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FeaturesHeartland Feature ArchiveMultifamily

Four Factors for Planning a Post-Pandemic Multifamily Amenity Renovation

by Kristin Harlow

By Mary Cook, Mary Cook Associates As a commercial interiors firm, a question we hear a lot recently is “Are multifamily developers renovating amenities because of the pandemic?” The answer is a bit more nuanced than a straight “yes” or “no.” No, entire amenity floors are not being ripped out and re-thought in direct response to changes stemming from the pandemic. But yes, long-term lifestyle trends are emerging from the pandemic that should be a factor when redesigning amenity spaces for other reasons — whether they aren’t resonating with residents as anticipated, or simply look a bit outdated. After all, the key to creating successful, appealing amenities is understanding the attitudes and preferences of the residents that will use them. With that in mind, here are four priorities owners and operators should focus on when renovating amenities in a post-COVID world: Indoor-outdoor connections Early in the pandemic, the ability to open to the outdoors was the No. 1 factor that allowed indoor amenities to continue functioning. One year later and access to open-air amenities is still a top feature, according to Rent Café. And it’s easy to see why. People behave differently outside, feeling more at ease and comfortable, and …

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Anchin
Features

Under a New Administration, Understanding Your Tax Options is More Important than Ever

by Taylor Williams

By Paul Gevertzman and Joseph Molloy, CPAs and partners at Anchin As a general rule, uncertainty makes for a difficult environment, and this is especially true for the architecture, engineering and construction (AEC) industries, where business pipelines are defined by long-term commitments and relationships. We’ve seen a range of clients struggling at times throughout the pandemic. With many projects delayed and others cancelled, it has been an uneasy time. On the other hand, AEC companies involved with life sciences and healthcare projects, among other commercial real estate niches, are doing well. The takeaway is that many AEC firms are pivoting and adapting to meet rapidly shifting market needs. They are growing their capabilities in new and emerging niches outside of the traditional commercial and residential ground-up construction that has dominated the industries for years. Company realignment affects balance sheets, which means optimizing a tax strategy is critical to improving liquidity and preserving capital. There’s also the added wrinkle of government aid in the form of Personal Paycheck Protection (PPP) loans and Employee Retention Credits (ERC) — combined with a change of administration — which will hopefully bring much-needed financial assistance. PPP2, ERC As AEC firms saw halts on construction projects …

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FeaturesLoans

Loan Modifications Have Been Key to Keeping Deals Going, Mortgage Bankers Say

by Taylor Williams

Like the rest of the working world, commercial real estate lenders, intermediaries and borrowers have developed new ways of doing business over the last year. They recognize that mutual flexibility is crucial to keeping deals from falling through. At the most fundamental level, the pandemic has forced providers and arrangers of debt and equity to elevate their due diligence processes, to scrutinize terms of underwriting even more closely based on a variety of factors. Lenders have found themselves reckoning with political dynamics, revising loan terms for commercial properties based on the severity of COVID-19 infection rates and shelter-in-place orders in a given region. The nuts and bolts of dealing with elevated requests for loan modifications were central topics at the “Commercial Mortgage Stress in the Age of COVID-19” panel at the annual Mortgage Bankers Association (MBA) CREF 2021 event. The event was conducted in a virtual format this year. Mark Weibel, partner and chair of real estate capital markets practice group at law firm Thompson & Knight LLP, moderated this panel. The pandemic has produced clear winners and losers in terms of asset classes, forcing lenders to be more selective with their deals. In many cases, this selectivity has led …

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FeaturesHeartland Feature Archive

