Features

Walker & Dunlop: U.S. Economy Displays Long-Term Signals for Recovery, Growth

by Sarah Daniels April 27, 2021

Back to Normal? The U.S. economy has improved significantly since April 2020, the peak of the pandemic-induced recession. The national unemployment rate stood at 6.0 percent in March of this year, well below the peak of 14.8 percent in April 2020. Companies were effective in implementing work-from-home technology, keeping unemployment rates for office-based service sectors relatively low. For those with a bachelor’s degree or higher, unemployment rates were only 3.7 percent as of March 2021. In 2020, third-quarter GDP growth made up much of the second-quarter losses, followed by 4 percent annualized economic growth in the fourth quarter. Retail sales also rebounded quickly, returning to pre-pandemic levels by June and continuing to increase through the beginning of 2021. However, the U.S. economy is still far from “normal.” Of the 22 million people who lost jobs in March and April 2020, only 57.8 percent had regained employment by March 2021. Stronger growth should return jobs to industries hit hardest during the pandemic. In March of this year, restaurants and bars added 176,000 jobs; arts, entertainment and recreation venues added 64,000 jobs and accommodations added 40,000 jobs. Still, employment in the overall leisure and hospitality sector is down by 3.1 million, or 18.5 …

April 27, 2021

Conference Coverage Development Features Multifamily Seniors Housing

InterFace Panel: Seniors Housing Developers Continue to Build Projects Through Pandemic

by John Nelson April 23, 2021

The seniors housing industry has had a rough ride through the COVID-19 pandemic. First-quarter occupancy clocked in at a record-low 78.8 percent, a drop of 870 basis points from the year prior, according to the National Investment Center for Seniors Housing & Care (NIC). But seniors housing is a needs-based product, and most industry professionals expect a strong rebound. As a result, new construction projects are starting to make a comeback in preparation for pent-up demand. That was the topic of discussion during “The Power Panel: CEOs Discuss the State of Development” at France Media’s InterFace Seniors Housing Development, Design & Finance conference, held virtually on April 20 and 21. Panelists included Marco Vakili of Alliance Residential; Keven Bennema of Charter Senior Living; moderator Kevin Kinigstein of Cox, Castle & Nicholson; Scott Stewart of Capitol Seniors Housing; and Torsten Hirche of Transforming Age. “The pandemic was a double whammy. Revenue is going down and expenses are going up,” said Stewart. “The good news is it wasn’t as bad as we thought. Fast forward to where we are today, we’re essentially at the same occupancy level as we were in March of 2020. That gave us the green light for developing.” …

April 23, 2021

Affordable Housing Build-to-Rent Features Multifamily Seniors Housing Single-Family Rental Student Housing Western Feature Archive

‘Astronomical’ Multifamily Investment Demand Drives Up Pricing, Says Marcus & Millichap’s IPA Panel

by John Nelson April 21, 2021

The U.S. multifamily sector remains an attractive option for real estate investors looking for a safe haven. Beyond the pool of traditional buyers who are actively acquiring apartment properties, the sector has become a landing spot for companies that aren’t legacy multifamily owners. Steven DeFrancis, CEO of Cortland, cited REITs like Blackstone Real Estate Investment Trust as newly establishing a presence in the multifamily sector. BREIT recently made a $240 million preferred equity investment in Tricon Residential connected with Tricon’s purchase of single-family rental (SFR) homes in Nashville. Nuveen Real Estate is also a recent institutional investor entrant in the emerging SFR sector. “We’re seeing a lot of new capital, whether it’s coming from overseas or from here,” said DeFrancis. “Institutional capital is continuing to move into real estate, and then within real estate there’s a lot of movement from other sectors into multifamily.” Jessica Levin, senior director of acquisitions at Intercontinental Real Estate Corp., said that the influx of capital into the U.S. apartment market the past six months has been “astronomical.” She also said that there’s no slowdown ahead. “Competition is stiffer now than in the past 10 to 15 years, and it’s only going to increase from …

April 21, 2021

Build-to-Rent Content Partner Features Loans Midwest Multifamily Northeast Single-Family Rental Southeast Texas Walker & Dunlop Western

