Features

Contractors Face Uncertain Materials Costs, Lull in Student Housing Activity Due to COVID-19

by Katie Sloan September 14, 2021

Rising construction materials costs have been one of the biggest stories of the pandemic era. When COVID hit, many factories ramped down production. In addition, some raw materials industries had challenges like tariffs, natural disasters and COVID-related slowdowns. When construction continued during the pandemic, supply suffered and pricing rose dramatically. This has been especially true for lumber and steel, but natural disasters in areas like Texas have even hampered the manufacturing of other goods, like appliances. Student Housing Business, sister publication to REBusinessOnline, spoke to six general contractors to get their take on the student housing sector at present, and to get their advice on what they are telling clients who are pricing projects for 2022 groundbreakings and beyond. SHB spoke with Arne Goldman, director of business development at Marous Brothers Construction; Marty Hoffey, business development manager at MW Builders; Emily Kessinger, business development manager, and Chris Harrison, executive vice president at The Weitz Company; Sean Studzinski, president of strategic initiatives at Modular Design+; and Sky Sanborn, executive vice president and chief operating officer of Broeren Russo Builders. SHB: How busy is your student housing pipeline? What projects have you recently built/completed? Goldman: We have some projects that are lined …

September 14, 2021

Now is the Time for Regional Mall Redevelopments

by Taylor Williams September 10, 2021

By Glenn Brill, managing director, FTI Consulting Inc. Despite the growth of e-commerce as consumer expenditures and retailers adapt to omni-channel sales, digital marketing strategies and shifts in consumer behaviors resulting from COVID-19, most shoppers still go to stores. Eighty-six percent of consumer sales take place in a brick-and-mortar store environment, according to the U.S. Department of Commerce’s second-quarter e-commerce retail sales report. Still, upscale retailers are increasingly consolidating local market share into exclusively Class A retail properties. The death of the shopping mall is widely discussed and perhaps greatly exaggerated; high-end malls continue to find success as upscale consumers unleash pent-up demand and savings accumulated during the pandemic. However, due in large part to stagnant middle-class incomes and the struggles of stalwart anchors of middle-class consumption like J.C. Penney and Sears — as well as the general decline of department stores — many Class B and C malls have been left to compete with each other for declining shares of middle-market tenants in oversaturated markets. According to CoStar Group, U.S. mall properties had a vacancy rate of approximately 7.3 percent as of August 2021, representing the fourth consecutive annual increase. In an August report, Coresight Research estimated that 25 …

September 10, 2021

Features Hospitality

Select Assets Can Present Strong Opportunities for Hotel Investors

by Taylor Williams September 8, 2021

By David Vincent, investment products specialist, Cadre Asset selection in the hospitality investment market will be critical through the remainder of 2021, as particular hotels in select locations could thrive from new sources of growth and revenue, while others may sit on the wrong side of shifting demand. But investors shouldn’t completely write off the sector. Instead, they should keep their eyes wide open about specific opportunities with solid information that could support a potential increase in valuation. Travel on the Rise Stretching their wings after extended COVID-19-related isolation, Americans are now taking to the skies and highways in large numbers. A need to return to normalcy is driving increased demand for travel, boosted by the promise — and delivery — of vaccinations and then-falling infection rates. Confidence appeared to peak in the early summer, as major airlines announced profitable quarters and plans to hire and purchase planes more aggressively, according to reports by The New York Times. In July, the uptick in travel and lodging brought the national hotel occupancy rate to 71.4 percent — the highest level since summer 2019, according to data from CoStar Group. Now, amid the uncertainty of the Delta variant, the future of hospitality …

September 8, 2021

Conference Coverage Features Georgia Seniors Housing Southeast Southeast Feature Archive

