Features

Build-to-Rent Communities Offer Affordability Amid Rising Interest Rates

by Taylor Williams November 10, 2022

By Blair Sweeney, managing director, Landmark Properties More Americans are looking for homes even as available housing shrinks. This dynamic is rapidly accelerating the demand for build-to-rent (BTR) communities. The United States has failed to build as many homes as needed to keep up with population expansion, especially in markets in and around growing cities. Over the past 10 years, U.S. developers have delivered 19 percent less housing than in the previous decade — all while the population and overall demand for housing dramatically increased. The challenges to adding housing inventory aren’t new. In many areas, it’s become very difficult and expensive to navigate environmental and zoning regulations, putting many otherwise available sites out of reach. Additionally, costs of materials and labor continue to rise. While these constraints existed before the pandemic, COVID-19 pulled these limitations forward. Emerging in response to the agitated real estate market are single-family homes that are developed specifically as rentals, a relatively new housing product type that combines elements of homeownership and multifamily renting. Unlike institutional investors purchasing existing single-family homes off the market to rent, Landmark Properties is purpose-building homes to combat the nation’s housing shortage, ultimately alleviating pricing pressure in the housing market. …

November 10, 2022

Features Multifamily

NMHC Members Report Softening Apartment Market in Quarterly Survey

by Jeff Shaw November 8, 2022

WASHINGTON, D.C. — The Federal Reserve last Wednesday raised the benchmark short-term borrowing rate by another 0.75 percentage point to a target range of 3.75 to 4 percent. The move by the central bank marked the sixth time this year that it has raised the fed funds rate, which now stands at its highest level since January 2008. The series of rate hikes is part of an aggressive effort by the Federal Reserve to combat inflation, which reached a 40-year high of 9.1 percent in June on a year-over-year basis and has held at elevated levels in the ensuing months. Inflation came in at 8.2 percent in September. The high interest rates have had a notably negative impact on the multifamily sector, according to the data from the National Multifamily Housing Council (NMHC), based out of Washington, D.C. Four indices in the trade association’s latest Quarterly Survey of Apartment Conditions came in below the breakeven level, loosely defined as the point at which there is no change in market conditions. The latest findings were based on the responses of 268 CEOs and other senior executives of apartment-related firms nationwide. The survey was conducted Oct. 17-24. “The Fed’s continued interest rate hikes have resulted in …

November 8, 2022

Content Partner Features Industrial Leasing Activity Loans Midwest Multifamily NAI Northeast Office Retail Southeast Texas Western

Experts Turn to Opportunistic Moves, Lending During Uncertainty of Economic Downturn

by Sarah Daniels November 7, 2022

As we shift through economic uncertainty and changes in the market, commercial real estate businesses are planning for a range of scenarios — and looking to historical trends to make predictions. REBusinessOnline sat down with two industry experts to talk about how this period of uncertainty compares to previous eras and where there may be benefits and opportunities in the current landscape. Jay Olshonsky, president and CEO, and Cliff Moskowitz, executive vice president, at NAI Global spoke about the commercial real estate outlook and the challenges it is likely to face in the immediate future. REBusiness: Looking at the current environment, how does it compare to previous periods of uncertainty? What might be the impacts on commercial real estate? Olshonsky: To start with, we are in a recession. We’ve already had two quarters of negative GDP growth. I think the most fundamental difference between this cycle and a lot of other cycles is that we have extremely low unemployment, differentiating this moment from others, for example, 2009. Even though the most recent job numbers were lower, they were still fairly strong. Jobs create the demand for commercial real estate at all levels, but especially at the services level. We do …

