Features

Colleges, Universities Look More to Public-Private Partnerships for Student Housing Projects Post-Pandemic

by Katie Sloan February 22, 2022

The pandemic isn’t entirely behind us yet, but many colleges and universities see the writing on the wall when it comes to funding future on-campus housing projects. Tighter budgets, more privacy, possible future closures, and nearly two years of delayed, deferred or canceled projects have driven a wedge between what establishments need to offer their students to remain competitive and what they have to work with. Enter public-private partnerships (P3). These arrangements between private investment firms and public universities have been bridging the funding gap for nearly 20 years. In a post-COVID world, however, their presence isn’t just appreciated, it’s vital in many instances. “COVID has shown how important P3 relationships are for institutions facing budget cuts and higher costs,” says Michael Leonczyk, director at Chicago-based Harrison Street. “There is a growing acceptance of P3s as a critical vehicle to allow higher education institutions to stay on the cutting edge when it comes to retaining and attracting students and ensuring they have access to resources that facilitate their academic and social lives. This includes housing, dining, parking, energy, water and athletics.” In 2003, there were three higher education P3 transactions, which totaled $100 million. By 2016, this number had swelled …

February 22, 2022

District of Columbia Features Southeast Southeast Feature Archive

The Tax Appeal Life Cycle in D.C. Goes Through Three Levels of Review

by John Nelson February 17, 2022

In the District of Columbia, a prudent taxpayer must observe important steps and deadlines to appeal a real property tax assessment. Strict code provisions, government policies and procedures govern the appeal process, so understanding the typical life cycle of an appeal provides a head start in making sure a property is fairly assessed. Here is a look at what to expect as a case advances: Assessment and Notification Assessors reassess all real property in the District each year using a Jan. 1 valuation date that precedes the start of that tax year. For example, Tax Year 2023 runs from Oct. 1, 2022 through Sept. 30, 2023. Thus, corresponding assessed values are as of Jan. 1, 2022. The District typically will mail assessment values and update the MyTaxDC.gov website on or around March 1 each year, sending its estimate of market value to the owners of more than 205,500 parcels. This will be the taxpayer’s first glimpse of the valuation and potential tax liability for the following tax year. These assessed values are released without supporting documentation, however. To determine how an assessor derived the value, the taxpayer or a duly authorized agent must contact the Office of Tax and Revenue …

February 17, 2022

Acquisitions Features Multifamily Seniors Housing

Seniors Housing Buyer/Seller Landscape Shifts

by Jeff Shaw February 15, 2022

COVID-19 has changed many investors’ approaches to the seniors housing sector. The pandemic caused a major shift in who’s buying and who’s selling. Some of the biggest buyers in 2019 were the biggest sellers in 2021. For example, institutional investors went from buying more than $2 billion in 2019 to selling more than $3 billion through the first three quarters of 2021. That’s according to Real Capital Analytics, a New York City-based data firm. The numbers are based on publicly announced deals over $2.5 million. “There still is an element of fear and uncertainty,” says Jim Costello, senior vice president with Real Capital Analytics. “We saw early in the pandemic that some of the management issues resulted in more fatalities. It’s not the problem now that it was then, but that comes with higher costs. More spending has to be done to mitigate the risks involved. That changes the investment opportunities.” These changes have led to a growing bid-ask spread in the marketplace. Buyers aren’t willing to spend as much, knowing that expenses are higher now, but sellers aren’t necessarily willing to reduce prices, says Costello. At least in 2020, this resulted in a massive dip in overall deal volume, …

February 15, 2022

Affordable Housing Features Multifamily

Will Federal Budget Reconciliation Ease Nation’s Housing Affordability Crisis?

