Features

Lenders See Opportunity Amid Adversity, Forecast Survey Reveals

by Sarah Daniels March 3, 2021

By Matt Valley Despite a tumultuous 2020, a year in which the country was turned upside down by a deadly pandemic that led to economic upheaval, the commercial real estate lending community overwhelmingly believes brighter days are ahead on the business front. France Media’s 2021 forecast survey of direct lenders and financial intermediaries nationally reveals that 84 percent of respondents expect the total dollar amount of commercial and multifamily loans closed by their firm this year to increase when compared with 2020 deal volume. Only 6 percent of survey respondents anticipate business volume will decrease at their firm on a year-over-year basis, and 10 percent project business volume will remain the same. “I expect our loan volume to increase by 50 percent in 2021 versus 2020, as many lenders were unable to make decisions or even set loan policies during COVID,” says Ben Kadish, president of Maverick Commercial Mortgage, a Chicago-based mortgage banking firm. “As the vaccine process expands, and the world opens up, lending for more property types will expand. Some lenders will start looking at retail, office and hospitality now.” As of late February the death toll in the United States from COVID-19 had surpassed 500,000, according to …

March 3, 2021

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

Walker & Dunlop: Single-Family Rental and Build-for-Rent in High Demand

by Sarah Daniels March 2, 2021

A number of factors are driving an increase in demand for single-family rental assets. Declines in home ownership rates, increasing demand/short supply for multifamily options and baby boomer renting preferences have made renting these single-family properties an increasingly popular choice. Meanwhile, COVID-19 spurred increases in teleworking that created a desire for additional space in the home and allowed more people to move to suburban locations — accelerating demand for single-family rental properties. Seeing the growing demand and increasing rents in the single-family rental (SFR) and build-for-rent (BFR) sector, Walker & Dunlop has created a new team — Walker & Dunlop SFR & BFR Practice Group — to provide investors information on construction, bridge lending, permanent financing, equity structuring and property sales, for a market estimated at $3.4 trillion (compared to $3.5 trillion for the multifamily market).1 Popularity, high occupancy and increasing rent rates have drawn the attention of larger investors to SFR and BFR assets, according to Kris Mikkelsen, executive vice president of investment sales with Walker & Dunlop. “Currently, larger investors make up less than 2 percent of the SFR market, which has been traditionally governed by individuals or small-scale parties. But that number will increase as investors recognize …

March 2, 2021

Features Finance Insight Midwest Multifamily Northeast Southeast Texas Western

Q&A with Trevor Koskovich, President of Investment Sales for NorthMarq

by Sarah Daniels March 2, 2021

NorthMarq has added a multifamily investment sales team to its Charlotte and Raleigh, N.C., offices. The new team, which consists of Andrea Howard, Jeff Glenn, John Currin, Allan Lynch and Caylor Mark, all formerly of JLL, brings NorthMarq’s investment sales locations to 18. This addition also allows NorthMarq to expand its visibility, Carolinas coverage and service offerings to clients as the firm sets its sights on high-growth markets. Trevor Koskovich, NorthMarq’s president of investment sales, sat down with Finance Insight to discuss the multifamily investment sales market and his new five-person team. Finance Insight: What does this new team and location add to the NorthMarq platform and breadth of services? Koskovich: The new Raleigh and Charlotte locations allow NorthMarq to be in lower-regulation, high-growth U.S. regions. From an investment sales perspective, we’re really targeting high-growth markets for population movement and investment sales transaction volume. Raleigh and Charlotte continue to be part of this conversation, and we’re super excited about our new team’s ability to service those markets. This new team will help us drive more business through the Southeast and in overlapping markets, including Nashville, Chattanooga and north Florida. These team members are an integral part of our growth platform, …

