Features

Survey: 76 Percent of Millennials Struggle to Find Affordable Housing

by Haisten Willis October 20, 2016

WASHINGTON, D.C. — A survey of 1,000 Americans aged 18-34 — commonly known as Millennials — has found that a majority of them have had to delay or rethink traditional ideas of home ownership, according to The NHP Foundation, which conducted the survey. The NHP Foundation is a nonprofit provider of affordable housing. The survey found that 76 percent of Millennials have made compromises in order to find affordable housing, which NHP defines as housing that costs no more than 30 percent of the respondent’s income. Of those who admit compromises, 46 percent live with parents or family, 43 percent have put off saving for the future, 41 percent live with a roommate and 36 percent had to move further away from school or work to find something affordable. “Millennials, America’s largest generation, are already saddled with record-breaking student loan debt and no longer think homeownership is in their future,” says Richard Burns, CEO of The NHP Foundation. “This group mirrors much of society, which is also frustrated by the lack of affordable housing and is seeking rental options.” Cost Burden Those who spend more than 30 percent of their income on rent or a mortgage are considered cost-burdened. The survey found …

October 20, 2016

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Features Top Stories

Zandi: Brexit Timing Will Determine Effect on U.S., European Real Estate

by Haisten Willis October 18, 2016

WASHINGTON, D.C. — Mark Zandi, chief economist at Moody’s Analytics, believes that despite bank and analyst predictions of a world recession if the United Kingdom voted to leave the European Union, the global economy is actually “OK for now.” He adds that the timing of the Brexit completion would likely determine stability of economies throughout Europe as well as the United States over the next three to five years. Zandi’s comments came at The Counselors of Real Estate annual convention, held Sept. 25-28 in Washington, D.C. Zandi led discussion about Brexit, when British voters decided on June 23 to leave the E.U., and its economic impact with a panel of real estate advisors representing France, Germany, Turkey, the U.S. and the U.K. He said the overall economy is “amazingly resilient,” because very little negative effect has been felt so far in Europe or the U.S. as a result of the vote. He noted that the European economy is actually growing and the U.S. is stable. Long-Term Process But, Zandi said, it’s too early to know the full effect Brexit will have until the process officially begins, which could potentially be longer than the timing called for in the Lisbon Treaty …

October 18, 2016

Features Louisiana Multifamily Southeast Student Housing Top Stories

NMHC 2016 Conference: Student Housing Remains Robust, Transaction Volume and Investor Interest High

by Katie Sloan October 13, 2016

NEW ORLEANS — The 14th annual National Multifamily Housing Council (NMHC) Student Housing Conference & Exposition was held Sept. 28-30 at the New Orleans Marriott in Louisiana, with over 700 leaders from all facets of the sector convening to network, discuss and dine over a range of industry topics. The outlook throughout the conference was overwhelmingly bright. Each panel and session showed the sector to be robust, with reports of rising rental rates, a record year in asset sales in the sector, and increasing investor interest and capital entering the student housing market. The conference began on Wednesday, Sept. 28, with opening remarks by NMHC president Doug Bibby, followed by a panel titled “Keeping Count: The Public Company Perspective.” Led by CEO of Peak Campus Bob Clark, the panel went in-depth with the CEOs of the two public REITs in the industry — Bill Bayless, president and CEO of American Campus Communities (ACC), and Randy Churchey, chairman and CEO of Education Realty Trust (EdR). Clark began the panel with a variety of statistics on the sector today, as reported by Axiometrics. New supply deliveries for the last five years have been 61,000-beds in 2013; 62,000-beds in 2014; 47,000-beds in 2015; 48,000-beds in 2016; and 36,000 …

