understandings of workplace strategy, to shifting tenant needs, and even the demand for the adaptive reuse of aging building stock. Driven in part by these developments, the concept of “modularity” has surged in popularity. But with all of the buzz, the true meaning of the term has become conflated with the concepts of demountability and reconfigurability. In common parlance, many prefabricated solutions are being marketed as modular, and thus assumed to be demountable or reconfigurable. And while they may, in fact, be manufactured off site, they are merely “prefabricated” and lack the flexibility to adapt to evolving space needs. Truly reconfigurable design and construction is something else entirely. It’s not just about building faster, but smarter. A system that’s truly reconfigurable isn’t just modular or prefabricated — it’s reconfigurable by design; primed for disassembly and reconfiguration, and simple enough to break down traditional labor barriers. These systems work to extend the life cycle of commercial interiors, reduce waste and ultimately yield spaces that evolve in real time alongside those that use them. Disassembly as the baseline With fluctuating occupancy…

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The Art of Alignment: How to Balance Stakeholder Interests in Multifamily Property Management

Kristin Harlow — Tue, 05 Aug 2025 12:30:00 +0000

By Diane Batayeh, Village Green To be successful at multifamily property management involves equal parts of communication, alignment and trust. There are several stakeholder groups to consider when making decisions about how best to operate and set up an apartment community for long-term success. Between residents, employees and owners, there are differing and sometimes conflicting objectives and perspectives to consider. In today’s quickly evolving multifamily landscape, satisfying everyone can be challenging and it requires a delicate balance to maintain all stakeholders’ satisfaction while also achieving their respective goals. With the right approach, however, multifamily executives can successfully navigate the wants and needs of all parties and effectively sustain their trust and satisfaction while positioning the property to achieve economic success. Fostering connections In multifamily property management, everything matters — from the property’s aesthetic appearance to the friendliness of onsite staff to the property’s digital identity and website navigation experience. These touchpoints are often referenced by both prospects and residents when evaluating their living experience, making it imperative to maintain and uphold a positive impression. To protect a property’s reputation and best serve residents, it’s critical to remain aware of their impressions through regular resident surveys that measure preferences and satisfaction…

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Why Fannie Mae, Freddie Mac Believe the Wind Is at Their Back

John Nelson — Tue, 15 Jul 2025 11:45:00 +0000

Fannie Mae and Freddie Mac are adopting a more pro-business approach when it comes to closing multifamily loans in 2025 than in recent years, when sources say they were more selective. The two government-sponsored enterprises (GSEs) combined to produce 33 percent more multifamily loans in first-quarter 2025 compared with first-quarter 2024. “There is definitely a ‘volume on’ mindset at both shops,” says Landon Litty, director of agency sales at BWE. “This is a real positive for borrowers.” For Fannie Mae, the volume of multifamily loans totaled $11.8 billion in the first quarter of 2025, compared with $10.1 billion in the first quarter of 2024. Meanwhile, Freddie Mac produced approximately $15 billion in multifamily loans in the first quarter, financing around 144,000 rental units, well above the approximately $10 billion produced in first-quarter 2024. “The first quarter of 2025 has been dynamic, with real-time adjustments to meet market needs while maintaining a focus on soundness,” says a spokesperson at Freddie Mac Multifamily. Other sources attest that the GSEs are focusing on their sponsors more so than in previous years. T.J. Edwards, chief production officer for the multifamily finance division at Walker & Dunlop, says the agencies are proactively vetting first-time borrowers…

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How AI Helps Streamline Apartment Operations

Kristin Harlow — Thu, 03 Jul 2025 12:30:00 +0000

Necessity has sparked innovation across the multifamily sector. Property managers are implementing new technology platforms to streamline leasing, maintenance and resident communications because of rising operating costs, says Jim Cunningham, president of Naperville, Illinois-based Marquette Management, which owns or manages nearly 16,000 units across eight states. Operating costs increased 7 percent last year, according to CBRE. Rising insurance costs are one of the primary drivers. Property managers are also embracing technology to enhance resident satisfaction. Wendy Deetjen, vice president of Habitat’s market-rate portfolio, says that today’s renters expect more convenience, personalization and instant communication than in the past. Chicago-based Habitat manages more than 13,000 units across Illinois, Michigan and Minnesota. “Reputation management and resident engagement remain critical, and while staffing challenges persist industrywide, automation helps our teams focus on what matters most — delivering excellent service and building stronger communities,” says Deetjen. The automation and problem-solving capabilities that come with artificial intelligence (AI) free up property managers to devote more time to other tasks. This advancement is especially beneficial at a time when the labor supply is low. Cunningham says that labor in multifamily management remains tight but is improving. The industry faced a 4.1 percent turnover rate in 2024,…

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Property Tax Rate Increases Will Further Erode Commercial Real Estate Values