After 18 Months, Seniors Housing Operators More Adept at Handling COVID-19 Crisis, Says InterFace Panel

by John Nelson September 7, 2021

ATLANTA — Seniors housing operators have been grappling the past 18 months with how to maintain their properties and keep occupancy high while also protecting their staff and residents, who are the most vulnerable population for infections and death from the COVID-19 outbreak. With the rise of the Delta variant in recent weeks, owners and operators are having to make tough decisions to care for their residents, although now they have built some muscle memory on how to operate effectively amid the pandemic. “We are better at dealing with COVID-19 now than before,” said Joe Jasmon, CEO and managing partner of American Healthcare Management. Jasmon added that alleviating the fear of COVID-19 and the Delta variant is a big part of an operator’s job, and bringing residents into their social programs is a major point of emphasis, even if it can only be done virtually. “There’s been a huge insurgence of Zoom calls,” said Jasmon. “Before it was once in a blue moon, and it would be a son or daughter who lived in Belize or somewhere. Now the entire family and friends are calling in. We have to cultivate that activity and encourage it.” Jasmon’s comments came during the …

September 7, 2021

Features Industrial Multifamily Office Retail

CBRE Survey: Cap Rates to Return to Pre-Pandemic Levels for Industrial, Office and Suburban Multifamily Properties

by Julia Sanders September 2, 2021

DALLAS — Industry professionals believe the commercial real estate values for industrial, office and suburban multifamily properties across the United States are expected to return to pre-pandemic levels or remain stable, hinting at a potential full recovery for the rest of 2021, according to a CBRE Group Inc. survey released on Aug. 31. CBRE’s survey looked at capitalization rates for stabilized assets and investment sentiment on market conditions. Capitalization rates measure a property’s value by dividing its net operating income by its sale price and a lower cap rate generally shows a higher value. In the survey, investors predicted cap rate movement will vary across different property types for the second half of 2021. For example, cap rates for industrial and multifamily properties are expected to compress in most markets, while the cap rates for office, retail and hotel properties are expected to stay steady. The survey also found that investors were willing to purchase industrial and multifamily properties at a premium or higher price than other property types. Additionally, investors looked mainly for small to moderate pricing discounts for office properties, and moderate to large discounts for retail properties and hotels. More than 75 percent of real estate investors …

September 2, 2021

Features Multifamily

How Multifamily Landlords Can Step Up Their Business Performance in Uncertain Times

by Taylor Williams August 31, 2021

By Jordan Cooper, director of verticals, Xero It’s difficult to guess anything about the housing and rental property markets of tomorrow given the conditions of today. Month after month of fluctuating prices, demand and availability have made renting a delicate dance for landlords and tenants alike. A recent IBISWorld report also pointed to an expected decrease in revenue for the larger apartment rental industry through 2021, but it’s not time to hit the panic button just yet. There are, in fact, a multitude of ways by which landlords and property managers can make their businesses steadier, more profitable and more beneficial to tenants — as well as to themselves. The first option — hiring outside help — creates the least work for owners, though it may not be the right addition to every landlord’s toolkit. In an industry with occasionally fickle financial situations, landlords can lean on the assistance of accountant or bookkeepers or seek counsel from financial advisors. Unless an owner already has the bookkeeping know-how, he or she is probably missing out on tax savings and seeing suboptimal returns on real estate investments. A qualified accountant can step in to keep the owner abreast of any and all …

August 31, 2021

Features Multifamily Seniors Housing Southeast

In Seniors Housing, Investment Decisions Should Be Based on Trusted Partners, Say InterFace Panelists

by Julia Sanders August 27, 2021

ATLANTA — The beginning of the COVID-19 pandemic made everyone question the future, and for investors and owners in the seniors housing business sector, things were rocky. The National Investment Center for Seniors Housing and Care reported the occupancy rate in seniors housing facilities decreased 680 basis points in 2020 to record lows. In 2021, there has been a renewed confidence in the economy as people return to working in an office and many Americans have been fully vaccinated against COVID-19. Additionally, occupancy rates in seniors housing properties have continued to rise. Now that things seem to be getting marginally better, the question many investors may be asking themselves is if they should buy, sell or hold assets in the current market? At the InterFace Seniors Housing Southeast conference in Atlanta, Ga. on Wednesday, Aug. 18, a group of industry-related leaders discussed the tips and tricks to survive in today’s market, as well as their predictions for the seniors housing sector in the future, during the “Investment Panel.” In a discussion lead by Marcus Van Ameringen, vice president of business development at 12 Oaks Senior Living, many of the investors in the panel mentioned the importance of making deals with …

