Features

RentCafe: Number of New Build-to-Rent Projects is Skyrocketing

by Jeff Shaw June 15, 2023

The construction of new build-to-rent (BTR) homes hit a record in 2022, with more than 14,500 houses completed, according to a RentCafe analysis of Yardi Matrix data. This is a 47 percent increase in deliveries from 2021. Now, approximately 44,700 BTR homes are under construction across America, triple the number of new homes completed in 2022. Prior to 2020, RentCafe notes, only about 6,000 BTR units were completed annually. RentCafe cited data from the firm’s sister company, Yardi Matrix. The data includes properties defined as single-family homes for rent that are in build-to-rent, professionally managed communities covered by Yardi Matrix research. The study is based on data related to BTR communities comprising at least 50 units. “In the wake of the 2008 housing crisis, the number of renter-occupied single-family houses in the United States increased by more than 2.5 million between 2009 and 2016, according to the U.S. Census Bureau,” comments Doug Ressler, manager of business intelligence at Yardi Matrix. “Institutional SFR (single-family rental) growth remains focused on BTR product, as home sales have declined in recent months due to lack of inventory and rising mortgage rates,” continues Ressler. “Although home prices have remained surprisingly firm, the number of homes on the market for …

June 15, 2023

Content Partner Features Industrial Leasing Activity Midwest NAI Northeast Southeast Texas Western

Rewards, Risk Mitigation Fuel Cell Tower Lease Sales

by Sarah Daniels June 14, 2023

A rapidly evolving connectivity frontier is shaping the future of cell tower lease sales and encouraging many commercial property owners who rent space to tower companies to sell their leases at values at the top of the market. Telecom carriers have considerably slowed their buildouts for 5G networks and are already preparing for 6G mobile networks, expected to roll out around 2024. Brokers are seeking to amend and renegotiate old cell tower leases in the face of predicted wireless infrastructure obsolescence and connectivity innovations, which may negate some physical infrastructure needs entirely. The key to maximizing sale proceeds in this landscape is to secure landlord-friendly terms and ensure clarity in a new lease or renewal. Among other elements, building owners must insist on strong insurance indemnities and well-defined subordination, non-disturbance and attornment (SDNA) in the amended agreements. But no landlord demand may be more important to future value than denying the tenant a right of first refusal to purchase the lease, says David Moore, CEO and principal of NAI Global Wireless, a Redlands, California-based national wireless real estate brokerage that represents landlords. Cell tower leases in which tenants don’t have right of first refusal are more appealing to buyers, a …

June 14, 2023

Features Multifamily

Large-Scale Apartment Renovations: Five Tips to Create a Positive Resident Experience

by Taylor Williams June 13, 2023

By Ron Fanish, co-owner, Rainbow International Restoration of Westchester Operating an apartment complex is no easy task. Property managers must juggle a long list of duties, from serving current residents and recruiting new tenants to maintaining buildings. Among the most challenging of these tasks is implementing large-scale apartment renovations. These undertakings comprise many complicated moving parts — managing contractors, overseeing budgets and ensuring the project does not significantly disrupt residents’ quality of life. This last element is especially important. Apartment renovations have the potential to be majorly disruptive by generating noise, clutter and limited access to utilities. In some cases, residents may even be temporarily displaced from their homes. For this reason, it’s essential for property managers to prioritize positive resident experiences during the renovation process. Here are five strategies for doing precisely this. Communicate, communicate, communicate. Since large-scale apartment renovations can have such significant impacts on residents’ day-to-day lives, there’s no such thing as over-communication. Start by giving advance notice about the project as soon as possible and providing thorough details on duration, potential noise and other disturbances. Also, operators must ensure that they’re communicating across multiple channels so residents don’t miss any updates. Use email, paper bulletins, text …

