Features

NAIOP Sentiment Index Drops Below 50 for the First Time Since Its Inception

by Katie Sloan May 15, 2020

The NAIOP CRE Sentiment Index — based on a survey of commercial real estate developers, owners, investors and service providers — has come in at 45 for the month of March, dropping from 57 in September 2019 to a number below 50 for the first time since its inception in 2016. The NAIOP Sentiment Survey is conducted semi-annually, in March and September. The survey is sent to roughly 10,500 NAIOP members in the U.S. who are developers, building owners, building managers, brokers, analysts, consultants, lenders and investors in the office, industrial, retail and multifamily sectors. If every participant in the survey selected the most optimistic answer to every question, the index would be 100. Conversely, if all of the participants chose the most pessimistic response to every question, the index would be 0. The survey was conducted against the backdrop of escalating concerns regarding the coronavirus (COVID-19) pandemic in mid-March. While a score below 50 typically indicates unfavorable conditions for commercial real estate over the next 12 months, the association believes that the current ranking of 45 is better understood as a commentary on present-day sentiment in the industry rather than a reliable predictor for future market conditions. Of specific …

May 15, 2020

Outlook is Bright for Student Housing in Post-COVID-19 World, Says Developer

by Katie Sloan May 13, 2020

The student housing industry has been uniquely affected by the coronavirus (COVID-19) pandemic. The niche asset class has been proclaimed “recession-proof” since its inception, and COVID-19 has been the ultimate test. One after another, universities across the country shut down, transitioned to online classes and sent their students home. What we have found during this time is that college students do not go home just because class is cancelled. Across the nation, students are still living in their off-campus apartments and rent is still being collected. Additionally, students who were turned away from traditional university-owned residence halls are now seeking off-campus apartments. With today’s students valuing privacy, distance and cleanliness more than ever, we are seeing students who typically live in residence halls transition to off-campus apartments where they can have a private bedroom and bathroom. What does this mean? Student housing is truly recession-resilient. When every university in the country cancelled classes, privately owned student housing not only remained stable but it expanded its clientele. The unknowns regarding where the economy is headed in the immediate future will likely give a lot of investors pause, but I personally remain optimistic about the opportunities that will come out of this pandemic. A few …

May 13, 2020

Features Georgia Restaurant Retail Southeast Southeast Feature Archive Video Webinar

Retail Reboot Webinar: Wave of Second-Generation Restaurant Space to Hit Atlanta Market

by John Nelson May 11, 2020

As many as 150,000 to 200,000 restaurants nationwide may never fully reopen again after the COVID-19 pandemic subsides, according to estimates from the National Restaurant Association. This represents 15 to 20 percent of all U.S. restaurants. Though the metro Atlanta area’s restaurants have been allowed to reopen their dining rooms for a full two weeks following Georgia Gov. Brian Kemp’s directives in late April, early indications are that a large swath of operators are choosing to keep them closed and focus on takeout, delivery and catering. Others are making the hard choice to close their eateries permanently. As a result, there will be a wave of second-generation restaurant space that will need to be absorbed before new restaurants are built en masse in metro Atlanta, said Tom McCarty of barbecue restaurant chain Jim ’N Nick’s during a webinar hosted by France Media’s Shopping Center Business and sponsored by Retail Specialists. “From our standpoint, our developments are on hold for now,” said McCarty about the chain, which opened a location in metro Atlanta’s East Cobb district late last year. “The focus of the company is on getting our existing restaurants back up and running profitably. Once that happens, then we’ll start …

