Features

Origin Investments: Phoenix Tops List of Cities for Investing, Developing Multifamily Properties

by Julia Sanders July 9, 2021

CHICAGO — According to Origin Investments, a Chicago-based private equity real estate firm, the seven multifamily markets in the United States best poised to capitalize on post-pandemic trends are: Phoenix; Atlanta; Charlotte, North Carolina; Austin, Texas; Raleigh, North Carolina; Nashville, Tennessee; and Tampa, Florida. Origin’s analyzed 150 markets to identify the cities with the highest chance of success as pandemic restrictions loosen. Origin has been refining this model for the past three years to inform its investment strategy and acquisitions. All these cities are undergoing economic development that will spur rent growth and attract institutional real estate investment. The following is a breakdown of what industries each state grew in: 1. Phoenix: Phoenix’s economy grew during the pandemic with an increase of jobs in trade, transportation and utility. Arizona State University’s industry-leading cybersecurity, artificial intelligence and analytics programs continue to produce a strong labor pool for tech employers. Intel and Taiwan Semiconductor will break ground soon on facilities that are already drawing related investments. Additionally, robust hiring and affordable housing put Phoenix at the intersection of rent growth and capital demand. 2. Atlanta, Charlotte and Austin (three-way tie for second place): Atlanta is evolving into the tech capital of the …

July 9, 2021

Acquisitions Content Partner Data Centers Development Features Industrial Midwest NAI Northeast Southeast Texas Western

From Hype to Hyperscalers: NAI Global Discusses Trends for Data Centers

by Sarah Daniels July 8, 2021

Data centers have exploded in importance over the last year and a half. Kevin Goeller, principal, NAI KLNB, has over 21 years of experience in the field of data center development, sales and leasing, but says that, lately, exponential change is driving demand in this asset class. He spoke to REBusinessOnline about the booming need and limiting factors for data centers. REBusiness: Tell us about the sudden, increased demand for data centers. What amount of this demand is due to the pandemic driving people to work from home? What amount of the demand is here to stay? Goeller: Prior to the pandemic, we were already in an upward curve because of the added disciplines of 5G and edge data centers contributing to the already competitive growth of the hyperscalers and multitenant data centers. Data center development didn’t have the interest from institutional investors that it does today; these assets were just starting to get these institutions to chase them as a real estate discipline. Fast forward to the pandemic, which added Zoom, Microsoft Teams and other video conferencing and work-from-home needs. These put additional pressure on an already pressurized discipline, an asset class already trying to adapt and grow. REBusiness: …

July 8, 2021

Features Retail

U.S. Retail Sector Recovers Faster Than Expected, Says National League of Cities

by Julia Sanders July 7, 2021

WASHINGTON, D.C. — In 2020, the retail sector suffered due to shutdowns and pandemic restrictions on businesses. Additionally, in April 2020, the U.S. unemployment rate reached 14.7 percent, which is the highest it’s been since the Great Depression, according to CNBC. However, the COVID-19 pandemic influenced the retail industry in a positive way by speeding up some pre-existing retail trends, according to the National League of Cities’ (NLC) new report, The Future of Cities: Re-envisioning Retail. The report shows the key trends in the retail industry and explains how local governmental officials can continue to facilitate positive change in the retail sector. The NLC report found that even though retail industry jobs declined fast last year, now the industry has bounced back more quickly than expected. The Bureau of Labor Statistics reported that the U.S. economy added 850,000 jobs in June, including a 194,000 increase in bar and restaurant jobs and an increase of 67,000 jobs in the retail sector. Many retailers struggled last year due to lockdowns and less income for consumers to spend. The NLC reported that in 2020, more than 12,200 major retail chain stores closed permanently, which equals to 159 million square feet of emptied retail …

July 7, 2021

Content Partner Features Leasing Activity Midwest Multifamily Northeast Southeast Texas Walker & Dunlop Western

