Features

InterFace Panel Predicts Wave of Student Housing Investment Sales Transactions in Second Half of 2021

by Katie Sloan July 22, 2021

AUSTIN, TEXAS — In 2020, the COVID-19 pandemic brought an unexpected interruption to the student housing investment sales market. Following a strong leasing season for fall 2021, executives are seeing increased interest from buyers and sellers in the space, leading many to wonder what the next two quarters of 2021 will look like. In a discussion led by Kieran O’Shea, managing director of Eastdil Secured, at the InterFace Student Housing conference in Austin, Texas, last week, a group of industry-leading owners and brokers offered up their predictions on the expected transaction volumes through the end of the year and took a closer look at who is buying and selling in the space today. Based on sales volume and pipeline, Teddy Leatherman, senior director with JLL, predicted that the period from now until the end of the year will exhibit the busiest sales transaction volume seen by the sector in recent years. “When you add up the very impressive performance of the sector, the attractive underlying fundamentals of the space and the very attractive yield premium seen today, we expect to see an opening of the floodgates and a breakthrough of pent-up demand, which has been building over the course of …

July 22, 2021

Features

How Criminals Use Real Estate to Launder Money, and What Can Be Done to Stop It

by Taylor Williams July 20, 2021

By Matt Long, head of anti-money-laundering solutions, Quantexa Real estate is particularly attractive to criminals in the same way it is to any legitimate investor. It is a common component of a measured investment and/or business strategy and is highly likely to appreciate over time. In fact, according to a recent report by the European Parliament, the share of real estate in criminal assets confiscated, which can be used as an indicator as to how much money is laundered through real estate, was estimated at 30 percent between 2011 and 2013. It was also noted in the latest Europol report looking at organized crime trends in the European Union that most criminal groups and networks (68 percent) use money laundering methods, such as investing in property, to try to legitimize or hide their illicit proceeds. For criminals, real estate investments provide a cover of respectability and legitimacy that involves “explainable” high-value single amounts and are frequently subject to reduced scrutiny in many global jurisdictions. In fact, a number of techniques are used by criminals to cover the identities of both themselves and the illicit sources of funds used to purchase property — cash, shell companies, trusts. As seen in various …

July 20, 2021

Acquisitions Conference Coverage Development Features Leasing Activity Multifamily Student Housing Texas Texas & Oklahoma Feature Archive

‘Power Panel’ at InterFace Event Provides Positive Outlook for Student Housing Sector Post-COVID-19

by John Nelson July 15, 2021

Moving toward the start of a fresh academic year, the outlook for the student housing industry keeps getting brighter. A testament to the industry’s movement out of the pandemic is taking place at the InterFace Student Housing conference in Austin, where nearly 1,300 attendees have been able to gather in-person for the first time since April 2019. This year’s event, which concludes today, is taking place at the JW Marriott downtown. The student housing sector banded together like never before in the face of COVID-19 and truly worked as a team throughout the pandemic, with the ultimate goal of keeping students as safe as possible. The sector’s resilience during the pandemic and optimism regarding the year ahead were the driving discussion points during the conference’s “Power Panel” on Wednesday, July 14, which brought together a consortium of high-level executives to discuss industry trends, their experiences with COVID-19 and the outlook for the upcoming academic year. “The past 18 months have been a whirlwind of uncertainty,” began moderator Peter Katz, executive director at Institutional Property Advisors, a division of Marcus & Millichap. “While our sector has been historically categorized as recession-resilient, we would all now claim it to be pandemic-resistant.” “Student …

