Features

Possibly the busiest season for property managers and buildings, fall comes with a laundry list of actions to be completed. These necessary activities run the gamut, ranging from budgeting to repairs and maintenance. Many of these to-do’s must be completed to ensure a seamless transition for residents from season to season as well as to create a solid financial plan for the following the year. As the vice president of client services at Argo Real Estate with over 20 years of industry experience, I’ve found the easiest way to ensure that all of the essential to-do’s are checked off is to take the standard list-making approach. During my time at Argo I developed what we like to fondly call the “Five Essentials for a Foolproof Fall.” Separating the myriad of repairs, maintenance, budgeting and other activities into five different categories, this list covers all aspects of the property management spectrum and ensures that all necessary parties and activities have been addressed. Listed below with a corresponding detailed description are the Five Fall Essentials. Through the acknowledgement and completion of each one, a building and its property managers should transition easily between seasons, particularly from fall to winter, which is the …

WASHINGTON, D.C. — The Architecture Billings Index (ABI) has posted an overall score of 51.6 for September, up from 50.2 in August. The index is generally used to help gauge the onset of construction activity nine to 12 months in advance, according to The American Institute of Architects (AIA), the publisher of the index. Scores above 50 on the ABI indicate an increase in architecture billings, while readings below 50 reflect a decline. For September, billings at architecture firms increased at their fastest pace since late 2010, according to the AIA. The September index shows strong activity for multifamily properties, which leads all other sectors in terms of architecture billings. Kermit Baker, chief economist of AIA, explains that multifamily’s strong showing is a result of high demand for rental housing. “Going back to the third quarter of 2011, the multifamily sector has been the best-performing segment of the construction field,” says Baker. “With high foreclosure levels in recent years, more stringent mortgage approvals and fewer people in the market to buy homes, there has been a surge in demand for rental housing. The upturn in residential activity will hopefully spur more nonresidential construction.” Multifamily posted a 57.3 score, institutional posted …

CHICAGO — Los Angeles is the place to be for law firms, according to a new report from Jones Lang LaSalle. The City of Angels has been ranked the top U.S. city in Jones Lang LaSalle’s inaugural law firm index, which ranks the top U.S. markets for law firms. The index is based on a combination of potential business growth, strong local legal employment volume and the availability of premium space at a discount. The index ranks 36 U.S. cities, and Los Angeles posted the highest score with 69.2. The law firm index was featured in Jones Lang LaSalle’s seventh annual Law Firm Office Perspective report. It marks the first time U.S. real estate markets have been ranked for location attractiveness for law firms. The top 10 markets and their scores are as follows: 1. Los Angeles (69.2) 2. Washington, D.C. (68.2) 3. New York City (61.5) 4. Chicago (58.3) 5. Dallas (52.9) 6. Atlanta (52.8) 7. Boston (51.1) 8. Philadelphia (50.3) 9. Houston (49.7) 10. Minneapolis (48.4) “The top cities for law firms represent metropolitan areas where our research has determined that law firms have the most potential to achieve overall success,” explains Tom Doughty, managing director and co-chair …

DENVER — The real estate recovery is set to advance in 2013 as modest gains in leasing, rents, and pricing will extend across U.S. markets from coast to coast and improve prospects for all property sectors. That's the conclusion of Emerging Trends in Real Estate 2013, an annual forecast released Wednesday by PwC US and the Urban Land Institute (ULI). The Emerging Trends survey results were based on interviews and survey responses from more than 900 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants. Despite a slower than normal real estate recovery, U.S. property sectors and markets will register noticeably better prospects than in 2012, according to survey participants. Recent job creation should be enough to increase absorption and push down vacancy rates in the office, industrial, and retail sectors, helped by the limited new supply in commercial markets. Robust demand for apartments should hold up, survey respondents indicate, even as new construction ramps up. Even the housing sector will make progress in most regions. Additionally, improving fundamentals should help with rents and net operating incomes, building confidence about sustained growth and strengthening recent appreciation. “With the outlook for commercial real estate …

CHICAGO — Capital raised by healthcare real estate investment trusts (HCREITs) continues to outpace other REIT categories as investors remain focused on medical office buildings and seniors housing to drive superior and stable returns for their investment dollars. According to data compiled by the Healthcare Capital Markets group at Jones Lang LaSalle, the capital raised by HCREITs through mid-year 2012 set a record at more than $7.5 billion, outpacing previous strong record years. This total is more than 65 percent of the $11.3 billion in capital raised by HCREITs in all of 2011 and 80 percent of the $9.2 billion in capital HCREITs raised in all of 2010. HCREITs continue to outpace capital raised by REITs in other property classes as well. HCREITs raised 20 percent of all REIT capital year-to-date through mid-year in spite of representing only 13 percent of REIT market value. “The ability of healthcare REITS to raise debt and equity capital with attractive pricing supports aggressive, accretive acquisition programs and correlates directly with the market-pacing performance of this investment type,” says Mindy Berman, managing director of the Healthcare Capital Markets group at Jones Lang LaSalle. “The safe haven of healthcare real estate continues as it produces …