Re-Evaluating Valuations: One Year Later

by Sarah Daniels July 6, 2021

Four months into the pandemic, Meghan Czechowski, valuation lead for Apprise by Walker & Dunlop and managing director of the Midwest Region, advised multifamily appraisers not to jump to conclusions about the long-term impacts of the pandemic. “We did advise caution, and it ended up playing exactly the way we thought it would: results differed market by market and asset by asset. That’s how we approach valuation at Apprise to start with, and that approach is how most of the appraisal industry wound up valuing multifamily throughout the pandemic.” Over a year after her initial assessment, Meghan spoke again to REBusinessOnline about what has changed in the world of multifamily appraisals and where those changes are trending. Incorporating Valuation Data from 2020 Early in 2020, there was a general assumption that there would be a discount in multifamily values, but there were no sales to support that assumption until June/July of last year when sales comps appeared on properties in most markets. Now it is essential to ensure that the data Apprise collects reflects the current reality. Once the shutdowns ended, data collection became easier. Czechowski says that real-time information allowed for an even better way to understand, analyze and …

July 6, 2021

Features Retail

Multi-Tenant Shopping Centers Gain Favor With Investors

by Jeff Shaw July 1, 2021

By Kevin Fryman, Executive Vice President, Hanley Investment Group British entrepreneur and adventurer Sir Richard Branson, head of Virgin Group Ltd., said, “Every success story is a tale of constant adaption, revision and change.” Certainly, as retailers grappled with the impact of COVID-19 restrictions, those that could quickly pivot and adapt were the winners. Even Charles Darwin said, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Looking back on the past few years in retail, American consumers were already shifting their purchasing habits. These shifts include experience-spending versus material goods and homes; casual fashion in response to more relaxed dress codes; convenient online ordering, delivery services and drive-thru pick-up for time-starved consumers; as well as the rise of e-commerce, mostly in the form of competition from Amazon.com and Walmart. However, once the lockdowns occurred in response to the pandemic, emerging trends such as online ordering, mobile delivery and omnichannel became permanent. Other 2020 trends that made nearly daily headlines were the number of retailers and restaurant companies that had filed for bankruptcy or were closing stores. Coresight Research reported 8,953 closures last year as the COVID-19 pandemic …

July 1, 2021

Features Multifamily Seniors Housing

Fannie, Freddie Undeterred in Commitment to Seniors Housing Borrowers

by Kristin Harlow June 29, 2021

Many parts of the seniors housing industry slowed as a result of the COVID-19 pandemic, including the lending market. Fannie Mae and Freddie Mac, the two giant government-sponsored enterprises (GSEs), experienced a significant pullback in deal volume in 2020, but remained two of the larger capital sources in the sector. “We are the predominant lender in the space,” says Steve Schmidt, national director of seniors housing loan production with Freddie Mac. “We stayed active at the height of the pandemic. Our underwriting changed, but we were still very active.” Freddie Mac’s annual lending volume in the seniors housing sector fell 45 percent year over year, from $3.8 billion in 2019 to $2.1 billion in 2020. Fannie Mae’s drop was even more dramatic. After growing from $2.3 billion in 2018 to $3.1 billion in 2019, volume dropped 71 percent to below $1 billion in 2020. Fannie Mae declined to be interviewed for this article. “Considering that year-over-year seniors transaction volume was down significantly, the agencies proved to be a tremendous source of liquidity in the market,” says Ryan Stoll, national director of seniors housing and care for Bellwether Enterprise. One reason Freddie Mac stayed active is that the organization’s mission is …

June 29, 2021

Features Heartland Feature Archive Multifamily

Demand for Value-Add Multifamily Acquisitions Outpaces Supply

by Kristin Harlow June 24, 2021

Earlier this year, national real estate investor and operator Waterton closed fundraising activity for a multifamily value-add fund with $1.5 billion in equity commitments from global institutional investors. Waterton launched the fund, known as Waterton Residential Property Venture XIV, in May 2020. The first deployment from the fund was a four-property, 1,824-unit portfolio in metro Atlanta followed by a two-property portfolio in Hawaii and three assets in California. The largest-ever fund from Waterton will continue to target both urban and suburban assets in major U.S. markets. The value-add investment strategy is nothing new for Waterton. The Chicago-based company has taken this approach for the last 25 years. But today there is strong demand among investors to be in the multifamily sector, says Rick Hurd, chief investment officer. As a result of the COVID-19 pandemic, some acquisitions are what Hurd calls “urban distress.” In other words, Waterton is making investments in areas like downtown Los Angeles and San Francisco in anticipation that demand will come back to the urban core over the next couple years. Many renters have migrated to the suburbs during the pandemic to be away from densely populated areas. According to Hurd, there is currently significant demand for …