July 15, 2021

Affordable Housing Features Loans Multifamily

Fannie Mae, Freddie Mac Go All-In on Affordable Housing Lending Following FHFA Revision

by John Nelson July 13, 2021

A few weeks before Thanksgiving last year, the Federal Housing Finance Agency (FHFA) made sweeping changes to Fannie Mae and Freddie Mac’s multifamily business pursuits for 2021. The FHFA revised the previous structure that capped loan production at $200 billion combined for both government-sponsored enterprises (GSEs). And unlike most years, that cap was spread across five quarters spanning from the beginning of fourth-quarter 2019 to the end of 2020. For 2021, the FHFA is once again using the traditional four-quarter time frame but is now directing the agencies to produce $140 billion in multifamily loans combined ($70 billion apiece), which is lower than $159 billion in loans closed by the GSEs and their lending partners last year: $76 billion for Fannie Mae and $83 billion for Freddie Mac. The FHFA is again doing away with its long list of exclusions for loans on properties that don’t count toward the cap. In the past, the agencies had no limits to finance certain multifamily categories, including communities with five to 50 units, seniors housing, rural properties and manufactured housing. The FHFA is maintaining its directive for the agencies to finance properties deemed as “mission-driven affordable housing” — or those affordable to households …

July 13, 2021

Features Illinois Multifamily

Origin Investments: Phoenix Tops List of Cities for Investing, Developing Multifamily Properties

by Julia Sanders July 9, 2021

CHICAGO — According to Origin Investments, a Chicago-based private equity real estate firm, the seven multifamily markets in the United States best poised to capitalize on post-pandemic trends are: Phoenix; Atlanta; Charlotte, North Carolina; Austin, Texas; Raleigh, North Carolina; Nashville, Tennessee; and Tampa, Florida. Origin’s analyzed 150 markets to identify the cities with the highest chance of success as pandemic restrictions loosen. Origin has been refining this model for the past three years to inform its investment strategy and acquisitions. All these cities are undergoing economic development that will spur rent growth and attract institutional real estate investment. The following is a breakdown of what industries each state grew in: 1. Phoenix: Phoenix’s economy grew during the pandemic with an increase of jobs in trade, transportation and utility. Arizona State University’s industry-leading cybersecurity, artificial intelligence and analytics programs continue to produce a strong labor pool for tech employers. Intel and Taiwan Semiconductor will break ground soon on facilities that are already drawing related investments. Additionally, robust hiring and affordable housing put Phoenix at the intersection of rent growth and capital demand. 2. Atlanta, Charlotte and Austin (three-way tie for second place): Atlanta is evolving into the tech capital of the …

July 9, 2021

Acquisitions Content Partner Data Centers Development Features Industrial Midwest NAI Northeast Southeast Texas Western

From Hype to Hyperscalers: NAI Global Discusses Trends for Data Centers

by Sarah Daniels July 8, 2021

Data centers have exploded in importance over the last year and a half. Kevin Goeller, principal, NAI KLNB, has over 21 years of experience in the field of data center development, sales and leasing, but says that, lately, exponential change is driving demand in this asset class. He spoke to REBusinessOnline about the booming need and limiting factors for data centers. REBusiness: Tell us about the sudden, increased demand for data centers. What amount of this demand is due to the pandemic driving people to work from home? What amount of the demand is here to stay? Goeller: Prior to the pandemic, we were already in an upward curve because of the added disciplines of 5G and edge data centers contributing to the already competitive growth of the hyperscalers and multitenant data centers. Data center development didn’t have the interest from institutional investors that it does today; these assets were just starting to get these institutions to chase them as a real estate discipline. Fast forward to the pandemic, which added Zoom, Microsoft Teams and other video conferencing and work-from-home needs. These put additional pressure on an already pressurized discipline, an asset class already trying to adapt and grow. REBusiness: …

July 8, 2021

Features Retail

U.S. Retail Sector Recovers Faster Than Expected, Says National League of Cities

by Julia Sanders July 7, 2021

WASHINGTON, D.C. — In 2020, the retail sector suffered due to shutdowns and pandemic restrictions on businesses. Additionally, in April 2020, the U.S. unemployment rate reached 14.7 percent, which is the highest it’s been since the Great Depression, according to CNBC. However, the COVID-19 pandemic influenced the retail industry in a positive way by speeding up some pre-existing retail trends, according to the National League of Cities’ (NLC) new report, The Future of Cities: Re-envisioning Retail. The report shows the key trends in the retail industry and explains how local governmental officials can continue to facilitate positive change in the retail sector. The NLC report found that even though retail industry jobs declined fast last year, now the industry has bounced back more quickly than expected. The Bureau of Labor Statistics reported that the U.S. economy added 850,000 jobs in June, including a 194,000 increase in bar and restaurant jobs and an increase of 67,000 jobs in the retail sector. Many retailers struggled last year due to lockdowns and less income for consumers to spend. The NLC reported that in 2020, more than 12,200 major retail chain stores closed permanently, which equals to 159 million square feet of emptied retail …