March 2, 2021

District of Columbia Features Southeast Southeast Feature Archive

NRF: US Retail Sales to Grow Between 6.5 and 8.2 Percent in 2021

by Julia Sanders March 1, 2021

WASHINGTON, D.C. — The National Retail Federation (NRF) predicts that U.S. retail sales will grow anywhere from 6.5 percent to 8.2 percent this year, with a total of more than $4.3 trillion in sales. The NRF attributes the expected growth in retail sales to the effectiveness of the COVID-19 vaccines over the course of the year, which will lead to stores to be frequented en masse. Many Americans were homebound in 2020 and so in turn they shifted to a more e-commerce focus. Online sales grew by 21.9 percent last year to total $969.4 billion in sales. The NRF reported that overall retail sales grew 6.7 percent to $4.1 trillion last year. (The numbers exclude automobile dealers, gasoline stations and restaurants.) E-commerce is anticipated to grow even more in 2021, with the NRF predicting a 18 to 23 percent growth rate and for online sales to hover around $1.14 trillion to $1.19 trillion. Additionally, the Washington, D.C.-based trade group expects the economy to gain from 220,000 to 300,000 jobs each month this year. Overall, the NRF predicts GDP annualized growth of 4.5 to 5 percent, up from the 4.1 percent annualized growth in fourth-quarter 2020. NRF’s chief economist Jack Kleinhenz …

March 1, 2021

Features Multifamily

Technology Implementation Lies at the Forefront of Multifamily Design

by Taylor Williams March 1, 2021

By Michael Procopio, vice president of development, The Procopio Cos. Undeniably, as we progress through 2021, one of the hottest trends in the field of owning and operating multifamily properties will continue to be technology and automation. According to the 2019 Zillow Consumer Housing Trends Report, 43 percent of Gen Z buyers and 35 percent of millennials rated smart home features as “very important.” Although Zillow’s 2019 report shows that older generations are less concerned with smart technology, we know that the desire for technology will continue to grow as younger generations enter the market to rent and buy and as older generations adapt to its use and convenience. Evolution of Amenities For decades, as the multifamily amenity wars heated up, residents placed an increasing focus on lifestyle amenities. Just having a gym was no longer appropriate; robust fitness centers with boutique offerings like yoga, spin and rowing became the norm. Basic lounges gave way to designer-finished club and sport spaces, where virtual golf replaced ping-pong, and interconnected coworking suites replaced the ever-so-sterile business centers of the 2000s. As we progress further into the 2020s, it’s becoming clearer that the focus on technology as it impacts the resident experience will …

March 1, 2021

Gregg Gerken, Head of Commercial Real Estate for TD Bank

Affordable Housing Features Finance Insight Loans Midwest Multifamily Northeast Southeast Texas Western

TD Bank: Why We Need to Address Affordable Housing Needs Now

by Sarah Daniels February 26, 2021

By Gregg Gerken, Head of Commercial Real Estate for TD Bank Even prior to the COVID-19 pandemic, it was a struggle to build or find affordable housing. But since the pandemic broke out, finding affordable housing may be even harder for those who now need it most. A Problem Made Worse by a Global Pandemic The lack of affordable housing was an urban, suburban and rural problem even before COVID-19. Rent-burdened families and seniors living on a budget reside in almost every small and large city in America. While the $600 per month unemployment payments, stimulus checks and extension of eviction moratoriums have helped, the bottom line is that those most affected by COVID-19 financially still have the longest road to recovery and need more assistance – especially affordable housing – to get back on their feet. The Tenant Versus Landlord Narrative Multifamily housing renters are trying hard to make rent, but some just can’t, and that hardship then tilts onto landlords who are trying to cover payroll, taxes, utilities, upkeep and mortgages. The looming crisis now is that millions of renters are behind on their rent with approximately $70 billion due in back payments that could create a wave …

February 26, 2021

Features Finance Insight Loans Midwest Net Lease Northeast Southeast Texas Western

Envoy Discusses Construction, Bridge Loan Lending, Future of Net Lease

by Sarah Daniels February 24, 2021

Ralph Cram, president and manager of Envoy Net Lease Partners LLC, is responsible for providing strategy, marketing and investment advice on all aspects of net lease property investments. He believes 2021 will be a banner year for net lease, and that Envoy is particularly well suited when it comes to providing “one-stop shopping” for developers. Finance Insight: How is Envoy is different from a “normal” commercial real estate finance provider? Cram: Envoy’s focus is construction and bridge loan lending on single-tenant, net-lease properties in most commercial real estate segments such as retail, restaurant, medical and industrial properties. What differentiates us from most lenders is that first and foremost, Envoy can lend up to 100 percent of the total project costs. A developer receives all the project’s capital from one source without having to take on outside investors and time-consuming joint-venture (JV) and related agreements. Envoy’s “one-stop shopping” allows developers to concentrate on what they do best and provides the entirety of financing and other capital considerations for a given project. Second, the only thing we do is lend on net-lease properties, so we are experts. We don’t do an apartment loan one day and a PPP loan the next. We don’t leave, enter and then re-exit the net-lease market and …

