Features

Supply, Demand of Affordable Housing in Texas Should Grow in Coming Months, Says Exclusive Webinar Panel

by Taylor Williams December 17, 2020

Strong job and population growth over the last decade have steadily elevated demand for affordable housing throughout Texas, and the incoming Biden administration is likely to enact policies that will help developers expand the supply needed to meet that demand, according to a panel of industry experts. The combination of no state income tax and a pro-business climate has driven scads of major companies to relocate to Texas, in many cases from California. At least before the COVID-19 pandemic, the arrival of these high-paying jobs — and the housing to support them — tended to fuel demand for retail, restaurant and hospitality development. It’s within the operations of these properties that many renters who qualify for affordable or workforce housing make their living. Immigrants from Mexico and Central America further add to demand in Texas. But from an economic standpoint, development of affordable housing is rarely feasible without some sort of aid from the state or federal government (or both). In terms of the latter, some professionals in Texas believe that the incoming Biden administration intends to prioritize affordable housing growth through a variety of mechanisms. Announcing: Texas Affordable Housing Business magazine. Click here for complimentary subscription. A panel of …

December 17, 2020

Features

A Vision for A Greener, More Resilient Urban Core

by Taylor Williams December 15, 2020

By John Goldwyn, senior vice president, director of planning and landscape, WATG Months into the COVID-19 pandemic, the real estate industry is one of many trying to navigate the “next normal,” especially in cities impacted by extended office closures, shuttered businesses and residential shifts to more spacious suburbs. Space — especially green, outdoor space — comes at a premium in these cities. Yet science tells us that being outdoors is the safest way to gather in this era of COVID-19. Access to nature is also a proven antidote to the anxiety we feel after months of quarantine. And in many cases, operating outdoors is the only way a business can stay afloat today. As such, cities like New York are faced with pressure to transform so that businesses and residents can once again thrive. As a multinational design firm, WATG has proposed Green Block Flatiron — a system in which New York City residents can enjoy both a green and urban lifestyle. Residents no longer need to sacrifice one for the other, nor flee for greener landscapes in the suburbs. This concept creates a system that can help us emerge from COVID-19 with a stronger foundation for the future. …

December 15, 2020

Conference Coverage Features Retail

Net-Lease Investors Prioritize Assets Occupied by Essential Retailers, Says InterFace Panel

by Taylor Williams December 9, 2020

By Taylor Williams Retail tenants with strong credit, sales and branding have long been the darlings of the net-lease investment market via their ability to unlock value in their underlying real estate. But as the COVID-19 pandemic has battered brick-and-mortar retailers in a plethora of categories, net-lease investors are placing added emphasis on the products and services that tenants offer when targeting new acquisitions. After nine months of the public health crisis, investors have a better sense of which tenants are flourishing in the net-lease space and which ones are languishing. This more targeted, stable approach to investing is joining forces with the unleashing of pent-up demand from the spring and summer months, when capital sources largely took to the sidelines. According to a third-quarter report from Avison Young, deal volume in the single-tenant net-lease (STNL) retail space rose by 13.8 percent from the second to third quarters of this year, though the period’s 329 trades fell well short of the first-quarter mark of 416 deals. As a result of elevated investment demand, cap rates in the market are starting to compress — again with a pronounced difference among retail assets based on their tenancy profiles. Avison Young’s report found …

December 9, 2020

Content Partner Features Industrial Lee & Associates Loans Office

Capital Markets Face Slowdown and Lender Scarcity

by Sarah Daniels December 8, 2020

The ability to find debt and equity financing for acquisitions and new development has been deeply affected by the coronavirus. Heading into 2020, there was plenty of inexpensive capital available to real estate investors and developers. The once wide field of potential lenders has shrunk significantly over the past nine months. And as for equity availability, it will be important in the coming months to be patient and diligent. REBusinessOnline recently spoke with Gary Sopko, senior vice president – structured finance/investment sales of Lee & Associates and principal at Baden Advisors (an affiliate of Lee & Associates) via video conference about his company’s approach to investment sales, debt financing and equity placement for commercial real estate clients in the midst of an unprecedented year. Sopko interprets what the lower loan volume across the board means for the commercial real estate industry, trends he’s seeing and his role in educating borrowers/clients on how to navigate this challenging time. Changing Lender Pools At the start of the pandemic, a variety of lenders were still ready, willing and able to lend; however, as the pandemic continued and shutdowns spread, the lender pool shrunk. Many private debt funds had to suspend lending for a …

