Features

Coronavirus & Capital Markets: Opportunity in the Midst of Caution

by Sarah Daniels August 3, 2020

Lenders and investors may be a little wary when approaching deals under the shadow of COVID-19, but opportunities to employ capital strategically when market prices are low can make for long-term opportunities. Many in commercial real estate hope to lay significant groundwork, strengthening their economic trajectories whenever the market recovery begins. Keith Kurland, senior managing director at Walker & Dunlop, serves as co-head of the company’s New York Capital Markets practice and spoke to REBusinessOnline about the business of sourcing and structuring debt and equity financing in the midst of coronavirus. Kurland joined Walker & Dunlop in January of this year, after the company acquired AKS Capital Partners, which was co-founded by Kurland in 2019. Coronavirus Conditions & the Impact on Lender and Investor Interest “Given our diverse and multi-sector client base, we are still actively financing almost every product type,” Kurland says. “While some sectors and deal types may be more challenging than others due to the impact of COVID-19, we are still tasked with supporting our clients to make sure that they’re either being defensive or offensive, depending upon the lifecycle of the projects that they’re currently invested in. Our team is currently marketing and under application with …

August 3, 2020

Features Multifamily Southeast Feature Archive Walker & Dunlop

Walker Webcast: Steady Apartment Rent Collections Buoyed by Unemployment Benefits

by Kristin Harlow July 31, 2020

BETHESDA, MD. — Several industry professionals are predicting that a second stimulus bill will be a $1.75 trillion package approved by Aug. 15. The comments came on a “Walker Webcast” webinar, entitled “All Eyes on Washington: What Will the Next Stimulus Bill Do for CRE?” that took place on Wednesday, July 29. Commercial real estate finance firm Walker & Dunlop hosts the webinar series. Willy Walker, chairman and CEO of Bethesda, Md.-based Walker & Dunlop, spoke with Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA); Doug Bibby, president of the National Multifamily Housing Council (NMHC); and Jeff DeBoer, president and CEO of Real Estate Roundtable. The three guests conversed on a variety of topics, with the possible extension of the eviction moratorium being one of the most discussed issues. Bibby of NMHC equated the moratorium to rent control. The notion sounds good because the consumer is protected, but it can have devastating effects on the owner, particularly in the multifamily space where a lot of landlords are smaller owner-operators. “They [multifamily owners] could lose everything with an eviction moratorium because they have mortgages, property taxes, insurance and payroll to pay,” said Bibby. Over 40 percent of apartment …

July 31, 2020

Portland Multifamily Rent Occupancy460x345

Content Partner Features Lument Multifamily Oregon RED Capital Group Western

Portland, Oregon Multifamily Fundamentals Wobble, but Remain Healthy Overall in June

by Sarah Daniels July 30, 2020

Five months into the pandemic, fissures are beginning to form in the foundation of the multifamily market. Through the spring leasing season, liquidity from enhanced unemployment insurance benefits and a yearning for stability in uncertain times were enough to maintain occupancy near pre-coronavirus levels and to provide something of a buttress for rents. As spring turned to summer, however, winds seemed to change direction, tenant patience began to fray and property performance waned. West Coast cities with high technology exposure were the first to exhibit material revenue attrition. Reduced employment and income prospects led many renters to reconsider the efficacy of paying the highest rents in the country. Many tenants chose instead to relocate to more affordable areas when leases expired (as many do during the spring leasing season) or simply vacated and broke existing leases. Rents in the San Francisco Bay Area have declined by about 4 percent since the beginning of the year, and as much as 9 percent over the last 12 months. More affordable markets, including Portland, also experienced softening, but to a lesser degree. While fleeing tenants apparently generated a “renter’s market” in San Francisco, absorption in a sample of 919 Portland properties surveyed by …