June 24, 2021

Features Heartland Feature Archive Office

Office Buildings Get Wellness Makeovers

by Kristin Harlow June 22, 2021

The work-from-home model that became the “new normal” for most office workers in 2020 as a result of the COVID-19 pandemic has stymied leasing activity and altered tenant strategies. Many space users have opted for short-term leases in response to the uncertainty triggered by the virus. According to JLL, U.S. office leasing volume in 2020 totaled 125.6 million square feet, down 47 percent from the prior year. Of the lease renewals inked in the fourth quarter, 43 percent were for five years or less. As a result, the average deal term dropped to 6.7 years for leases larger than 20,000 square feet, well below the pre-COVID average of 8.5 years. While office owners remain bullish on the idea that the workforce will return to physical buildings, many questions remain regarding timelines and capacities. In the meantime, landlords are steadfast in their attempt to keep the lines of communication open with tenants and ensure their properties are as safe and welcoming as possible. REBusinessOnline spoke with owners across the Midwest to gauge their pandemic responses and outlook on what’s to come. Health, safety protocols Daniel Cooper, partner with real estate investment manager 90 North Real Estate Partners LLP in Chicago, says …

June 22, 2021

Features Student Housing

On-Campus Housing Prepares for a Better Year

by Katie Sloan June 17, 2021

It was a rough year for everyone, but certain industries absorbed more of the brunt than others in 2020. This would include hospitality, airlines, restaurants and on-campus student housing. There was no clear map for navigating the COVID-19 pandemic, and while campuses and on-campus housing officials tried their best to keep everyone safe and healthy, everyone experienced a turbulent year. Some on-campus housing communities closed for parts of the school year. Others issued lockdowns that required students to stay in their rooms for up to two weeks at a time. Many tried to stay open, only to find that off-campus gatherings spread COVID like wildfire once it reached housing facilities. Now that a return to normalcy is imminent — thanks to vaccines and a promising reduction in the number of COVID deaths and cases — on-campus housing executives are tasked with welcoming students back safely while planning for an uncertain future. “The next six months will be dominated by testing, vaccinations, mitigation requirements, class delivery modalities, planning for fall opening, and occupancy and budget projections,” says Ana Hernandez, assistant vice president of housing and residential education at the University of South Florida in Tampa. “Many campuses are taking a strategic pause …

June 17, 2021

Features Mixed-Use Retail

Mixed-Use at the Core of Mall Reinvention

by Katie Sloan June 15, 2021

When it comes to mall redevelopment, one of the biggest hurdles is changing the business community’s perception that enclosed malls are only for retail use, says Sean Garrett, president of acquisitions and director of community relations for East Peoria, Illinois-based Cullinan Properties Ltd. “There is no reason an insurance office can’t be right next to a retailer and a neighbor of a dentist,” states Garrett. “Downtowns and Main Streets have been developed this way for generations.” Cullinan recently followed this approach when it rebranded its Quincy Mall in Quincy, Illinois, to Quincy Town Center. One of the anchor tenants is now Quincy Medical Group, which backfilled a former Bergner’s department store. For Garrett, merging retail and medical uses today is a “natural fit.” In addition to enclosed space, Quincy Town Center features more than 88,000 square feet of retail and additional uses on 42 acres of land. Cullinan is currently discussing plans for a hotel and the potential for multifamily units. “The opportunities that lie ahead for this mixed-use property, as opposed to a one-note shopping center, are endless and will help ensure its survival,” says Garrett. “Our experience has shown that a diverse tenant mix and uses that complement …

June 15, 2021

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