Build-for-Rent Space May Outperform Conventional Multifamily on Occupancy, Rents

by Sarah Daniels April 19, 2021

The past few years have seen a surge in interest in single-family rental (SFR) and build-for-rent (BFR) spaces in commercial real estate. Traditionally the domain of small- and medium-sized investors, the SFR/BFR space has begun to attract institutional investors. BFR, in particular, can often offer higher occupancy levels and rents while promising lower capital and operating costs than traditional multifamily housing. Keaton Merrell, managing director, Capital Markets, Walker & Dunlop, spoke to REBusinessOnline about debt and equity in BFR, as well what to know when it comes to agency involvement. First, Merrell briefly clarifies the terminology: “Oftentimes, people use SFR and BFR interchangeably. They are two totally separate asset classes and are looked at differently by capital. SFR is defined as a cluster of homes in various geographies that are pooled together for investment purposes. BFR is purpose-built housing within contiguous rental communities, much like traditional multifamily properties.” For a more in-depth look at the SFR and BFR in general, read more on the asset class here. REBusinessOnline: What is the current state of debt and equity capital in the market when it comes to BFR? Merrell: I will start with equity and then move on to debt. The equity that is coming into the …

April 19, 2021

Features Healthcare Office

Medical Coworking Space Can Bolster Office Occupancy

by Taylor Williams April 15, 2021

By Sunny Somaiya, co-founder, WellnessSpace As we navigate what working life and office spaces will look like in a post-pandemic world, one thing is certain — they will not be the same as before. With many companies realizing during the pandemic that their employees can be just as or even more productive working from home, demand for office space may remain low for the foreseeable future. Remote work should thus continue to be a popular option. However, for businesses that require office space but face unprecedented uncertainty about their futures, renting traditional office space may not be the best solution. This is particularly true for private medical and wellness practices, and that is where coworking spaces come in. Coworking spaces have been around for many years and are undergoing a transformation of their own. They provide a great middle-ground choice for businesses that are looking for spaces but want to increase flexibility and avoid signing long-term leases. While traditional coworking spaces appeal to entrepreneurs and business owners, niche coworking spaces have risen in popularity in recent years to meet the demands of specific individuals. Medical and wellness coworking spaces represent a new breed that satisfy an unmet demand for flexible …

April 15, 2021

Features Retail

UBS Predicts 80,000 US Retail Stores to Shut Down by 2026

by Julia Sanders April 13, 2021

ZURICH, SWITZERLAND — According to UBS, a global finance and research firm based in Zurich, 80,000 retail stores in the United States are predicted to close their doors by 2026. This report assumes e-commerce sales will rise to represent 27 percent of total retail sales. The current share of e-commerce is 18 percent for all retail sales. There were 115,000 shopping centers at the end of 2020, which includes strip centers, outlet malls, shopping malls and other lifestyle retail centers. This figure compares to 112,000 shopping centers in 2010 and 90,000 in 2000, according to an UBS analysis using data from the International Council of Shopping Centers (ICSC). The UBS report suggests that the United States has too much retail space per capita, with about 59 square feet of shopping center space per household. Many retailers are taking advantage of how cheap rent is right now, and the plentiful amount of vacant retail space. Beauty, grocery and discount goods retailers like Ulta Beauty, Dollar General and TJX Cos. brands like T.J. Maxx and Marshalls are expecting a rebound in sales with end of the pandemic in sight. Additionally, UBS says that the government stimulus such as the $1.9 trillion stimulus …

April 13, 2021

Build-to-Rent Development Features Multifamily Single-Family Rental

Build-For-Rent Sector Gains Traction As Renters Seek More Space

by Jeff Shaw April 8, 2021

As more renters consciously choose not to become homebuyers, the build-for-rent (BFR) industry is quietly emerging as a new force in commercial real estate. In fact, both the burgeoning BFR and single-family rental (SFR) sectors are generating considerable interest from institutional investors in the wake of the pandemic. Industry experts outlined some of the causes and effects taking place within the BFR and SFR business segments during a webinar hosted by France Media on Wednesday, April 7. The event was titled “Everything You Need to Know About the Single-Family Rental and Build-For-Rent Market.” Moderated by David Howard, executive director of the National Rental Home Council, panelists included Keaton Merrell, managing director, Walker & Dunlop; Jonathan Ellenzweig, chief investment officer, Tricon Residential; Don Walker, managing principal and chief financial officer, John Burns Consulting; and Mark Peterson, director of the Build-for-Rent (BFR) division at SVN | SFRhub Advisors. Strong Real Estate Vital Signs Single-family rentals have hit a 25-year high in occupancy, according to John Burns Consulting. Occupancy rates for the product type are at 95 percent as of the fourth quarter of 2020. The BFR and SFR sectors have grown as more of the population yearns for a home, but finds …