May 11, 2020

Features Retail Texas Texas & Oklahoma Feature Archive

Innovative, Tech-Savvy Retailers Better Equipped to Survive, says Texas Panel

by Taylor Williams May 8, 2020

Brick-and-mortar retailers in Texas that have found creative ways to develop new income streams and to leverage technology to directly engage their customer bases have proven most resilient in battling the financial headwinds the sector faces as a result of the COVID-19 outbreak. A panel of retail real estate professionals in Dallas and Austin spoke to this trend and others during the Texas Retail Reboot webinar, which was held on Thursday, May 7. Shopping Center Business and Texas Real Estate Business, two magazines published by Atlanta-based France Media Inc., hosted the event, which drew more than 600 registrants. The panelists’ insights, which touched on both past successes and future opportunities, were delivered roughly a week after Texas Gov. Greg Abbott approved a Phase I plan to reopen retail and restaurant establishments at reduced occupancies and with heightened sanitation guidelines. The webinar was also held less than 24 hours before the governor allowed service retailers like hair and nail salons to reopen. Tanya Hart Little, CEO of Dallas-based Hart Advisors Group, moderated the discussion. Hart Advisors Group also sponsored the event. Jennifer Pierson, co-owner of Dallas-based investment brokerage firm STRIVE, was the first panelist to identify this commonality among retailers that …

May 8, 2020

Features Leasing Activity Loans

LightBox Survey: Longevity of Pandemic, Unemployment Are Top Concerns for CRE Professionals

by Sarah Daniels May 7, 2020

It’s not the outright fear or negativity surrounding the COVID-19 outbreak that most concerns those in the commercial real estate (CRE) industry. Rather, it’s the uncertainty. That’s according to a market confidence survey polling those in the broker, appraisal, lending, investing and environmental consulting/engineering sectors on how they have been impacted by COVID-19 and the resulting recession. LightBox, a real estate technology firm, conducted the poll from mid-April through the end of the month. The survey indicates that the top three concerns for CRE professionals are the unknown duration of the pandemic, rising unemployment and the difficulty of accurately forecasting business activity. “There is no shortage of uncertainty about when sellers will be comfortable putting properties back on the selling block, when lenders will be less skittish about originations or when the impact of the pandemic on property values is clearer,” says Dianne Crocker, principal analyst with LightBox. “Ultimately, the effects on the commercial real estate market will vary by geography and asset class and will depend primarily on how quickly the health crisis is controlled and the duration of the economic shutdown.” Lenders, consultants, appraisers and others in the field fear the consequences of instability on their businesses long …

May 7, 2020

Miami Red Capital Rent and Occupancy RED Capital

Content Partner Features Florida Lument Multifamily RED Capital Group Southeast

Cresting Wave of Job Losses Upends Miami Multifamily Sector

by Sarah Daniels May 5, 2020

How will the COVID-19 fallout impact the Miami multifamily market? Although many investors are approaching markets known for leisure travel and cruise industries with caution these days, RED Mortgage Capital research posted last week indicates Fort Lauderdale/Broward County may offer a more attractive risk and reward profile than is commonly understood in the intermediate term, even under severe recessionary stress. Can the same be said of Miami as many of the same arguments apply? Let us stipulate that coronavirus has struck Magic City a particularly sharp blow. Miami relies on international tourism to a larger degree than most other domestic travel destinations and has experienced greater tourism revenue and job losses as a result. Travel industry consultants STR analyzed the top 25 tourist destinations in America and noted that Miami hotels recorded the largest decline in average daily hotel room rates in April (-56.8 percent from 2019), while the metro area’s hotel occupancy plunged to 20 percent from 95 percent in 2019. Employment data are available only through March at this writing, but even at this early stage, job losses were severe. The Miami-Miami Beach metropolitan division employed population fell 86,000 in March, a one-month decline of 6.5 percent. Job …

May 5, 2020

Features

M&M Panel: Aggressive Government Response to COVID-19, Strong Fundamentals Will Limit Severity of Canada’s Downturn

by Taylor Williams April 30, 2020

TORONTO — Investment demand for commercial real estate assets in Canada will be adversely impacted by the outbreak of COVID-19, but the market’s strong real estate fundamentals heading into the crisis and extensive forms of government aid should work in tandem to offset the damage and fuel a strong recovery. Such was the consensus of a panel of investment sales brokers and executives from Marcus & Millichap’s various Canadian offices, who convened on April 21 for a teleconference to discuss the state of the market. Marcus & Millichap, based in California, operates six offices with more than 60 combined real estate professionals in Canada. Much like the United States, the public health crisis that is COVID-19 has caused innumerable closings of nonessential retailers, restaurants and hotels in Canada, as well as reduced office and industrial activity. As of April 29, there were 51,150 confirmed cases of COVID-19 in Canada and 2,983 deaths, according to Johns Hopkins University. Meanwhile, its citizens remain under stay-at-home orders. Consequently, commercial investors across Canada are seeing their properties experience dips in occupancy rates, reduced cash flows from tenants whose businesses are suffering, and consequently less demand for assets that had been listed for sale prior …