Kristin Harlow — Thu, 17 Apr 2025 12:30:00 +0000

By Timothy Rye, Esq., Larkin Hoffman Across the country, local governments are struggling to maintain revenue amid widespread property value declines, and as a result they are resorting to tax rate increases. This funding challenge increases the burden on owners of commercial properties that are already suffering and ultimately degrades property values and the overall tax base. Let’s examine how this unfortunate and predictable scenario plays out, and the negative impact it inflicts on commercial real estate values. Rate-to-Value Dynamics A commercial property’s taxes depend on its assessed value, which represents the property’s market value determined by a local government assessor. The assessed value multiplied by the tax rate determines the property tax owed. Taxing entities calculate the tax rate by dividing the budget, or dollar amount levied for an area, by the total assessed value of all properties within the jurisdiction. Taxpayers can multiply the resulting tax rate, also known as a mill rate, by the assessed value of their individual property to determine the tax owed. How can decreasing assessed property values lead to an increase in tax rates? When property values decline, the overall property tax base shrinks. The local government’s fiscal needs remain stable, however, or…

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JLL: U.S. Retail Sector Remains Optimistic as Market Conditions Shift

John Nelson — Thu, 13 Mar 2025 11:55:00 +0000

CHICAGO — Retail closures are at a cyclical high, totaling a whopping 9,900 business shutdowns in 2024, according to JLL’s fourth-quarter 2024 retail report entitled “United States Retail Market Dynamics.” For the first time in several years, store closures outpaced store openings in a calendar year. Fabric and crafts retailer JOANN, who filed for Chapter 11 bankruptcy protection twice within a year, is shuttering all 800 stores, while major department store chain Macy’s will close 150 stores over the next three years, with 66 closures anticipated in 2025 alone. The highest number of store closures resulted from discount and dollar stores like Family Dollar, CVS Health and Big Lots, as well as specialty retailers like Party City. Retail closures are represented across different size brackets, with more than 55 percent of announced closures identifying with footprints ranging from 5,000 square feet to 20,000 square feet. Expanding retailers such as Dollar General, O’Reilly Automotive and Five Below align with these vacant boxes, while larger, major closures like Bed Bath & Beyond and Toys “R” Us occupy more “desirable” locations. On the flip side, between 2024 and 2025, there were roughly 7,700 new retail store openings announced. Nearly 3,000 of these openings…

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How to Invest in Sustainable Affordable Housing Initiatives

Kristin Harlow — Thu, 06 Mar 2025 13:30:00 +0000

By Wilson Ding, Related Midwest The integration of sustainable features in affordable housing often comes with a perceived conflict: the expense of green technologies versus tight operating margins. However, innovative financing strategies and open dialogue with government agencies can bridge the gap, making sustainability more achievable for these projects. By their very nature, affordable housing developments tend to be very complex, often with a number of public and private stakeholders and a multifaceted capital stack. Securing additional resources for the implementation of sustainable technologies in both new and existing communities adds another layer of intricacy, contributing to the sector’s lag behind market-rate in this area. Yet while the installation of sustainable technologies may require a higher upfront investment of time and money, their ability to reduce ongoing expenses makes them a smart long-term strategy. Tax incentives, grants and other subsidies can also help make these projects feasible. Round Barn Manor My firm, Related Midwest, recently finished a $6.8 million renovation of Round Barn Manor, a 156-unit affordable seniors housing community in Champaign, Illinois. Completed in September 2024, the renovation was part of a broader $38.6 million recapitalization initiative carried out in collaboration with Related Affordable, our national affordable housing arm…

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Affordable Housing Creativity Born Out of Necessity

Kristin Harlow — Tue, 21 Jan 2025 13:30:00 +0000

Housing affordability continues to be a pressing issue across the country. According to the National Low Income Housing Coalition, the U.S. has a shortage of 7.3 million rental homes affordable and available to renters with extremely low incomes. There are 34 affordable and available rental homes for every 100 extremely low-income renter households, which are defined as households either at or below the federal poverty guideline or 30 percent of the area median income (AMI), whichever is higher. “The country is facing a severe shortage of high-quality affordable housing, with demand far exceeding supply in the Midwest and every market we serve across the country,” says Geoff Milz, director of development for Ohio with Pennrose, which maintains eight offices across the U.S. “The housing crisis, compounded further by inflation and the rising cost of living, spans all demographics, geographies and family types.” In short, the need for affordable housing “has never been more critical,” adds Milz. Affordable housing developers are eager to build, but they must get creative to obtain the necessary financing for new projects. Due to the restricted rents, affordable housing properties are unable to generate as much income as market-rate assets. “The primary tool that we use…

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Engage Multifamily Residents Year-Round with Seasonal Amenities