December 8, 2020

Features Retail

More Private Buyers Will Enter Retail Real Estate Sector in 2021, Says Marcus & Millichap Retail Executive Daniel Taub

by John Nelson December 3, 2020

Daniel Taub is a well-known name in the retail real estate world. He spent most of his career with DLC Management, one of the nation’s largest open-air center owners, heading up leasing and eventually becoming president and chief operating officer of the company. In October, Taub joined Marcus & Millichap as senior vice president and national director of the firm’s retail division. In his new role, Taub will be helping the firm’s retail brokers with deals, as well as advising clients. He recently spoke to Shopping Center Business editor Randall Shearin about his new role, and about the challenges ahead for the retail sector. Shopping Center Business: Why is now the right time for you to take on the challenge of this role at Marcus & Millichap? Daniel Taub: Timing. As has been the case during other cyclical moments that have impacted the commercial real estate sector, while the pandemic is horrific and unfortunate for everyone, firms that are focused and well positioned to be proactive, go on the offensive and identify opportunities across the platform where it can build on its successes, including in the retail space. The headlines in retail were challenging before the pandemic; there was obviously …

December 3, 2020

Features Texas & Oklahoma Feature Archive

Property Tax Roundtable: Appraisers Adjust to the Pandemic With Procedural Changes

by John Nelson December 1, 2020

In early 2020, the rapidly unfolding pandemic threatened to derail Texas’ property tax assessment and appeal process. With stay-at-home orders being issued at the same time that appraisal districts were sending out initial values for 2020, uncertainty cast doubt on how the process would proceed, or even whether it would proceed at all. Taxing entities were concerned with revenue impacts, and taxpayers were concerned about their ability to pay. Texas launches the property tax cycle every Jan. 1 with a revaluation of property. In most jurisdictions, taxpayers expect to receive notices of appraised value sometime in April, with the deadline for protesting the appraised value typically falling in May. Under normal circumstances, these dates begin the property tax protest cycle for the year. On March 31, 2020, however, the “typical year” quickly became anything but. Appraisal districts faced the nearly impossible task of navigating an unprecedented scenario with limited time and resources. Their success in maintaining a functioning appeals process is a testament to the professionalism of the state’s chief appraisers and personnel and to the fundamental strength of Texas’ property tax system. We queried chief appraisers and commercial supervisors from several appraisal districts about their experiences from the past …

December 1, 2020

Content Partner Features Loans Walker & Dunlop

The Sunset of LIBOR and the Rise of SOFR: What You Need to Know

by Sarah Daniels November 30, 2020

For years, interbank offered rates, including USD LIBOR (London Interbank Offered Rate), have been the most-referenced benchmark interest rates in the world. However, global indexing is moving to risk-free rates, including the Secured Overnight Financing Rate (SOFR) in the United States, with pivotal milestones taking place between now and the end of 2021. Here’s what this transition means for the multifamily sector, dates to watch for, and steps to take now. View higher resolution version of timeline above here. What is SOFR? SOFR is based on overnight repurchase agreements, with cash borrowers posting U.S. treasuries as collateral with an agreement to buy them back at a specified date. The daily SOFR can be subject to spikes, so agency lenders will use a 30-day compounded average to smooth out volatility based on recommendations from the Alternative Reference Rates Committee (ARRC). SOFR has no credit component, so the market will likely accommodate by charging some additional spread for new SOFR-based products. While enough futures and swaps activity has transpired since 2018 to develop the shorter part of a term curve, the longer part of the curve will be addressed by fourth quarter of 2020, particularly as the CME and LCH clearing houses convert …