November 7, 2022

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

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

by Sarah Daniels November 3, 2022

Lee & Associates’ newly released 2022 Q3 North America Market Report examines third-quarter 2022 industrial, office, retail and multifamily outlooks throughout the United States. This sector-based review of commercial real estate trends for the third quarter of the year examines the difficulties facing each asset class and where opportunities in the commercial real estate landscape may be emerging. 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 summaries below provide high-level considerations of the overall health and obstacles for the industrial, office, retail and multifamily sectors. Industrial Overview: High Rent, Low Vacancy Everywhere North American industrial space availability is tight everywhere while rent growth and property prices remain near or have moved beyond historic highs. Through the third quarter, the United States’ vacancy rate settled at 4 percent, up 10 basis points from second quarter 2022. Average rents increased 11.4 percent year over year with gains of 19 percent in Miami, 18.7 percent in Southern California’s Inland Empire, 16 percent in Phoenix and 14.6 percent in Atlanta. Since the COVID lockdown in March of 2020, developers of U.S. logistics space have been …

November 3, 2022

District of Columbia Features Southeast

Sun Belt Markets Dominate Top 10 ‘Markets to Watch’ in 2023, According to Emerging Trends Report

by John Nelson November 2, 2022

WASHINGTON, D.C. — A variety of Sun Belt markets once again lead the “top markets to watch” in 2023 for overall real estate prospects, with Nashville ranking No. 1 for the second consecutive year in the annual Emerging Trends report issued by the Urban Land Institute (ULI) and PwC US. Using proprietary data and insights from more than 2,000 real estate industry experts across 80 tracked markets in the United States and Canada, Emerging Trends pegged the Music City as a “supernova” market due to its evolution from an 18-hour city to a “24-hour metropolis.” In the past couple years, Nashville has attracted Amazon and Oracle to build new office campuses, and two weeks ago the NFL’s Tennessee Titans and the Metropolitan Government of Nashville and Davidson County agreed to terms for a new $2.1 billion football stadium in the East Bank district that could attract events such as the Super Bowl and College Football Playoff. The private investment is in response to the Nashville MSA posting a 21 percent population growth rate in the past decade, according to the latest U.S. Census data. The Emerging Trends report noted that the pandemic has reinforced these migration trends as workers from …

November 2, 2022

Development Features Multifamily

Executive Q&A: Multifamily Building Costs Rise Up to 40 Percent in a Year, Says R&O Construction’s Eric Stratford

by Jeff Shaw November 1, 2022

OGDEN, UTAH — Multifamily builders face many challenges, including schedule delays, supply chain interruptions, fluctuating material costs and workforce shortages. Construction companies are exercising creativity in tackling these issues to meet high demand. Many firms that build commercial properties argue that smart planning and collaboration among architects, engineers and construction firms are the best ways to weather the storm. REBusinessOnline, a sister publication of Multifamily & Affordable Housing Business, recently interviewed Eric Stratford, director of business development and pre-construction services at R&O Construction, about today’s construction landscape. REBusinessOnline: Tell us about your company. Eric Stratford: R&O Construction was founded in 1980, and we are proud to say that our first client over 42 years ago is still a client today. We are headquartered in Ogden, Utah, with full-service offices in Salt Lake City and Las Vegas. R&O Construction currently employs approximately 185 employees. Some of our recent projects include Senior Living on Washington, an affordable seniors housing community in Ogden; Ascent 1791, a LEED Gold Certified apartment community in Park City, Utah; and The Canyons Employee Housing Facility, a project ordered by Vail Resorts to provide housing for their employees. REBusinessOnline: In which markets and/or regions are you most active? …

November 1, 2022

Matt Maison, vice president of research for Arbor Realty Trust

Acquisitions Arbor Realty Trust Content Partner Features Midwest Multifamily Northeast Southeast Texas Western

Multifamily Opportunity Matrix Reveals Most Promising Markets for Investors, Developers

by Sarah Daniels November 1, 2022

By Arbor Realty Trust Inflationary environments set many investors’ minds to thinking about multifamily properties, which have tended to perform as well or better than other property types in the face of economic headwinds. Product type is no guarantee of success, however, and careful site selection is essential to ensure a project will have the renter demand and pricing power the owner needs to succeed. Arbor Realty Trust, in partnership with Chandan Economics, developed the opportunity matrix featured in Arbor’s Top Opportunities in Large Multifamily Investment Report 2022. The opportunity matrix helps clients navigate the nation’s apartment markets, enabling them to compare relative strengths from one metro to the next and identify those offering the greatest potential for development or investment. Its ranking system, which analyzes eight key categories, found the top three U.S. metro markets for large multifamily investment in 2022 are San Antonio, Kansas City and Las Vegas. “Reviewing what made these communities rise to the top of our 50-metro ranking will demonstrate how investors can use the matrix to compare the climates of opportunity in the markets in which they operate, or to suggest new fields of opportunity for their next venture,” said Matt Maison, vice president …