by Jeff Shaw February 11, 2022

By Robert Walton, Trimont Real Estate Advisors U.S. lawmakers may be on the cusp of adopting the most far-reaching affordable housing legislation the nation has seen in decades. Despite ongoing discussion of a House-approved spending plan’s overall price tag, congressional leaders hope to forge agreement on FY 2022 appropriations as early as Feb. 18, the end date of a continuing resolution funding the government. Expanded tax credits under a budget agreement could pave the way to creating thousands of additional rental units for households with low and median incomes, helping to address a housing supply gap that has dashed hopes and opportunities for a large and growing segment of the population. Affordable housing initiatives expected in the 2022 federal budget range from an expansion of low-income housing tax credit (LIHTC) allocations to states, to the creation of several new tax credits to incentivize development and rehabilitation of affordable housing in a wider range of product types and income levels. Those could include a middle-income housing tax credit to promote affordable rentals for families with incomes closer to their local median but who struggle to afford median rents. A neighborhood homes tax credit would target development and rehabilitation of affordable single-family …

February 11, 2022

Hilary Provinse Multifamily Financing quote

Features Finance Insight Loans Midwest Multifamily Northeast Southeast Texas Western

Multifamily Financing Outlook Positive Despite Volatility, Interest Rates

by Sarah Daniels February 10, 2022

2021 was an exciting year in the multifamily financing market, and for Berkadia mortgage banking — we originated over $40 billion in volume for our clients across our various lender programs, an increase of 50 percent over our 2020 volumes. Every lender in the market demonstrated a strong appetite for originating loans and increased their holdings of mortgages, which was crucial given that the Federal Housing Finance Agency (FHFA) lowered the caps for Fannie Mae and Freddie Mac to $70 billion each. While the final numbers haven’t been released yet, the Mortgage Bankers Association (MBA) projected the market would originate $578 billion of loans backed by commercial real estate in 2021, a 31 percent increase from 2020 ($442 billion) and just below 2019’s record volume of $601 billion. The fundamentals of the multifamily sector drove unbelievable rent growth, which in turn drove increased investor interest. In 2021, we advised on 762 investment sales transactions, totaling close to $27 billion in volume, a truly record-breaking year for us! This tremendous investor appetite brought about an enhanced need for financing, and often more creative financing. With the government-sponsored enterprises (GSEs) more limited, life companies and commercial banks answered the call, but the …

February 10, 2022

Features Self-Storage

Office, Retail Owners Struggling With Vacancy Issues Should Consider Self-Storage

by Taylor Williams February 9, 2022

By Joseph Woodbury, co-founder, CEO, Neighbor Over the past two years, millions of Americans have drastically altered their work styles and consumption behaviors, which has resulted in commercial landlords, property owners and real estate portfolio managers adjusting their operating strategies. Many businesses of many sizes are capitalizing on hybrid or remote work models by reducing their office footprints and reevaluating real estate needs moving forward. During the first quarter of 2021, U.S. office vacancy exceeded the amount of space that was leased by 34.8 million square feet, according to analysis from The Wall Street Journal. The residential side of the real estate industry has demonstrated that people’s relationship with space is changing. Whether they can’t find a home large enough to fit all of their belongings or they need room for a home office, people are running out of space. Likewise, retailers are continuing to respond to market shifts by growing their omnichannel sales platforms. While this typically involves investing more heavily in digital marketing and sales programs, some retailers that started exclusively as e-commerce brands, like Wayfair and Amazon, are also opening brick-and-mortar stores. As demand for commercial and office space is decreasing and the consumer desire for “flexible space” is …

February 9, 2022

Gregg Gerken TD Bank Affordable Housing quote

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

Growth of Affordable Housing Delayed by Approval Process Slowdowns, Supply Chain

by Sarah Daniels February 8, 2022

The need for affordable housing has grown, but factors like municipal slowdowns and delays in financing have helped contribute to a lack of supply. Gregg Gerken, head of U.S. Commercial Real Estate with TD Bank, spoke to REBusiness about why the need for affordable housing is at a critical juncture and why this need is so difficult to fill. Finance Insight: What is the state of affordable housing right now? Gerken: There is a supply/demand imbalance. There continues to be a desperate need for more investment in affordable housing, not less. The arrival of COVID introduced more challenges for affordable housing, but the struggle to find high-quality affordable rental housing existed well before the pandemic. Rent prices affect millions of Americans, especially those with low incomes, and rents have only increased. Furthermore, the pandemic has caused an interruption of the supply chain and much-needed new projects have been delayed. Finance Insight: Can you outline a few big-picture national trends that are most impacting affordable housing right now? Gerken: As I mentioned, the imbalance of supply and demand is negatively affecting affordable housing. Rising rental rates mean fewer people will be able to qualify for affordable housing. Coming out of COVID …

