Features

Experiential Retail Adjusts for a Post-COVID Comeback

by Katie Sloan March 18, 2021

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 …

March 18, 2021

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

by Katie Sloan March 16, 2021

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 …

March 16, 2021

District of Columbia Features Southeast Southeast Feature Archive

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

by John Nelson March 11, 2021

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 …

March 11, 2021

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

by Sarah Daniels March 9, 2021

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. …

March 9, 2021

Affordable Housing Features Multifamily

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

by Jeff Shaw March 8, 2021

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 …

March 8, 2021

Matt Pipitone Fannie Freddie Seniors Housing

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

by Sarah Daniels March 4, 2021

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 …

March 4, 2021

Features Hospitality Multifamily

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

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