July 30, 2020

Features Texas Texas & Oklahoma Feature Archive

Attention Texas Owners: Beware of Property Tax Increases During COVID-19

by Kristin Harlow July 28, 2020

By Darlene Sullivan, Popp Hutcheson PLLC As if a global economic contraction and an unfolding recession across the United States were not enough, many commercial real estate owners across Texas have seen their taxable property values increase this year. While many of these owners are calling for property tax relief to offset the financial burden they are suffering due to stay-at-home orders and business closures triggered by the COVID-19 pandemic, they may be unsure of potential remedies to pursue or arguments to make. Given that the date of valuation is Jan. 1, 2020, property owners searching for relief are limited as to the information that appraisal districts will consider for this tax year. Potentially limited relief in 2020 does not mean taxpayers lack options, however. There are three key strategies that commercial property owners need to implement in 2020 if they want to maximize reductions in taxable value for this and future years. 1. Consider filing a 2020 appeal — even if the taxable value did not increase from the prior year. The state was already shutting down nonessential activities as appraisal districts were preparing to mail out their 2020 Notices of Appraised Value. Most appraisal districts delayed the mailings …

July 28, 2020

Florida Leasing Activity Restaurant Retail Southeast Southeast Feature Archive Video Webinar

Webinar: South Florida Retail Outlook: What is the Impact of COVID-19 on South Florida’s Retail Sector?

by Sarah Daniels July 27, 2020

(Panelists, clockwise from top left) Adam Tiktin, Tiktin Real Estate Investment Services; Rod Castan, Courtelis Company; Lyle Stern, Koniver Stern Group; Philip Rosen, Becker (moderator); Duane Stiller, Woolbright Development. Last week, Shopping Center Business and Southeast Real Estate Business hosted “South Florida Retail Outlook: What is the Impact of COVID-19 on South Florida’s Retail Sector?” Listen as a panel of retail experts discusses their gameplans: working with tenants and their employees as the industry seeks to adapt. Hear about attitudes towards loans, rent reductions, property value, next steps and more. See a list of some topics covered and their timestamps below: (07:00): How are restaurants and experiential tenants faring? (09:29) Adapting for the challenges of COVID-19 (17:28) South Florida retail rent trends over the next 180 days? (24:32) What can owners do today to position themselves to succeed? (36:00) When might we start to see real loan defaults and real distressed assets? (42:55) Lessons learned from 2007-2008 financial crisis (53:56) Decisions made in the pre-COVID-19 world that have carried over well into our current environment Hear how South Florida retail professionals are approaching industry challenges and evolving to meet the needs of retailers. Panelists: Philip Rosen, Becker (moderator) Adam Tiktin, …

July 27, 2020

Features Florida Retail Southeast Southeast Feature Archive

First Inning: South Florida Retail Market Resets as COVID-19 Throws a Curveball, Says SCB Webinar

by John Nelson July 23, 2020

The outbreak of COVID-19 has had an outsized impact on South Florida. According to Johns Hopkins University School of Medicine, the region’s three primary counties rank in the top 20 of confirmed COVID-19 cases as of Wednesday, July 22. At 92,345 cases, Miami-Dade County is No. 4 on the list. Broward County comes in at No. 9 with 43,747 cases, and Palm Beach County is No. 20 with 27,506 cases. The surge in cases has had a pronounced effect on the area’s retailers as citizens have resumed their caution in public settings for fear of contracting the virus. “There is a tremendous amount of distress across South Florida’s economy, and especially in retail,” said Philip Rosen, shareholder and real estate chair of law firm Becker. Rosen’s comments came during South Florida Retail Outlook, a webinar hosted by Shopping Center Business that discussed the impact of COVID-19 on South Florida’s retail sector. Rosen moderated the panel discussion, which had 337 registrants. The pandemic’s effect is not all negative as grocers, drugstores and hardware stores have enjoyed increased sales activity amid the crisis. However, the bulk of retail categories are suffering from extended closures and operating at limited capacities. Restaurants in particular …