February 8, 2022

Features Multifamily

Apartment Investment Expected to Thrive Through Inflation

by Jeff Shaw February 7, 2022

Job losses, shortages of qualified labor in the workforce and the imminent impact of rising interest rates are all real-time threats to the economy, with the first rate increase expected in March. Marcus & Millichap hosted a webcast on Jan. 27 titled “2022 Outlook: The Economy — Inflation — Fed Policy — Real Estate” to discuss how upcoming Fed action and inflation might affect the real estate market. The event’s speakers included Marcus & Millichap President and CEO Hessam Nadji; TruAmerica Multifamily President and CEO Robert Hart; ICSC President and CEO Tom McGee; and Henry Paulson, 74th Secretary of the United States Treasury and former chairman and CEO of Goldman Sachs. Without sugarcoating the challenges ahead, Paulson says if history is any predictor, the next year or so is not going to be easy. “I’m not really optimistic about the core economic recovery,” he said. “I’m pleased with how the business community has responded, but here’s where I’m going to get more somber: Inflation is really serious, and I don’t think any of us can find an example in recent economic history where the Fed has been able to contain inflation like this and have a soft landing.” On a …

February 7, 2022

Meghan Czechowski quote Apprise Multifamily Valuation

Content Partner Features Finance Insight Midwest Multifamily Northeast Southeast Texas Walker & Dunlop Western

Web-Based Multifamily Valuation Enhances Speed, Builds Better Predictions

by Sarah Daniels February 3, 2022

The future of multifamily valuation requires flexibility and the use of technology to process data faster and more reliably. Meghan Czechowski, managing director and valuation lead for Apprise by Walker & Dunlop, spoke to Finance Insight about why multifamily valuations in particular are well suited to a web-based machine learning approach, resulting in faster appraisals with increased reliability. Finance Insight: How does the Walker & Dunlop Apprise program differ from traditional residential valuation programs? Czechowski: We’re focused on multifamily with our tech-enabled process. Most appraisal reports on the commercial side (multifamily included, that is, five units and up) are completed using a web-based database, and those databases are typically blank slates. When you’re entering sale comparables, rent comparables or other data, most people are starting from scratch and usually using an analyst to record that comparable information that then feeds into a database. The Apprise team of appraisal experts uses our Apprise application, which is a proprietary web-based system. It uses the property record database; therefore, it is not a blank slate. It has over 2.5 million multifamily records flowing into it from a public record aggregator and various industry resources like REIS, RCA and Yardi, using direct integration and …

February 3, 2022

Features Industrial Loans Multifamily

Exclusive France Media Survey Shows Lenders Are Placing Their Bets on Multifamily, Industrial Sectors

by Taylor Williams February 2, 2022

By Matt Valley An overwhelming percentage of direct lenders and financial intermediaries believe the multifamily and industrial sectors provide the most attractive financing opportunities for the lending community today, according to France Media’s 11th annual reader forecast survey. Conversely, the hotel and office sectors offer the least attractive financing opportunities, say survey participants. More specifically, 83 percent of participants in the email survey conducted between Nov. 19 and Dec. 13 indicate that the multifamily sector provides the most attractive financing opportunities, followed by industrial (75 percent), mixed-use (25 percent), retail (17 percent), hotel (14 percent) and office (7 percent). Multiple answers were permitted for this question. On the flip side, 62 percent of respondents believe that the hotel sector provides the least attractive financing opportunities, followed by office (58 percent), retail (27 percent), multifamily (7 percent), industrial (3 percent) and mixed-use (0 percent). Despite the persistence of the COVID-19 pandemic — which as of early January had claimed the lives of more than 830,000 Americans and has hobbled the hotel, office and retail sectors for nearly two years — the real estate fundamentals of the apartment and industrial sectors have remained rock solid. Fueled by strong tenant demand, the national …

February 2, 2022

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