Matching Americans to Jobs Will Be Key to Economic Recovery, Says Economist

by Kristin Harlow

DES PLAINES, ILL. — When reflecting on the future of the economy and its recovery, sometimes it’s good to look back. For instance, one of the lessons learned from the pandemic of 1918 was that people will make up for lost time, says Scott Brown, chief economist for Raymond James. “That’s one of the reasons we had the Roaring ’20s.” Brown’s remarks came during the opening session of CORFAC International’s virtual spring conference on Wednesday, March 17. Brown hosted an hour-long panel on what’s driving the economy as well as the outlook for commercial real estate performance. Americans have made substantial gains in consumer spending on durable goods, according to Brown. Examples include the sales of motor vehicles, which have trended upward. Year-over-year increases in the consumer price index are likely to reach 3 percent this spring, but that is viewed as a rebound from low figures a year earlier. Inflation has risen to 2 percent and is on track to moderately exceed that figure. Keep in mind that government debt does not drive inflation, pointed out Brown. According to the economist, stimulus checks have not fueled a great deal of spending as Americans have utilized 70 to 80 percent …

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Experiential
FeaturesRetail

Experiential Retail Adjusts for a Post-COVID Comeback

by Katie Sloan

Shopping center owners thought the solution to combat online shopping was so crystal clear. Give them experiences. Provide social spaces. Make interaction the focal point. And this worked…for a while.  Entertainment and food and beverage operators soon absorbed the spaces left behind by traditional retailers. Old Sears locations became luxury movie theaters. Vacant in-line spaces could be taken over by Instagrammable pop-up experiences. Mall kiosks that once sold tchotchkes could now be occupied by virtual reality pods. Even mall food courts were redesigned as food halls, a cooler, sleeker older cousin.  Centers that created the right formula of fun, fashion and food were packed. It was all going so well until 2020. “All of us in the experiential business thought we were recession-proof,” says Bryan Severance, CEO of Fallout Zones, a family entertainment consulting and design firm in Las Vegas. “Even when the economy was down in 2008, people wanted to get out and have fun. The whole industry was building parks and experiences and making money. When the government tells you to shut down, though, it’s a totally different story. Turns out we’re not pandemic-proof.” Just as the experiential retail industry rode the high highs together, it is now …

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FeaturesStudent Housing

Student Housing Rounds COVID-19’s Twists and Turns, Light Shines at End of Tunnel

by Katie Sloan

By Kevin Larimer and Brandon Buell, Berkadia Throughout the COVID-19 pandemic, confidence fluctuated around the performance and resilience of student housing properties. Understandably, commercial real estate investors pressed pause at the beginning of last year, as there was no way to know what this global pandemic meant for property performance. However, with steady collections for student housing throughout the year, confidence quickly regained.  Towards the end of last year, occupancy was just shy of 90 percent and nimble investors who took notice started to pursue the available menu of opportunities. While data will show that COVID-19 had a clear impact on student housing operations, the level of disruption was limited. In fact, according to Berkadia research, sales during the fourth quarter accounted for more than half of 2020’s total transactions and dollar volume for student housing — further proving the overall resiliency of the industry.  Strong Out of the Gate in 2021 In addition to ending 2020 on a strong note, only a few months into 2021, we have already seen the student housing market show greater strength. In fact, in the first few weeks of January alone, our student housing-specialized team at Berkadia completed nearly $250 million in the …

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District of ColumbiaFeaturesSoutheastSoutheast Feature Archive

Property Managers in D.C. Can Avoid Unwelcome Property Tax Surprises by Managing Liabilities

by John Nelson

By Sydney Bardouil, Esq. After the tumult and disruptions of 2020, the last thing taxpayers need is another surprise. Our society craves predictability more than ever before, and commercial real estate owners want predictability in their property taxes. In the District of Columbia, commercial real estate owners keen to make their future expenses more predictable can start by familiarizing themselves with the full gamut of real property liabilities. In addition to the standard annual property tax, the District imposes a variety of charges on real estate that vary by the property’s location, use and payment history. Managing these real estate charges can help a taxpayer budget for upcoming expenses and minimize the risk of incurring unplanned costs. What follows is a primer to help taxpayers manage real property tax liabilities in the District. Start with the basics The DC Office of Tax and Revenue (OTR) recently launched MyTax.DC.gov, a new taxpayer website intended to streamline the tax assessment and billing processes. This single portal offers insight into taxes on individual income, businesses and real property, as well as fees administered by OTR. The site features self-service tools that enable taxpayers to review and pay property tax bills online, view assessment …