June 13, 2023

Features Retail

Buyer, Seller Disconnect Continues Amid Challenging Retail Lending Environment

by Katie Sloan June 8, 2023

When comparing this year’s retail investment sales market to last year’s, the main difference is the dramatic increase in the cost of capital. Naturally, this has led to a decrease in transaction activity and a disconnect between buyers and sellers. Over the past year, the Federal Reserve has raised the federal funds rate nine times for a total of 475 basis points to tame inflation. These actions have led to a sharp rise in commercial mortgage rates, which have a significant impact on pricing. The average mortgage rate on loans closed in the fourth quarter of 2022 across all commercial real estate asset classes was 5.3 percent, according to CBRE, up from 3.3 percent in the fourth quarter of 2021. Additionally, according to the Federal Deposit Insurance Corp. (FDIC), 2023 represents the largest year in bank failures in terms of total assets since 2008. In March, the FDIC took the reins at two regional banks, Silicon Valley Bank and Signature Bank, after massive bank runs. “Many would-be sellers are on the sidelines due to the downward pressure on pricing, leading to lower transaction velocity,” says Matt Hazelton, senior director with JLL Capital Markets in Minneapolis. “Property values have decreased about …

June 8, 2023

Features Student Housing

How to Reduce Student Housing Property Tax Assessments Post-Pandemic

by Katie Sloan June 6, 2023

Not long ago, assessors’ student housing properties valuations generally struggled keeping pace with the rising market. College enrollment was high, rent growth outpaced expenses and student expectations lined up with most newer facility amenities. However, the COVID-19 pandemic and its fallout changed the game. Property taxes are often the single highest expense on a property’s profit and loss statement. When market changes make student housing less profitable, the tax burden should not be allowed to remain high. When this occurs, the assessor’s property valuation needs to be challenged and reduced. Projecting Income: Look Forward, Not Back Many jurisdictions assess student housing properties’ value using a cost approach. A computer system estimates the cost to build the property new, then deducts physical depreciation based on the property’s age. Due to skyrocketing construction costs, those depreciation deductions are outpaced by base cost increases. It is common to see cost-based values increase despite struggles facing the real estate market. Owners can combat increases by appealing the assessor’s value. When a student housing property owner files an assessment appeal, the appeal review board often evaluates the three prior years’ operating income. This allows the appeal board to develop an income model intended to represent …

June 6, 2023

Conference Coverage Features Industrial North Carolina Southeast Southeast Feature Archive

Interstate 85 Corridor Industrial Markets Aren’t Overbuilt Yet, Say InterFace Panelists

by John Nelson June 1, 2023

Interstate 85 traverses through the heart of the Southeast, the fastest-growing region in the United States by way of population. The southern terminus of the 666-mile interstate is in Montgomery, Ala., home of the mega Hyundai Motor Manufacturing Alabama plant, and it travels north to just shy of Richmond, Va., the site of North America’s first LEGO factory. Along the way, I-85 connects through Atlanta and the Carolinas markets of Greenville-Spartanburg, Charlotte, Greensboro and Raleigh-Durham. These I-85 Corridor markets have seen their fair share of industrial development in recent years, so much so that for the first time this cycle, some experts are worried about overbuilding. Steven McGee, vice president of Southeast development at Rockefeller Group, said that half of the nation’s population growth has been coming to the Southeast region, and that faucet isn’t expected to be shut off anytime soon. “America is getting bigger, and half of that growth is occurring in three or four states,” said McGee. “I don’t see any real structural elements that are stopping that growth. It’s a challenge on the timing [for industrial deliveries], but in almost every market we have record vacancy. We have very few options for occupiers coming into the …

June 1, 2023

Life Sciences Innovation Districts Danvers quote

Bohler Content Partner Development Features Life Sciences Midwest Multifamily Northeast Southeast Texas Western

