Features

NMHC Survey: Multifamily Construction Slows Significantly Due to Coronavirus Issues

by Kristin Harlow April 23, 2020

WASHINGTON, D.C. — As a result of the COVID-19 pandemic, 56 percent of apartment developers reported construction delays, according to a survey by the National Multifamily Housing Council (NMHC). Of those reporting delays, 70 percent said they were experiencing delays in construction starts, an 11 percent increase from a NMHC survey conducted the end of March. NMHC’s construction survey gauges the magnitude of the disruption caused by the COVID-19 outbreak on multifamily construction. The survey found that 77 percent of respondents are experiencing issues with permitting; 28 percent suffer a lack of materials that is impacting construction operations; and 44 percent indicate that labor restraints related to the virus outbreak are affecting construction operations. To further illustrate that point, construction starts across all sectors plunged 20 percent by project value year over year in March, according to ConstructConnect, a provider of preconstruction software for general contractors, subcontractors and manufacturers. All types of residential starts were down 9.7 percent. From February to March of this year, housing construction starts plummeted 22 percent, according to the U.S. Census Bureau. Multifamily starts were down 32 percent. As more multifamily projects are delayed, there is potential for the COVID-19 pandemic to further exacerbate the …

April 23, 2020

Features Multifamily Student Housing

Student Housing CEOs Provide Insight on April Rent Collections, Pre-Leasing, Upcoming Academic Year

by Kristin Harlow April 21, 2020

The impact of the coronavirus (COVID-19) is being felt across every facet of the student housing industry. On and off campus, owners and operators have grappled with the cancellation of in-person classes and administrative orders by universities for students to vacate campus entirely in hopes of slowing the spread of the virus. As the situation continues to escalate, many in the industry are wondering what the virus’ impact will be on the months ahead and on the upcoming academic year. On Friday, April 17, Student Housing Business (SHB) released a complimentary webinar sponsored by Pavlov Media, during which four CEOs from top companies in student housing provided their perspective on the impact of COVID-19 on the industry. The discussion was led by Rich Kelley, publisher of SHB, 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. April Rent Collections Despite mounting concerns over the impact the cancellation of in-person classes might have on rent collections, all four CEOs reported at least 90 percent of rent payments collected as of April 16. “Rent collections are currently at …

April 21, 2020

RED Capital Orlando Multifamily Rent and Occupancy Forecast

Content Partner Features Florida Lument Multifamily RED Capital Group Southeast

Orlando Multifamily Could Suffer Multiyear COVID-19 Recession Contraction

by Sarah Daniels April 20, 2020

Since the end of the Great Recession, Orlando has been among the country’s fastest-growing economies and strongest multifamily markets. After 2014, metro payroll employment increased at a 3.7 percent compound annual rate, 120 percent faster than the national average. Only Austin surpassed Orlando for payroll growth among the peer group of 50 large metropolitan markets, according to The RED 50, a proprietary econometric model developed by RED Capital Research. Personal income grew about 6.8 percent annually, 45 percent faster than the national average. Apropos of the apartment sector, effective rents advanced at a 5.9 percent annual rate, according to Reis data, surpassed only by Atlanta (6.9 percent), Dallas (6.0 percent) and Nashville (6.2 percent) among growth markets — and not by much. All the while, the sources of Orlando’s prosperity grew more diverse and its labor force more highly skilled. In the past five years, the fastest growing segments of the metro economy were professional, technical and scientific services, air transportation, manufacturing and construction. Indeed, employment growth in the sectors most popularly associated with Orlando — arts and entertainment plus food services and lodging — was outpaced by the finance and insurance industry. Nonetheless, theme parks, resort hotels, leisure service and …