November 1, 2022

Features Heartland Feature Archive Multifamily Seniors Housing

Seniors Housing Developers Shift to Repositionings Amid Economic Uncertainty, Say InterFace Panelists

by Kristin Harlow October 28, 2022

CHICAGO — As shovel-ready projects get put on hold, seniors housing developers are looking 24 months ahead, hoping that by then the economic outlook will have improved. For now, they worry about a possible recession and rising costs for everything from debt financing to building materials as they turn their immediate focus to repositioning opportunities. “The industry has been hit with macro-economic shocks,” said Adam Heavenrich, managing director at Heavenrich & Co., a Chicago-based investment brokerage firm. “What you hear is that if you’re developing now, you’re crazy.” Heavenrich gave these opening remarks as moderator of a panel discussion on development at France Media’s sixth annual InterFace Seniors Housing Midwest conference, held Oct. 20 in Chicago. The day-long event featured six panel discussions on topics relevant to industry stakeholders, along with networking opportunities. The development panel included experts who analyzed the smartest plays for the upcoming year. They recounted a growing list of barriers to new construction. The industry is still clawing its way back from the occupancy declines due to the pandemic. Seniors housing occupancy stood at 82.2 percent at the end of the third quarter of 2022, according to data analytics firm NIC MAP Vision. Inflation, last pegged …

October 28, 2022

Content Partner Features Midwest Multifamily Northeast Pavlov Media Southeast Texas Western

Multifamily Fiber Networks Must Be Dedicated, Resilient to Serve Increased Resident Demand

by Sarah Daniels October 27, 2022

Fiber networks built with multifamily properties in mind offer network resilience while maximizing ROI for owners and operators. Well-constructed fiber networks are at the heart of meeting and exceeding residents’ growing Internet needs, especially when work-from-home culture and the constant need for online connection have made Internet slowdowns and downtime unacceptable for end users. Fiber can also strengthen connectivity across multifamily properties, shoring up the Wi-Fi services residents have come to know and on which they’ve come to depend. How does a national fiber network integrate with multifamily properties? By focusing just on the needs of the multi-dwelling unit (MDU). “Instead of building out 200-mile routes of duct and fiber, we build out ‘miracle miles’ in densely populated MDU areas. From that point, we’re able to easily grow or expand out from that area,” says Michael O’Linc, president of fiber services & campus communications at Pavlov Media. O’Linc stresses the importance of a more planned, methodical approach for MDUs. A network that serves multifamily buildings must be a network focused on backups and fail safes. The “miracle mile” method creates a main line with laterals — creating a ring shape as it expands. This approach to fiber makes networks easier to …

October 27, 2022

Features Multifamily

How Multifamily Owners Can Retain Residents in Today’s Turbulent Environment

by Taylor Williams October 26, 2022

By Ben Johnson, founder & president, Spruce It’s no secret that the U.S. economy is in the midst of a very turbulent period. Businesses of all sizes and types are experiencing adverse pressures like never before and seeking ways to cut costs and increase revenue wherever possible. The real estate market, including the multifamily industry, is no exception. With fewer people able to buy homes due to skyrocketing mortgage rates and minimal inventory for sale, more people are turning to apartments. As renting by necessity grows, residents are looking for the highest value from their rental experience. Consequently, multifamily owners and operators are now putting a bigger emphasis than ever on tenant retention by asking why high retention rates are important, how they can be maintained and what some alternative options are. Why Retention Matters Many of the hottest multifamily markets in the country have seen annual rent increases well over 20 percent over the last year, and several markets have even seen increases exceeding 30 percent. While this growth is a boon for existing owners, it begs the question of whether these increases are sustainable, or if the next several years will usher in below-trend increases. Why is this …

October 26, 2022

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