April 8, 2021

Broadstone-Watch-City-Waltham-Massachusetts

Affordable Housing Features Multifamily

COVID-19 Changed the Way We Calculate Affordable Housing Property Taxes

by Jeff Shaw April 6, 2021

By Carlos Suarez, Popp Hutcheson After a pandemic year that decimated rental incomes, owners of affordable housing properties should prepare to protest property tax assessments that overstate their liability. As stay-at-home orders in 2020 forced businesses across the county to change their operations, a large portion of the labor force began to work from home. But many renters, including a large contingent of affordable housing residents, found themselves without jobs and struggling to pay rent. Job losses and other issues related to COVID-19 adversely affected tenants and property owners alike, straining rental income while adding the cost of new safety procedures and equipment to landlords’ operating costs. To reduce property tax liabilities and limit financial losses from the pandemic, it is now crucial for owners of affordable housing to correctly navigate procedures across jurisdictions and weigh all relevant valuation considerations for their properties. Here are key areas for affordable housing owners to consider in arguing for a lower assessment. Procedures have changed The global pandemic transformed interactions between appraisal districts and property owners throughout the 2020 tax year. Many appraisal districts across Texas closed their doors to the public and shifted formal and informal meetings to a virtual setting to …

April 6, 2021

Acquisitions Features

Wave of Distressed Real Estate Assets Builds

by Taylor Williams April 1, 2021

By Nicholas Minoia, owner, Diversified Properties Changing consumer behaviors and financial pressures stemming from the COVID-19 pandemic, coupled with an inevitable rise in interest rates, will soon trigger the release of a wave of distressed real estate assets that will hit commercial markets across the nation. As this wave of distressed assets begins to crest in the months and years to come, creative and experienced investors will be afforded rare opportunities to uncover value across asset classes in some of the most competitive regions in the country. However, as these properties often represent the most complicated and high-risk types of investments, it is important that investors fully understand not only how to identify and value distressed assets, but also how to create a strategy that will allow them to unlock the value hidden in these unique properties. Identifying Distressed Assets The complexity of modern real estate ownership means that stress can come at any point for a property, and from countless directions. Family or joint venture ownerships might run into partnership disputes or estate issues. A developer might suddenly face costly environmental concerns, legal challenges, significant supply chain shortages, price increases or problems with a contractor. A long-term owner could …

April 1, 2021

Content Partner Features Hospitality Midwest NAI Northeast Office Southeast Texas Western

Evaluating the Volume of Distressed Properties in the Wake of COVID

by Sarah Daniels March 31, 2021

Many in commercial real estate expected a tsunami of COVID-related distressed properties in 2020 and 2021. So far, the wave hasn’t materialized, says Jay Olshonsky, president and CEO of NAI Global. Businesses have been sustained by exogenous factors that may or may not keep them from foreclosure or receivership in the long term. In many cases, lender forbearances or flexible plans have simply extended the window in which distressed properties may eventually revert to receivership. Olshonsky spoke to REBusinessOnline about receivership activity and what the industry expects over the next 12 months. Delays: Lessons from the Global Financial Crisis, Plus Current Factors As court-appointed receivers, NAI’s representatives act as the owner and operator of properties in foreclosure on behalf of the court. A receivership needs to have the capability to lease the property, pay taxes and handle accounting — basically, taking over all aspects of managing a property and keeping it functioning, Olshonsky says. Much of how NAI Global has chosen to approach the current receivership landscape originated in the lessons of the 2007-2008 financial crisis. During the early stages of the pandemic, NAI knew there would be fallout that would force some businesses into foreclosure, servicing, note sales or similar …

March 31, 2021

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