November 30, 2020

Features Multifamily

More Multifamily Housing Needed to Combat Affordability Crisis, Bernanke Tells Marcus & Millichap CEO

by John Nelson November 24, 2020

The affordability of housing in the United States is currently under extreme duress as a result of the COVID-19 pandemic and subsequent economic recession. Since March, approximately 53 percent of all households earning $25,000 to $49,999 reported lost income, according to a recent report by the Joint Center for Housing Studies of Harvard University entitled “The State of the Nation’s Housing 2020.” One net effect of less discretionary income is that monthly rent is becoming a heavier burden for a large number of Americans, especially in gateway markets such as San Francisco and New York City where apartment rents have been unattainable for a large swath of the working class for years. For the lowest earning renters, affordability of rent is even more acute as a result of the pandemic. According to the Harvard report, one in five renters earning less than $25,000 annually was behind on rent payments. Dr. Ben Bernanke, a veteran economist and former chair of the Federal Reserve, said that the solution to the U.S. affordable housing situation may be overly simple: add more supply. “You learn on the first day of economics that if you increase the supply of something, the price is going to …

November 24, 2020

Conference Coverage Features Retail Southeast Southeast Feature Archive

Lenders Bearish on Retail Sector Except for ‘Prime’ Assets, Says Expert Panel

by Alex Tostado November 20, 2020

Since the onset of the COVID-19 pandemic, retail and restaurant space has been severely impacted by government-mandated shutdowns. While some stay-at-home orders have been lifted, the sector has struggled to return to its pre-pandemic norms. As a result, lenders have shied away from retail, whether it be construction, refinancing or acquisition loans, according to an expert panel assembled by France Media, Inc. Retail has “lost a lot of favor” with lenders, said Pierce Mayson, managing principal of SRS Real Estate Partners, during a webinar panel titled “Southeast Retail Investment Outlook: Will Retail Investment Activity Bounce Back in 2021?” Southeast Real Estate Business and Shopping Center Business jointly hosted the webinar on Monday, Nov. 16. “There is still some money out there for retail, but it’s few and far between,” said Mayson. Joining Mayson on the panel were Fred Victor, vice president of capital markets and investment sales at Transwestern; Greg Matus, senior vice president of investment sales at Franklin Street; Jeff Enck, associate director of capital investments at Stan Johnson Co.; and moderator Craig Thompson, partner at accounting firm Carr Riggs & Ingram. One telltale sign that banks are bearish on the retail real estate sector is the fact that …

November 20, 2020

Content Partner Heartland Feature Archive Lument Midwest Missouri Multifamily Ohio RED Capital Group Wisconsin

Cleveland, Milwaukee & St. Louis Multifamily Forecasts Indicate Case for Caution

by Sarah Daniels November 19, 2020

In earlier research, we found that investors may find advantageous risk and reward tradeoffs during the pandemic in often overlooked Midwest secondary markets. For the most part, average rent and occupancy metrics in these markets continued to rise throughout the summer, recession notwithstanding. Together, their inviting cap rates, rising NOI and low historic income volatility form a fairly compelling investment predicate. We also found that positive performance attributes were not limited to the region’s most robust economies. Even metropolitan markets that have experienced slow demographic growth — like Cincinnati and Detroit — posted surprisingly good revenue growth. Can the same logic be extended to metropolitan areas experiencing actual demographic decline? A review of recent trends in three “high-yield” markets with negative population growth – Cleveland, Milwaukee and St. Louis – shed some light on the question. View higher resolution version of chart above here. With respect to occupancy, the answer is yes. In fact, property level data published by Yardi suggest that market conditions in each of these metro areas has been constructive since February. Between February and October, average occupancy among stabilized same-store property samples increased by 14 basis points in Cleveland and 10 bps in St. Louis, in …

November 19, 2020

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