July 23, 2020

Features Industrial

LightBox: Industrial Emerges as Strongest Commercial Real Estate Sector During Pandemic

by Alex Tostado July 23, 2020

NEW YORK CITY — The industrial sector has emerged as the strongest commercial real estate sector during the COVID-19 pandemic, according to a June LightBox report that updated information from the annual RCM/Lightbox — SIOR report. The surge in consumers buying goods and groceries online has fueled the demand nationwide. “Clearly, no commercial real estate asset class is immune to the immediate and long-term impact of COVID-19, a black swan event unlike anything anyone has experienced,” says Tina Lichens, senior vice president of broker operations at LightBox. “Industrial real estate, however, is in the best position to return to a place of strength once we get past the short-term pain and uncertainty.” New York City-based LightBox laid out five trends to watch in the industrial sector as the pandemic continues to grow in the country: 1. Investors return to core markets: Erik Foster, principal and head of industrial capital markets for Avison Young, expects the money to flow into stable core markets such as Chicago, the Inland Empire, New York/New Jersey and Dallas. Foster points to a May review by Avison Young showing rent demand surrounding last-mile facilities in city cores was 20 to 40 percent higher in markets like …

July 23, 2020

Content Partner Features Lument Multifamily RED Capital Group Washington Western

Seattle Could Provide Template for National Multifamily Recovery

by Sarah Daniels July 21, 2020

In the realm of apartment market research, Seattle represents a bellwether of sorts these days, where broader trends and themes can be parsed. Seattle’s economy, population and real estate landscape have grown at rates previously considered impossible in a primary market. The city stands at the veritable intersection of technological and generational change — the corner of Large Cap Tech Boulevard and Millennial Street — and it has developed into the avatar of the infill, wood-frame mid-rise design touchpoint that defines so much of today’s urban apartment architecture. What happens here will reveal some of the trends likely to follow in similar markets — from Raleigh to Portland. Seattle was also the first major U.S. metropolitan market to grapple with the novel coronavirus, so the path that it follows will provide some insight into how the American multifamily market will mutate as we adjust to “life in the time of COVID,” to borrow a note from Garcia Marquez. By the same token, the Jet City faces the prospect of digesting an enormous multifamily supply pipeline that was, for the most part, conceived for the pre-COVID-19 world. The manner in which this supply is absorbed will speak volumes about how the …

July 21, 2020

Features Loans Multifamily Student Housing

Student Housing Finance Transactions Continue Through Pandemic

by Jeff Shaw July 16, 2020

Despite the ongoing struggles faced by the student housing sector, lenders are still active, according to a recent survey by Student Housing Business. The coronavirus pandemic has had a major impact on all aspects of on- and off-campus student housing. In an attempt to better assess that impact and the sector’s outlook for the future, Student Housing Business, sister publication of REBusinessOnline, conducted a survey of industry professionals over the course of several weeks in May. The survey was segmented by industry function for specific elements of the business, allowing SHB to better understand the pandemic’s distinct influence on each segment of the industry. Of the survey’s 569 respondents, 19 defined their company’s role in the industry as that of a lender, debt capital source, mortgage banker or broker. In this segment of the industry, 15 percent of companies laid off or furloughed employees at the corporate level and 8 percent instituted pay cuts. When asked whether their companies are still financing, lending or facilitating any investment and development transactions, 77 percent indicated yes. Forty-six percent of respondents noted that they are currently most inclined to lend on investment deals with 38 percent noting they are equally interested in both development and …

July 16, 2020

Content Partner Features Lument Multifamily RED Capital Group Texas Texas & Oklahoma Feature Archive

Revenue Volatility: Friend or Foe to San Antonio Multifamily Investors?

by Sarah Daniels July 14, 2020

During the great multifamily bull market of this passing decade, investors became increasingly comfortable with exposure to highly volatile metropolitan markets. In an era when it was difficult to make a bad investment decision, the most lucrative were, in most cases, located in areas of the country known for their roller-coaster real estate cycles. Indeed, it seemed as though a purchase capitalization rate could never be too low if an asset was located in one of the primary markets. Volatility was an ally, not a foe — an investment feature, not a bug. With the onset of the COVID-19 pandemic and its attendant recession, however, volatility appears to have switched allegiances. The winds now favor, perhaps, the stable, predictable tortoises over the high-flying hares. In high-cost markets, the number of renters considering relocating to more affordable area codes has skyrocketed, and in the work-from-home era, this has become more of an achievable goal than an inchoate urge. For example, the San Francisco Apartment Association reported that 7.5 percent of tenants in the city — where rents increased at a 6.1 percent compound annual rate since 2010 — simply broke their leases in the three months that ended in May, moving …

July 14, 2020

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