August 27, 2021

Conference Coverage Features Multifamily Seniors Housing Southeast Feature Archive

Fitness Centers, Outdoor Spaces and Units All Becoming Larger, Say Seniors Housing Development Panelists

by Kristin Harlow August 25, 2021

ATLANTA — Driven by the desire of a healthy lifestyle, two areas that senior living developers are currently focusing on are the fitness center and outdoor spaces, according to Scott Gensler, vice president of business development with Erickson Senior Living. “Every time I look at a plan, the fitness center gets bigger and bigger and bigger,” said Gensler. “Then we open it, and it’s still not big enough.” Not only is the fitness center becoming larger, but it’s also becoming more of a prominent feature in Erickson’s continuing care retirement communities. Additionally, the outdoor spaces have gone from a secondary focus to a primary emphasis. As Gensler put it, having healthy residents is a win-win situation. Gensler’s comments came during “The Development Outlook” panel at the eighth annual InterFace Seniors Housing Southeast conference, which took place at Atlanta’s Westin Buckhead on Wednesday, Aug. 18 and drew 250 registrants. Joining Gensler on the panel were Michael Hartman, principal of Capitol Seniors Housing’s active adult platform; Alan Moise, chief investment officer of Thrive; and Janet Meyer, principal with BCT Design Group. David Kliewer, director with Grandbridge Real Estate Capital, moderated the discussion. Another development trend today is multi-function space, which increases efficiencies. …

August 25, 2021

Content Partner Features Leasing Activity Midwest Multifamily Northeast Single-Family Rental Southeast Texas Walker & Dunlop Western

Multifamily Outlook: Growth Undiminished by Pandemic-Related Disruptions

by Sarah Daniels August 23, 2021

The Roaring ’20s and the Great Wealth Transfer The United States is well on a path of recovery from the COVID-19 pandemic shutdown that began in March 2020. More than 60 percent of the U.S. population has now received at least one dose of the vaccine, and more than half are fully vaccinated. Those figures increase significantly by age, particularly for the 65+ population[1]. The economy is booming this year — it is estimated to have grown by 7.8 percent[2] in the second quarter following 6.4 percent growth in the first quarter of 2021. Unemployment remains low at 5.9 percent in June due to 7.9 million jobs created in the past year. Retail sales are up by 23 percent year-over-year.[3] Even the battered restaurant industry has recovered, with sales again surpassing grocery sales as of April 2021. Pandemic-induced disruptions to labor and trade finally began showing in inflation figures. Even excluding the more volatile food and energy sectors, inflation soared from 1.6 percent in March to 4.5 percent in June, the highest pace since 1991. However, expectations are that the price pressure is a temporary adjustment as the economy recovers. Core inflation is expected to end the year at around 2.2 …

August 23, 2021

Conference Coverage Features Multifamily Seniors Housing

Vaccination Mandates, Wage Increases Further Complicate Seniors Housing Labor Situation, Says InterFace Panel

by Taylor Williams August 19, 2021

By Taylor Williams ATLANTA — Even before the pandemic struck the United States in early 2020, rising labor costs were putting downward pressure on margins for seniors housing owners and operators. The public health and economic crises stemming from COVID-19 have only amplified the problem, say seniors housing professionals. In an industry where renters overwhelmingly belong to one of the most COVID-19-susceptible demographics, seniors housing operators are now wrestling with the question of whether to require staffers to get vaccinated. At the same time, they are battling widespread wage increases brought on by a labor shortage compounded by the steady flow of federal unemployment benefits. The net result is that both third-party operators and owner-operators of seniors housing properties — from independent living to skilled nursing — are seeing their costs rise. Simultaneously, these groups are also struggling to recoup occupancies and revenues lost to COVID-19. And while labor is not the only operating expense on the rise within the seniors housing space, it’s a unique line item in the sense that it has dual external forces acting upon it. This realization was not lost on a “power panel” of executives who own and operate seniors housing properties and who …

August 19, 2021

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