October 13, 2016

Features Heartland Feature Archive Michigan Midwest Office

With Office Leasing Activity Accelerating in Detroit, New Construction is Imminent

by Jeff Shaw October 13, 2016

It is a fascinating time for the Detroit office market. Downtown neighborhoods and suburban markets alike are being transformed thanks to years of positive economic trends marked by healthy job growth and the desire of several companies to locate in the city. Landlords, tenants and investors are looking to consolidate gains and position themselves for success in an evolving marketplace. On the leasing front, we are still seeing activity in Detroit proper with small to mid-sized firms, punctuated by a handful of larger deals that have taken place. The higher profile moves include Detroit-based auto lender and bank holding company Ally Financial taking approximately 320,0000 square feet on 13 floors at One Detroit Center, now known as the Ally Detroit Center. A number of law firms have inked leasing deals. For example, longtime Detroit tenant Miller, Canfield, Paddock and Stone PLC renewed its lease at 150 W. Jefferson, a 25-story skyscraper formerly known as the Madden Building, where the law firm occupies approximately 97,000 square feet. Southfield, Mich.-based Redico LLC recently acquired the 500,000-square-foot tower, built in 1989, from Piedmont Office Realty Trust for $81.5 million. While leasing activity is strong in the central business district (CBD) — driven in …

October 13, 2016

Conference Coverage Features Multifamily Texas Texas & Oklahoma Feature Archive Top Stories

Highs, Lows of Texas Apartment Market Under Microscope at InterFace Conference

by Jeff Shaw October 11, 2016

DALLAS — The multifamily market in Texas has cooled off on the lending and development front, and even leasing activity isn’t as robust as it once was in some markets. That’s the consensus of panelists at Interface Multifamily Texas, which took place last Thursday, Oct. 6 at the InterContinental Dallas. The conference’s opening panel, “What’s the Big Picture for Multifamily Supply, Demand & Demographics?” featured three economists specializing in the Texas multifamily market, all of whom agreed the sector was slowing from the same time a year ago. “‘Noise’ is a great term to use, and in our company we are using ‘chop’ to describe the market,” said Ryan Davis, senior economist with Witten Advisors. “Apartments are steady, but the economy is slowing from the ramp-up.” That said, the Texas economy is generating plenty of new jobs, which is a positive sign for apartments in certain markets, added Davis. Dallas Metroplex Shines Among individual markets, all agreed that Dallas/Fort Worth displayed the strongest real estate fundamentals. With the area benefiting from some large corporate relocations, demand for apartments is rising. Rents have grown in the market 7.7 percent over the past 12 months, and there are more than 30,000 units …

October 11, 2016

Features Retail Texas Texas & Oklahoma Feature Archive

Millennials Shake Up Retail Game, Says Keynote Speaker at ICSC Texas

by Jeff Shaw October 10, 2016

DALLAS — While retail spending is on the rise overall, companies and brands that appeal to younger shoppers are having by far the most success, according to Dana Telsey, CEO and chief research officer at Telsey Advisory Group in New York City. Shifting consumer trends mean certain retailers — such as off-price apparel chains and “eatertainment” anchors like Topgolf and Main Event Entertainment — are having more success than others catering to the demands of the younger demographic. Telsey was the keynote speaker for the ICSC Texas Conference & Deal Making show that took place Oct. 5-7 at the Kay Bailey Hutchison Convention Center in Dallas. The event drew 4,008 attendees, the most in its history and the first time the conference has ever topped the 4,000 mark. The brokers, lenders, developers and others who listened to Telsey’s speech heard mostly positive news about the state of their industry. One retail subset seeing a lot of growth is off-price retailers, including TJ Maxx, Marshalls and Ross Dress for Less. “The off-pricers are the new department stores of today,” said Telsey. While those retailers are surging, some traditional department stores are struggling. Macy’s plans to close 100 locations, and Kohl’s has …

October 10, 2016

Features Multifamily Seniors Housing Top Stories

NIC: Seniors Housing Occupancy Remained Stable in Third Quarter While Asking Rents Increased

by Jeff Shaw October 6, 2016

ANNAPOLIS, Md. — The occupancy rate for seniors housing properties in the third quarter held steady, even as asking rents increased, according to the National Investment Center for Seniors Housing and Care (NIC), the industry’s main data tracking agency. NIC’s data is gathered from more than 14,000 properties across 140 metro markets nationally. The average occupancy for the quarter was 89.8 percent for seniors housing, which includes independent living, assisted living and memory care. That number was identical to the average occupancy over the last three years, and an increase of 10 basis points from the previous quarter. From a historical perspective, the average occupancy in the third quarter was 290 basis points above the industry’s cyclical low of 86.9 percent during the first quarter of 2010. Independent living properties led the industry in occupancy rate, with an average of 91.1 percent, an increase of 20 basis points over the prior quarter. The average occupancy at assisted living properties trailed at 88 percent, the same as the previous quarter but a drop of 20 basis points from the year prior. Healthy Tenant Demand Although occupancy was largely unmoved, absorption stayed positive as the market successfully took on new supply. Annual …