April 30, 2020

Features Student Housing

Student Housing CEOs Expect Lower International Enrollment, Changes to On-Campus Living for Fall Semester

by Jeff Shaw April 29, 2020

With summer break fast approaching, many universities are beginning to turn their attention to the upcoming academic year. The question lingering on the minds of many is: What will fall semester look like during a pandemic? Will international students return? Will enrollment numbers fall? And will campuses even host in-person classes? The answer to each of these questions begets an impact on student housing, both on and off campus. On Friday, April 17, Student Housing Business (SHB) released a complimentary webinar sponsored by Pavlov Media, during which four CEOs from some of the top companies in the student housing sector provided their perspective on the impact of COVID-19 on the industry. Rich Kelley, publisher of SHB, led the discussion with speakers including Wes Rogers, president and CEO of Landmark Properties; Rob Bronstein, president and founder of The Scion Group; Peter Stelian, CEO of Blue Vista Companies; and Christopher Merrill, co-founder and CEO of Harrison Street. Click here to listen to the full webinar: The CEO Perspective: COVID-19 and the Impact on Student Housing What will fall semester look like? Over the past week, a number of universities announced their plans for the fall semester. These announcements are expected to grow steadily in …

April 29, 2020

Content Partner Features Florida Lument Multifamily RED Capital Group Southeast

Fort Lauderdale Multifamily Sector Offers Investors Shelter from the Viral Storm

by Sarah Daniels April 27, 2020

Many multifamily real estate investors have moved to the sidelines until price transparency returns and the trajectory of property performance becomes clearer. It is a prudent strategy. Indeed, this period of forced inactivity is, perhaps, better used to reflect on the future and consider which U.S. apartment markets will offer the most attractive opportunities when the moment arrives to test the waters again. Conventional wisdom holds that markets with significant reliance on leisure travel employment will be hardest hit by the pandemic, particularly those with outsized exposure to the cruise industry. It’s hard to refute the logic. But investors who interpret it too literally may miss potentially attractive options. Take Fort Lauderdale, for example. The Broward County labor market has one of the highest exposures in the country to the leisure, hospitality and cruise sectors. More than 3.9 million cruise passengers embarked from the port last year, generating direct employment for about 15,000 residents and indirect employment for tens of thousands more in the lodging, dining and entertainment, air transportation and retail sectors. With the cruise industry taking on water surely investors would be well advised to steer clear of the Gold Coast? Perhaps not. In fact, the statistical impact …

April 27, 2020

Content Partner Development Features Industrial Loans Midwest Multifamily Northeast Office Retail Southeast Texas Walker & Dunlop Western

Walker & Dunlop: Rent, Lenders, Tech in the Midst of Coronavirus

by Sarah Daniels April 24, 2020

In recent weeks, the ability of commercial real estate owners to access debt and equity has come into question as the novel coronavirus wreaks havoc on the economy. While some deals in the pipeline are still getting done, the debt markets took a pause as the pandemic took hold. Debt markets were waiting for clarity on how various sectors would react, according to Mark Strauss, managing director of capital markets, and Rob Quarton, director of capital markets, with Walker & Dunlop’s Irvine, Calif., office. The two recently spoke with REBusinessOnline via Zoom about the robustness of certain asset types, market stability, debt pricing and adoption of tech-heavy creativity in the wake of COVID-19 and its effects on commercial real estate nationwide. Commercial Real Estate Debt & Coronavirus Strauss and Quarton primarily work with institutional capital sources that provide capitalization for commercial real estate developers and owners. As such, they have a broad view of all debt markets and their willingness to fund. Debt funds are one of the most affected areas of the financial markets. “The way that debt funds finance their position behind the scenes — either using collateralized loan obligations (CLOs), bank warehouse lines or repo facilities — …

April 24, 2020

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