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Bradley Student housing
FeaturesFinance InsightLoansMidwestMultifamilyNortheastSoutheastStudent HousingTexasWestern

Student Housing Q&A with Timothy S. Bradley, Founder, TSB Capital Advisors

by Sarah Daniels

Student housing demonstrated its resilience in the face of COVID-19 challenges, but what can the industry expect going forward? Timothy S. Bradley, founder, TSB Capital Advisors, and principal, TSB Realty, sat down with Finance Insight to discuss financing and expectations for student housing in the fall of 2021 and beyond. Finance Insight: How was 2020 for TSB? Bradley: We were fortunate. Many observers assumed the student housing industry would be devastated by COVID-19-forced school closures and campus clusters. Instead, thanks in large part to the rational and institutional nature of our major operators, investors and lenders, the industry proved its resiliency once again. We were affected by the pandemic, of course, and had to adjust some of our early year projections, but TSB companies still closed on a total transaction volume of approximately $4 billion, including construction loans, stabilized term loans and interim loans, as well as sales, and joint venture partnership consultations. There will be other challenges our industry faces in the years to come, but it’s difficult to imagine a more challenging singular event than the one we experienced this year with COVID-19. All things considered, we felt very good about 2020, and we’re even more optimistic about 2021. …

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Affordable HousingFeaturesMultifamily

Making the Case for Market-Rate Affordable Rental Housing, an Essential Part of Healthy Communities

by Jeff Shaw

By R. Michael Goman, Goman+York In recent years, much of our work has focused on helping our client communities encourage the development of new market-rate affordable housing units. For our purposes, we define market-rate affordable rental housing as housing that is available at rental rates equivalent to 80 percent to 100 percent of 30 percent of the area median income (AMI). It also means that after paying rent, residents still have enough money for food, transportation, health care and similar needs. Rental rates below 80 percent of 30 percent of AMI typically indicate residents who require financial assistance, which falls into a different category. Our advice to communities typically revolves around a few key issues: location, market and financial feasibility, economic impact, and local land-use issues. These are factors that a potential developer will review when considering a possible development opportunity. Our goal is to help the community put together the best possible story that addresses each of these issues in a real-world, quantitative way. The Right Site As with many real estate projects, location is key to success. Optimal sites for new market-rate affordable rental projects are those located near concentrations of employment. The available jobs don’t have to …

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Matt Pipitone Fannie Freddie Seniors Housing
FeaturesFinance InsightMidwestMultifamilyNortheastSeniors HousingSoutheastTexasWestern

M&T: Positives in Seniors Housing Include Rate Environment, Available Assistance

by Sarah Daniels

The seniors housing industry has had a particularly challenging year. But the latest data from NIC MAP shows COVID cases are down in nursing homes and occupancies are expected to rebound from historic lows in the coming months, says Matt Pipitone, seniors housing platform manager with M&T Realty Capital Corp. (MTRCC). It remains to be seen how quickly leasing will ramp up and to what extent rents and incentives will be impacted long term. But in the meantime, Pipitone points to some positives on the financial side of the industry. Namely, the government has provided several rounds of stimulus money, which has helped operators, especially those who manage skilled nursing facilities. And Fannie Mae, Freddie Mac and HUD have offered assistance to borrowers in the form of forbearance programs and other debt service relief. The agencies also remain active, but are cautious when treading in the sector, Pipitone says. “Fannie and Freddie have pulled back. Overall leverage is down, and there are debt service reserves required on new deals. But the rate environment is still really good. HUD, on the other hand, has been really steady. Borrowers can still get up to 80 percent loan-to-value with 1.45 times debt service …

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