July 7, 2021

Content Partner Features Leasing Activity Midwest Multifamily Northeast Southeast Texas Walker & Dunlop Western

Re-Evaluating Valuations: One Year Later

by Sarah Daniels July 6, 2021

Four months into the pandemic, Meghan Czechowski, valuation lead for Apprise by Walker & Dunlop and managing director of the Midwest Region, advised multifamily appraisers not to jump to conclusions about the long-term impacts of the pandemic. “We did advise caution, and it ended up playing exactly the way we thought it would: results differed market by market and asset by asset. That’s how we approach valuation at Apprise to start with, and that approach is how most of the appraisal industry wound up valuing multifamily throughout the pandemic.” Over a year after her initial assessment, Meghan spoke again to REBusinessOnline about what has changed in the world of multifamily appraisals and where those changes are trending. Incorporating Valuation Data from 2020 Early in 2020, there was a general assumption that there would be a discount in multifamily values, but there were no sales to support that assumption until June/July of last year when sales comps appeared on properties in most markets. Now it is essential to ensure that the data Apprise collects reflects the current reality. Once the shutdowns ended, data collection became easier. Czechowski says that real-time information allowed for an even better way to understand, analyze and …

July 6, 2021

Features Retail

Multi-Tenant Shopping Centers Gain Favor With Investors

by Jeff Shaw July 1, 2021

By Kevin Fryman, Executive Vice President, Hanley Investment Group British entrepreneur and adventurer Sir Richard Branson, head of Virgin Group Ltd., said, “Every success story is a tale of constant adaption, revision and change.” Certainly, as retailers grappled with the impact of COVID-19 restrictions, those that could quickly pivot and adapt were the winners. Even Charles Darwin said, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Looking back on the past few years in retail, American consumers were already shifting their purchasing habits. These shifts include experience-spending versus material goods and homes; casual fashion in response to more relaxed dress codes; convenient online ordering, delivery services and drive-thru pick-up for time-starved consumers; as well as the rise of e-commerce, mostly in the form of competition from Amazon.com and Walmart. However, once the lockdowns occurred in response to the pandemic, emerging trends such as online ordering, mobile delivery and omnichannel became permanent. Other 2020 trends that made nearly daily headlines were the number of retailers and restaurant companies that had filed for bankruptcy or were closing stores. Coresight Research reported 8,953 closures last year as the COVID-19 pandemic …

July 1, 2021

Features Multifamily Seniors Housing

Fannie, Freddie Undeterred in Commitment to Seniors Housing Borrowers

by Kristin Harlow June 29, 2021

Many parts of the seniors housing industry slowed as a result of the COVID-19 pandemic, including the lending market. Fannie Mae and Freddie Mac, the two giant government-sponsored enterprises (GSEs), experienced a significant pullback in deal volume in 2020, but remained two of the larger capital sources in the sector. “We are the predominant lender in the space,” says Steve Schmidt, national director of seniors housing loan production with Freddie Mac. “We stayed active at the height of the pandemic. Our underwriting changed, but we were still very active.” Freddie Mac’s annual lending volume in the seniors housing sector fell 45 percent year over year, from $3.8 billion in 2019 to $2.1 billion in 2020. Fannie Mae’s drop was even more dramatic. After growing from $2.3 billion in 2018 to $3.1 billion in 2019, volume dropped 71 percent to below $1 billion in 2020. Fannie Mae declined to be interviewed for this article. “Considering that year-over-year seniors transaction volume was down significantly, the agencies proved to be a tremendous source of liquidity in the market,” says Ryan Stoll, national director of seniors housing and care for Bellwether Enterprise. One reason Freddie Mac stayed active is that the organization’s mission is …

June 29, 2021

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