October 6, 2016

Features Heartland Feature Archive Retail Top Stories

Turnaround Artists Share Ideas for Re-Energizing Shopping Centers

by Jeff Shaw October 4, 2016

Unlike fine wine, retail properties don’t necessarily get better with age. In order for a shopping center to remain attractive and inviting, it periodically needs to be renovated or even repositioned. Since 2010, the U.S. shopping center industry has completed an average of 198 renovation projects annually, according to JLL in a research report released early this year titled “Remaking Retail: A Tricky Proposition.” Seventy percent of shopping centers renovated after 1999 were originally built between 1960 and 1989. Centers built during the 1980s have been the most popular targets for remodeling almost every year since 2003. So-called “meat and potatoes” retail real estate underwent the most renovation work from 1999 through 2015, according to JLL. Eighty-six percent of shopping center renovations during that period took place at neighborhood, strip and community centers. In order for a redevelopment, an even bigger undertaking, to be worth the effort, an owner would expect the project to add 200 basis points to a center’s capitalization rate as a general rule of thumb, JLL points out. What follows are two case studies of shopping center makeovers, one in Kansas City, Mo., and the other in West Des Moines, Iowa, that illustrate the challenges and …

October 4, 2016

Features Top Stories

AIA’s Latest Architecture Billings Index Slips for First Time Since January

by John Nelson September 29, 2016

WASHINGTON, D.C. — Following six months of increasing demand for design services, the Architecture Billings Index (ABI) slipped below the positive mark for August, reflecting a decline in demand for design activity at architecture firms. The American Institute of Architects (AIA) reported the August ABI score was 49.7, down from the mark of 51.5 in July. The score reflects a decrease in design activity, with any score above 50 indicating an increase in billings. “This is only the second month this year where demand for architectural services has declined and it is only by a fraction of a point,” said Kermit Baker, AIA’s chief economist. The new projects inquiry index was 61.8, up from a reading of 57.5 the previous month. The design contracts index also jumped from the previous month, from 51.8 in July to 52.7 in August. The design contracts metric tracks trends in the dollar volume of signed design contracts, with any score above 50 reflecting a growing value of the design contracts signed by AIA member-owned firms. Because the design contracts index functions as an early indicator of construction contract awards, Baker is assured that the decline in the ABI for August isn’t a harbinger of …

September 29, 2016

Features Florida Office Southeast Top Stories

Steps Every Landlord Should Take to Prevent Liens by its Tenant’s Contractors

by John Nelson September 27, 2016

Defending claims of lien recorded by tenant improvement contractors can be costly, time consuming and lead to protracted litigation. However, with a little planning and the right contract language, landlords can protect their properties from such liability. Below is a summary of various strategies a landlord can implement to avoid liens from its tenant’s improvements. Include No-Lien Language in all Leases and Record A Notice Thereof Under Florida law, when a lease between a landlord and a tenant requires the tenant to make improvements to the tenant’s premises, if the tenant ends up failing to pay its contractor for the tenant improvement work, then the contractor can file a claim of lien (and eventually foreclose) against both the tenant’s leasehold interest and the landlord’s fee simple interest in the property in an attempt to recover payment. However, under Section 713.10, Florida Statutes, the landlord can prevent such claims of lien and foreclosure actions, even if the improvements are the “pith of the lease,” by taking a few proactive steps. First, the landlord must include express “no-lien language” in its lease that states that the interest of the landlord shall not be subject to liens for improvements performed in the premises …

September 27, 2016

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