Part 2: How to Promote Collaboration, Efficiency in Life Sciences Innovation Districts Via Design

by Sarah Daniels May 31, 2023

In the biotech and pharmaceutical sectors, life sciences innovation districts have become hubs not only for research and development but also for cooperation and inspiration between cohorts. These districts, often called innovation districts, collect together companies, research institutions, supporting entities, housing and more. Innovation districts necessitate meticulous planning and design strategies to promote scientific inquiry and efficiency. “Municipalities, schools, corporations and organizations that have close ties to their state are piloting life sciences innovation district development, allowing them to group otherwise separated uses — work, recreation, living areas and more — together. When you pair these institutions and include innovative site and building programming in a single location, you move beyond disconnected projects and amenities to a united innovation district that can magnify benefits across organizations,” explains Dan Danvers, a landscape architect project manager with Bohler, a land development consulting and site design company. This article is the design-focused component of our two-part series on life sciences innovation districts. If you would like to read about the planning component of these complex developments, please read our first article here. Moving Life Sciences Innovation Districts Forward Innovation districts must keep pace with evolving technologies and research. Life sciences industries are continually progressing, …

May 31, 2023

Features Retail

Open-Air Lifestyle Centers Take Over U.S. Suburbs

by Taylor Williams May 30, 2023

By Ed Coury, senior managing director, RCS Real Estate Advisors Open-air lifestyle centers can be defined as intentionally designed spaces that are set against beautiful landscapes and house high-quality dining, retail, entertainment, health and wellness uses. These centers are being developed or redeveloped at an increasing rate across the country. Lifestyle centers are particularly popular along “smile” states: California, Arizona, Texas, Georgia, Tennessee, Florida, South Carolina and North Carolina. This particular transformation has been a result of “de-mallification” in the suburbs, in which malls that were once largely indoors and anchored by big department stores are now being converted into mixed-use lifestyle developments. For background, lifestyle centers are not a new phenomenon; they have been gaining popularity since the early 2000s. While few new malls have been built in the last two decades, new lifestyle centers and conversions to lifestyle centers continue to emerge every year. So why are these lifestyle centers so popular, and what does the future of suburban retail look like? Shifting Tastes For one thing, consumer preferences have changed. Today, there is high demand for wellness. In a 2022 consumer report by IT consulting firm Accenture, 80 percent of people surveyed stated that wellness was an …

May 30, 2023

Features Multifamily Seniors Housing

Residents Share Insightful Firsthand Accounts of Life in Active Adult Communities

by Taylor Williams May 25, 2023

By Taylor Williams Aging is something that happens to all of us physically, but according to some residents at active adult communities in the Dallas-Fort Worth (DFW) area, the psychological and emotional difficulties of growing older are easier to bear in the company of others. Operators of this asset class are making this possible by delivering products and services that reflect the name “active adult.” Shared fitness classes, walking groups, book clubs, card games, communal gardening and organized shopping trips are but a few of the ways in which active adult owner-operators keep their residents’ bodies and minds fit and sharp. Happy hours, dance parties and holiday shindigs — all taking place in an environment devoid of children — ensure that residents have very grown-up ways of relaxing and having fun. The average age of a resident in an active adult community is 72 to 74, according to research conducted by the National Investment Center for Seniors Housing & Care. The growth of active adult properties, which tend to be age-restricted hybrids of traditional multifamily and independent living product, is often linked to convenience for older households whose children have left the home. The prospect of having a smaller space …

May 25, 2023

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

“State of CRE” Webcast Frames Market Trends in Face of Potential Downturn

by Sarah Daniels May 23, 2023

By Willy Walker, CEO of Walker & Dunlop I recently had the pleasure of sitting down to talk with some prominent members of the Walker & Dunlop team, including Kris Mikkelsen, executive vice president of investment sales, Aaron Appel, senior managing director of capital markets, and Ivy Zelman, executive vice president of research and securities. In this episode of the Walker Webcast, “State of CRE,” we covered some of the most prominent issues the commercial real estate industry is facing, as well as some headwinds it will continue to face in the future. Changes in Homebuilding and Consumer Spending Although homebuilders had to offer incentives when rates first started increasing last year, they are still seeing a steady demand for homes, as demand still heavily outpaces supply. This imbalance is seen in the new and existing home market. Single-family homes in many markets across the country are in multiple offer situations, indicating that single-family residential real estate is still strong. This is incredible, given the fact that many existing homeowners are locked into mortgage rates in the 2-5 percent range, giving them little reason to move out of their current home. How Mortgage Deals Are Currently Financed Although we are …

May 23, 2023

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