February 24, 2021

Content Partner Features Midwest Northeast Southeast Texas Western

Valbridge: Automation Can Assist Valuation Process, But Not Replace It

by Sarah Daniels February 23, 2021

The pandemic has forced the appraisal business into a surreal experience: many valuation professionals had their physical connections to the market severed or diminished. The question became: how best to assign value to the properties that appraisers are tasked with assessing especially while the demand for valuation has grown. Where does the rise of automatic valuation systems (AVSs) fit in with the valuation process? Karl Finkelstein, vice president of Business Development and senior managing director for Valbridge Property Advisors, spoke recently to REBusinessOnline. He explains, “The appraisal business is still all about reporting on what we see in the marketplace. That hasn’t changed. What has changed is our physical connection to the market — talking with market participants and attempting to read the tea leaves.” As for many companies, the past few months have been a time of reassessment and reengagement with the technology and tools at hand. “We’ve had to rethink how we do inspections; we’ve had to rethink how we physically interact. Technology has given us a big hand with that, and it has changed some of the some of the ways we do business and enhanced others,” says Finkelstein. A Hands-On Business, Socially Distanced Physical inspections remain …

February 23, 2021

Features Office

Cushman & Wakefield: U.S. Office Market Outlook Begins to Show Reasons for Optimism

by Kristin Harlow February 18, 2021

CHICAGO — The road ahead will be bumpy for the U.S. office sector, but there is light at the end of the tunnel, says Cushman & Wakefield. The Chicago-based commercial real estate brokerage recently published Part III of a series of snapshots entitled “U.S. Office Sector: the Road Ahead in 2021,” which are focused on the economy and office trends. What follows is a synopsis of those predictions in the third segment. The path of the virus is central to the office sector recovery, asserts Cushman & Wakefield. As of early February, roughly 11 percent of the U.S. adult population has received at least one dose of the vaccine. Additionally, the seven-day moving average of vaccines being administered was trending up and the number of vaccinations was outpacing the number of new confirmed daily infections. Most baseline forecasts assume the vaccines will be widely distributed by mid-2021 in most advanced countries and in some emerging markets. In the U.S., it is currently assumed that full herd immunity will be reached by September or October of this year. Undoubtedly, the pandemic directly impacted office leasing fundamentals in 2020. In the U.S., there was 104 million square feet of negative absorption last …

February 18, 2021

Features Heartland Feature Archive

General Contractors Look Forward to Possible ‘Tsunami of Projects’ as Backlog Dissipates

by Kristin Harlow February 16, 2021

With light emerging at the end of the COVID-19 tunnel thanks to the rollout of a vaccine, general contractors are confident of an uptick in business activity in 2021 following a year in which many projects were put on hold. But that optimism is clouded slightly by the high cost of materials, particularly lumber. Michael Sullivan Jr., CEO and founder of Des Plaines, Illinois-based Peak Construction Corp., says his company is prepared to absorb more of the rising costs this year than it did in 2020. Last year, many developers that Peak worked with were willing to take on the increased costs simply because they wanted to continue operating during the pandemic. “It appears that 2021 will change from that pattern, and we expect to see significant increased costs for many materials, subcontractors, insurance premiums and costs attributable to modified operating practices in the field,” says Sullivan. These cost escalations will erode profit margins despite increased revenues, he predicts. Adam Miller, president of Summit Design + Build LLC in Chicago, says lumber prices are nearly double what they were in September 2019. The reason is threefold: fires in the lumber source forests of the Northwest U.S.; disruptions and delays at …

February 16, 2021

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