John Nelson ATLANTA —Real estate investors are looking to allocate their capital in gateway cities or markets that are experiencing significant job growth. Unfortunately, that leaves Atlanta on the outside looking in, according to an expert panel discussing where investment capital is going in 2013. “[Atlanta is] just not in the game in respect to the things that are driving job growth, and that’s the reality,” says Chip Davidson, co-founder, chairman and CEO of The Brookdale Group, an Atlanta-based real estate investment firm. “The reality is we’re still lagging behind the West Coast markets, Austin and Raleigh in the technology departments. And I don’t know of anyone who has drilled an oil well here in Atlanta recently.” Davidson’s comments came Thursday, Oct. 4, during a commercial real estate finance and investment conference at the Westin Buckhead in Atlanta. The law firm of Morris, Manning & Martin LLP and France Media’s InterFace Conference Group jointly produced the daylong event, titled “What to Expect In 2013?” The event attracted more than 400 leading investors, developers, lenders and financial intermediaries from across the Southeast. According to the Bureau of Labor Statistics (BLS), total nonfarm employment for the Atlanta metropolitan statistical area stood at …

Dr. Peter Linneman With the economic downturn battering investors, positive real estate news has been relatively sparse. Yet, seniors housing is emerging as potential bright spot for firms with available capital. A push by industry leadership for greater financial transparency over the last several years has given institutional investors greater confidence to evaluate seniors housing for their portfolios. As with other types of real estate, seniors housing demand tends to track the economic recovery, both nationally and regionally. While recovery of the sector has been modest, the number of seniors housing transactions is rising with property and portfolio sales totaling $27.4 billion trading in 2011, according to NIC MAP Data & Analysis Service. This figure is a substantial increase from $6.3 billion in 2010. Recent M&A activity includes Genesis Healthcare’s acquisition of Sun Healthcare in June for more than $273 million. With an ever-aging American population, long-term investors should not overlook seniors housing. Historical perspective Seniors housing was far from immune to the economic downturn that began in 2008. At the low point of the recession, independent living and assisted living posted year-over-year occupancy rate declines in excess of 250 and 150 basis points, respectively. Construction came to a grinding …

Savannah Duncan During the past 12 months, sales of branded select-service, limited-service and economy hotels jumped 84 percent, according to Marcus & Millichap’s third-quarter hospitality research report. Southeast Real Estate Business spoke with Gregory LaBerge, national director of Marcus & Millichap’s National Hospitality Group, to find out why hotels are such a hot buy for investors. Southeast Real Estate Business (SREB): Why has there been such a strong uptick in hotel sales? Gregory LaBerge: In the market segment in which we operate — the $1 million to $10 million flagged, select-service, limited-service and economy hotels — there has been a significant rise in hospitality sales among private investors. One reason there has been such a big jump in sales of these properties is that we are coming off a period of very little activity. In the most recent round of reports, I tracked nearly 600 sales of these properties nationwide, compared with slightly more than 300 in the preceding period. In 2009, at the peak of the recession, there were fewer than 200 sales nationwide as financing dried up and property performance plummeted. In addition, the hotel sector has been in recovery since 2010. Investors continue to seek opportunities to …

Nellie Day SAN DIEGO — Most attendees at the recent ICSC 2012 Western Division Conference in San Diego agreed that both cautious optimism and capital have returned to the retail market. While this is certainly good news, it also means that competition has re-entered the retail space. “The market volume is higher than last year,” said Michael Marino, a capital markets panelist and executive vice president and division manager for Wells Fargo Bank in Los Angeles. “Our market share was enormous in 2010 and 2011. Now the pie is bigger, and competition is coming back.” To stave off this competition, many retail players are looking to differentiate their centers and tenants, according to attendees. “For a while, people just looked continuously at what that NOI [net operating income] drove,” said Kelley Maher, senior vice president of Madison Marquette and capital markets panelist. “They were interested in taking money out of these centers as opposed to putting it back in.” Maher adds that for a long time, renovations didn't get the attention they deserved. “But now, with retailers growing their stores and several shopping opportunities in every market, you have to differentiate yourself and show you're keeping current with consumers.” Maher's …

The level of commercial/multifamily mortgage debt outstanding decreased by $10.4 billion, or 0.4 percent, in the second quarter of 2012, as the balance of loans in CMBS, CDO and other ABS issues continued to decline, according to the Mortgage Bankers Association (MBA). The $2.37 trillion in outstanding commercial/multifamily mortgage debt was $10.4 billion lower than the first quarter 2012 figure. Multifamily mortgage debt outstanding rose to $826 billion, an increase of $5.4 billion or 0.7 percent from the first quarter of 2012. “CMBS loans paid-off, paid-down and were liquidated at a far faster pace than new CMBS loans were originated during the quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The drop in CMBS balances more than offset the increases in holdings by Fannie Mae, Freddie Mac and FHA, banks and life insurance companies.” The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under “Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) …