April 20, 2020

Acquisitions California Features Western Western Feature Archive

IRS Notice Extends Identification, Exchange Deadlines for 1031 Deals Falling Between April 1 and July 15

by John Nelson April 16, 2020

Many real estate investors seeking tax deferral in a 1031 exchange, as well as owners contemplating a sale of an investment property in the near future and intending to perform a 1031 exchange, have been anxiously awaiting guidance from the IRS on the impact of the COVID-19 pandemic on the time deadlines in an exchange. On April 9, 2020 the IRS issued Notice 2020-23, which extended many deadlines for real estate investors affected by the COVID-19 outbreak, including Section 1031 exchange time deadlines. This notice provides that any person performing a time-sensitive action listed in either § 301.7508A-1(c)(1)(iv) of the Procedure and Administrative Regulations or Revenue Procedure 2018-58, 2018-50 IRB 990 (Dec. 10, 2018), which is due to be performed on or after April 1 and before July 15, 2020, is an “affected taxpayer.” This includes the 45-day identification and 180-day exchange period deadlines in both deferred and safe-harbor reverse 1031 exchanges. Therefore, pursuant to Notice 2020-23, if the end of an investor’s 45-day identification period or 180-day exchange period in a deferred exchange — or the parallel periods in reverse exchanges under Revenue Procedure 2000-37 — falls between April 1 and July 15, the applicable period is automatically extended …

April 16, 2020

Acquisitions Arizona Features Western Western Feature Archive

‘Titleman’ John Lotardo Says Buyers, Sellers Seek Solutions to Obstacles for Closings During Time of Pandemic

by John Nelson April 16, 2020

Closing deals in the current environment — or even getting them to progress — has been challenging for the past few weeks. Municipalities are struggling to keep up with volume, and online notarization is present in some states but not others. Western Real Estate Business recently spoke with John Lotardo, senior vice president and director of operations for Commonwealth National Title Insurance Co. based in Arizona. Lotardo, also known as the Titleman, spoke to WREB about how commercial real estate transactions are closing and moving forward during the COVID-19 pandemic. WREB: What is your “new normal”? How are you managing business day-to-day? Lotardo: My company has mandated that the majority of our teams work remotely. The majority of my time is remote as well. Being the operations director, I have to manage my employees, including our title and settlement employees, wherever they may be. As a national commercial office based in Arizona, we have always been forward-thinking with technology. Our transition to a mix of folks in the office together with a remote workforce, while it has been challenging at times as for many other businesses, it wasn’t as difficult as it could have been. We had the proper hardware, …

April 16, 2020

Features Seniors Housing

Adequate COVID-19 Testing in Short Supply in Senior Living Industry, Concludes NIC Webinar Panel

by Jeff Shaw April 15, 2020

“How do you fight the enemy without knowing where it is?” The question posed by Kathryn Sweeney, co-founder and managing partner of Blue Moon Capital Partners LP, underscores the need for senior living communities to have priority access to personal protective equipment (PPE) and adequate testing to battle the COVID-19 virus. “We’re really fighting this battle with very rudimentary and limited tools,” said Sweeney, whose Boston-based firm provides equity exclusively to the seniors housing sector. “We have had inconsistent access to tests in our portfolio. What we’re finding is those operators who are more on the healthcare end of the spectrum have relationships with healthcare professionals such that they are able to access tests more so than operators who are more on the social end of the spectrum,” said Sweeney. Her comments came during an April 9 webinar hosted by the National Investment Center for Seniors Housing & Care (NIC). The hour-long webinar, titled “The Intersection of Operators and the Financial Community in a COVID-19 Environment” and moderated by NIC’s chief economist Beth Burnham Mace, featured two other speakers: Fee Stubblefield, founder and CEO of The Springs Living; and Wendy Simpson, president and CEO of LTC Properties (NYSE: LTC). As …

April 15, 2020

Nashville Rent & Occupancy Forecast Under COVID-19, RED Capital

Content Partner Features Lument Multifamily RED Capital Group Southeast Tennessee

Multifamily Sector in Music City Hits All the Right Notes

by Sarah Daniels April 13, 2020

In Homer’s Odyssey, Odysseus resisted the Sirens’ beguiling music by lashing himself to the mast of his ship. But few relocating businesses, ambitious young people from the Midwest and Mid-South or multifamily developers have been able to resist the charming sounds wafting from Music City these days. Nashville’s pro-growth disposition, competitive operating cost structure, high quality of life and vital cultural scene make it a formidable competitor for investment and business relocation among U.S. growth markets. Beverage marketer Icee, e-commerce unicorn SmileDirectClub and Mitsubishi North America were just a few of the nearly 100 companies that elected to move headquarters operations to or expand in the Nashville area last year. The moves were emblematic of Nashville’s emergence as the go-to spot for major industries — Tennessee now ranks second among states for automobile manufacturing employment after Michigan — and fast-growing tech-focused start-ups. The pipeline is just as robust in 2020. Employment statistics speak for themselves. Nashville added 30,000 or more payroll jobs in each of the last eight years: one of only two U.S. metros in the under 1.5 million-job weight class to check that box (Austin is the other.) While the unemployment rate was only 2.8 percent in January, …