Kristin Harlow — Fri, 13 Dec 2024 13:30:00 +0000

By Becky McLaughlin, WithMe Inc. As the seasons change, so do your residents’ needs and desires. Providing amenities and planning events that align with these shifting demands can be a game-changer for property managers. In fact, resident events have been shown to boost satisfaction, improve online reviews and impact lease renewal decisions, making them an essential tool for long-term property success. According to WithMe Inc.’s 2025 amenity outlook survey, which gathered insights from senior multifamily professionals at the country’s top property management companies, including Bozzuto, Greystar and Willow Bridge, there is a rise in resident demand for multipurpose spaces where they can relax, connect with neighbors and work. Finding ways to transform these common spaces to align with the changing seasons not only enhances resident satisfaction but also fosters a vibrant community atmosphere where people feel empowered to live, work and play year-round. Warming up the cooler months As temperatures drop, residents tend to spend more time indoors, increasing foot traffic in the lobby and shared spaces. This presents the perfect opportunity to transform these areas into cozy spots where they can comfortably work, connect and unwind. Imagine plush seating, soft lighting and a hot coffee and cocoa amenity that…

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Forecast Survey: What’s Your Take on Commercial Real Estate in 2025?

John Nelson — Fri, 15 Nov 2024 12:45:00 +0000

The editors of REBusinessOnline.com are conducting a brief online survey to gauge market conditions in 2025, and we welcome your participation. The survey should only take a few minutes to complete. Questions range from property sectors that you are most bullish on heading into 2025 to trends in deal volume to your outlook for interest rates. The results of our 14th annual survey will be compiled and published in the January issues of our regional magazines. Conducting these surveys is part of our mission at France Media to provide readers with indispensable information, and we couldn’t do it without your help. To participate in our broker/agent survey, click here. To participate in our developer/owner/manager survey, click here. To participate in our lender/financial intermediary survey, click here. (Note: Please remember to click on “done” to properly submit the survey.)

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Dual Appraisal Methods Improve Opportunities to Get Fair Taxation for Seniors Housing Properties

John Nelson — Thu, 31 Oct 2024 11:30:00 +0000

By Phil Brusk and Caleb Vahcic of Siegel Jennings Co. L.P.A. The seniors housing sector can’t seem to catch a break. Owners grappling with staffing shortages and other operational hardships lingering from the pandemic are facing new challenges related to debt and spiraling costs. High interest rates and loan maturations loom over the industry, with $19 billion in loans coming due within the next 24 months, according to Cushman & Wakefield’s “H1 2024 Market Trends and Investor Survey” on senior living and care. Factors driving high costs include wage pressures, inflation and — incredibly — rising property taxes. Despite operational challenges and declining occupancy at many facilities during the COVID-19 pandemic, property tax relief for seniors housing was mixed. Many assessors resisted downward adjustments to taxable values, maintaining that recovery was around the corner. Now, seniors housing operators face property tax assessments that equal or exceed pre-pandemic levels. As in the hospitality sector, most seniors housing owners understand that their operating properties include more value components than real property alone. In evaluating whether a tax assessment is reasonable and fair, however, owners need to realize that how an assessor addresses their real estate, personal property and intangible assets can drastically…

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Brokers Await Uptick in Net Lease Retail Sales

Kristin Harlow — Tue, 22 Oct 2024 12:00:00 +0000

Amid a slump in investment sales volume, investors eagerly welcomed the Federal Reserve’s interest rate cut in September. The half-percentage point decrease was more than what many in the industry had anticipated, but Fed Chairman Jerome Powell recently indicated that additional rate cuts this year will likely not be as aggressive. The move by the Fed came after a spike in the federal funds rate from near zero in March 2022 to a range of 5.25 to 5.5 percent in July 2023 — a period during which the central bank raised the federal funds rate 11 times. Ultimately, the higher interest rate environment has led to a major slowdown in the sales volume of net lease properties this year, says Randy Blankstein, president of The Boulder Group based in Wilmette, Illinois. “Transaction volume is down approximately 60 percent from 2022 levels,” he says. In a net lease transaction, the tenant pays a portion or all of the taxes, insurance fees and maintenance costs for a property in addition to rent. For the 12-month period that ended in June, net lease investment volume across property types decreased by 34 percent from the same period a year ago to $35.4 billion, according…

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Construction Sector Braces for Dry Spell in New Apartment Development

Jeff Shaw — Tue, 20 Aug 2024 11:45:00 +0000

— By Lynn Peisner — Developers and owners are optimistic a slowdown in construction over the next two years will help boost occupancies and rents by cutting into the market-rate supply overhang. This may be good news for owners of existing assets, but it’s less than ideal for those who make a living in the construction business. Or so it would seem. Most construction leaders are unfazed by an impending drought in new development. Some firms say they will rely on other sectors of commercial building to sustain them through the lull in apartment projects. Overall, the consensus among builders is that multifamily remains a secure line of business due to the high cost of owning a single-family home and a shortage of affordable housing. Construction Companies Adapt The National Association of Home Builders (NAHB) expects multifamily starts this year to total 342,000, down 28 percent from 2023. The recent peak was in 2022 when construction starts totaled 547,000. In its U.S. Real Estate Market Outlook 2024, CBRE concluded that this decline in construction starts means that new deliveries annually will be reduced to less than half the current level by 2026. “The pace of multifamily construction starts has slowed this…

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