April 13, 2020

Features Multifamily Student Housing

The Art and Science of Branding, Repositioning Student Housing Communities

by Alex Tostado April 10, 2020

When prospective college student residents and their parents first encounter a housing property, be it in person or online, the brand is undoubtedly one of the first things they notice. Along with the name of the property, they’ll notice the logo and color scheme, and gradually the story told by other aspects of the building as well, from amenities to design choices. Returning students will usually have heard about the property one way or another, and will have an idea of what sort of reputation it enjoys around campus. Creating and maintaining a consistent, desirable brand is one of the paramount functions of student housing owners and operators, especially in today’s climate where there are usually many choices and discerning students carry high expectations into property tours. Student housing marketing agencies have in turn spent more and more time perfecting their brands in recent years, hoping to create an entity that aligns with students’ values. “It’s very important to establish your identity, understanding who your target market is, how you are unique and how you want to speak to the audience,” says Barbara Gretsch, co-owner and vice president of MSSmedia. “It’s really about building your perception among the customer base.” …

April 10, 2020

Atlanta Rent & Occupancy Forecast Under COVID-19 Stress

Content Partner Features Georgia Lument Multifamily RED Capital Group Southeast

Atlanta Economic Juggernaut Encounters COVID-19 Roadblock

by Sarah Daniels April 8, 2020

In January, the Atlanta market was ticking like a fine Swiss watch. With leadership from its robust crew of business, education, healthcare, accommodations and leisure services industries, the economy cruised into 2020 with a full head of steam. Although moderately slower than regional peers, Atlanta’s pace of job creation was considerably faster than state and national averages, contributing to falling unemployment — the metro rate was only 3.2 percent in January, the lowest ever for the first month of the year — and strong absorption of office space in blossoming Midtown. Construction projects large and small transformed the landscape at a formidable pace, molding urban neighborhoods in a grand style rarely seen in 21st century America. Multibillion dollar developments like Centennial Yards and the ambitious mass-transit-inspired Atlanta Beltline project promised to enhance the urban living environment while preserving Atlanta’s renowned quality of life. No commercial real estate segment was more active than multifamily. Last year, apartment properties valued at nearly $8 billion exchanged hands, establishing a metro series record. In addition, construction of more than 17,000 units is underway — assets with stabilized value of about $2.5 billion — and another 25,000 units are planned. Late-decade property performance was among …

April 8, 2020

Features

General Contractor Survey: 27 Percent of Firms Report Layoffs Since Coronavirus Outbreak

by Alex Tostado April 7, 2020

More than a quarter of general contracting firms in the U.S. have reported layoffs due to the nationwide coronavirus (COVID-19) outbreak, a recent study by the Associated General Contractors of America (AGC) found. The survey was conducted from March 30 to April 2 for AGC members. Of the 1,296 respondents, 27 percent said they have had to lay off, furlough or fire employees. The survey was released April 3, the same day the Bureau of Labor Statistics (BLS) released its March job report, in which it reported the U.S. economy lost 701,000 jobs. The BLS found that the construction industry lost 29,000 jobs from February to March. AGC chief economist Ken Simonson notes that the BLS numbers are through March 12, when the COVID-19 outbreak was still in its relative infancy in the U.S. Indeed, AGC’s April 3 survey reflects the fast-spreading response to COVID-19, with 55 percent of firms reporting a delay or stoppage on worksites, a drastic jump from the survey released March 27, when 39 percent of firms reported a delay or stoppage. The survey released March 20 saw a 28 percent slowdown. The most common source of delay or disruption, cited by 35 percent of respondents, …

April 7, 2020

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