Features

Coworking, Flexible Work Spaces are Latest Trends in Evolving Office Needs of Modern Workforce

by Alex Tostado March 5, 2019

The beauty of creative office is in the eye of the leaseholder. In today’s world, phrases like “coworking” and “flexible workspace” often arise in conversation, but what do these terms really mean? The definition varies depending on who you ask, where they are and what they do for a living. As these factors are often in flux, so is the meaning of creative office. However, there are four core elements that comprise the essence of creative office regardless of market or mindset: collaboration, engagement, technology and flexibility. These four tenets ultimately comprise a framework that drives profitability and increases employee engagement in an increasingly competitive environment. At the end of the day, these environments must not only enhance business goals, but also be specifically tailored to the culture and needs of the organizations they serve. Changing Workforce From a city’s urban core to prime business centers in the suburbs, the trends emerging in modern office spaces are in response to the rapidly changing needs of today’s workforce. Though it comes with an extra premium on rent, many startups and new employers are choosing to save capital on the front-end by moving into tech-equipped spec suites that enable them to hit …

March 5, 2019

Expect Multifamily Debt Market to Grow Overall in 2019, Says Walker & Dunlop’s Jeff Burns

by Taylor Williams February 28, 2019

SAN DIEGO — While agency volume may decrease slightly in 2019 due to tougher energy conservation standards in green lending programs offered by Fannie Mae and Freddie Mac, the multifamily debt market overall is expected to grow this year, according to a veteran mortgage banker. Jeff Burns, managing director at Walker & Dunlop’s Walnut Creek, Calif., office, spoke to REBusinessOnline at the MBA 2019 Commercial Real Estate Finance/Multifamily Housing Convention & Expo. The event, held at the Manchester Grand Hyatt San Diego, took place Feb. 10-13. Although the 10-year Treasury yield is down about 50 basis points since reaching 3.2 percent in early November, most economists expect long-term rates to rise in 2019. (Investor worries over trade conflicts, a volatile equities market and falling oil prices led to a precipitous drop in the yield on the benchmark Treasury note.) Burns, who is responsible for new loan origination in California and the western United States, discussed trends in agency lending as well as the state of the multifamily market. What follows are his edited responses: Rebusinessonline.com: What trends are you seeing in agency financing for the multifamily sector in the western region? Jeff Burns: Fannie Mae and Freddie Mac continue to …

February 28, 2019

Acquisitions Features

RCM: Investor Demand Holds Steady, Multifamily and Industrial Remain Most Attractive Classes

by Taylor Williams February 26, 2019

CARLSBAD, CALIF. — As 2019 begins to take shape, commercial real estate investors across the country are starting to hedge their positions on the overall strength of the market, according to Real Capital Markets’ (RCM) 2019 National Investor Sentiment Report. While investors remain optimistic about the overall fundamentals of America’s commercial real estate market, they are increasingly expressing cautionary tones, according to the report. There are still investment opportunities available as long as investors adjust their strategies, as suggested by survey responses. “For the past decade we’ve experienced unprecedented levels of investment activity, with each year establishing another new record,” says Tina Lichens, COO of Real Capital Markets. “With words like ‘plateau’ and ‘flattening’ now entering the lexicon, it’s important to note how far the market has come and that in these good times, plateaus are part of a healthy cycle.” Wayne Vandenburg, chairman and CEO at TVO Capital Management, an owner, investor and manager of multifamily assets globally, attributes the continued run in the investment markets to a strong U.S. economy. “The only place you can be assured of business doing pretty well overall is in the U.S.,” says Vandenburg. “Due to the size of our economy, we aren’t insulated by …

February 26, 2019

Development Florida Louisiana Southeast Southeast Feature Archive

Developers Can Rely on Wetlands Mitigation Banking to Offset Environmental Risks with New Projects

by John Nelson February 23, 2019

BATON ROUGE, LA. — Wetlands mitigation banking has established a track record of success in restoring and preserving crucial ecosystems in many states during the past several decades, while helping smooth the way for commercial development. And as the proven system is positioned to grow and expand, it deserves to be more widely known and recognized, according to a leader in the field overseeing restoration of thousands of acres throughout the South. A mitigation bank is a site that has potential and natural attributes but may have been altered or damaged through overuse or abuse such as ditching, drainage or logging that changed the landscape. Restoring land to function as part of a healthy ecosystem as nature intended takes time and money, planning and preparation. Commercial development relies heavily on mitigation banks in states like Florida where population growth requires land and much of the land is environmentally vulnerable, laced with creeks, rivers, wetlands and woods. One of the pioneers in wetlands mitigation banking, Baton Rouge-based EcoSystem Renewal LLC, has successfully helped restore vulnerable sites throughout Florida, Louisiana and Texas, particularly along the fragile Gulf Coast. The company has a turn-key approach that oversees projects, including dealing with regulatory agencies, and takes the risk of mitigation away from …

February 23, 2019

Features Midwest Multifamily Northeast Seniors Housing Southeast Texas Western

Paul Ryan: Positive Reforms Will Come to Seniors Housing, but Slowly

by David Cohen February 21, 2019

SAN DIEGO — Politics may slow down progress, but positive changes are on their way to the seniors housing industry and U.S. healthcare system, according to former Speaker of the House of Representatives Paul Ryan. Ryan’s comments during the opening general session Feb. 21 at the National Investment Center for Seniors Housing & Care (NIC) 2019 Spring Conference. The event drew nearly 1,700 seniors housing professionals to the Hilton San Diego Bayfront. Ryan, a Wisconsin Republican, gave a speech before sitting down for a discussion with moderator John Kelliher, managing director of Berkeley Resource Group. Ryan identified Kelliher as a long-time friend with a deep background in legislation, law and the military. The event was Ryan’s first speech since retiring from his political office six weeks prior. “We’ve got a lot of work to do because we are not ready for the baby boomer generation,” Ryan said regarding seniors housing. Ryan identified the top political challenges facing the seniors housing industry as healthcare reform, immigration reform and entitlements such as Medicare, Medicaid and Social Security. Facing the labor shortage Ryan said low unemployment is good for the economy as a whole, but creates struggles for business owners who simply can’t …

February 21, 2019

Features Midwest Northeast Retail Western

Entertainment, Dining Drive Success at Today’s Retail Center

by David Cohen February 20, 2019

Over the course of the last decade, we have seen a major evolution in retail real estate. Super regional malls and enclosed shopping centers, which once dominated the landscape, are being replaced by immersive, open-air centers that provide visitors with more than just a place to shop. Successful retail centers today are a destination — they provide excellent food and dining, aesthetically pleasing environments with open public space, and entertainment tenants and events that engage shoppers to stay longer, come back frequently and use the center as a hub for creating memories with friends and family. At the fifth annual Entertainment Experience Evolution conference, which took place at the Beverly Wilshire Hotel in Beverly Hills on February 12 and 13, the industry gathered together to take a closer look at the keys to success when embracing and implementing this trend at existing centers and new developments across the country. Does Entertainment Really Drive Foot Traffic? The conference opened with a keynote speech centered on an imperative question that many might be asking — does adding an entertainment element actually drive success and greater foot traffic to a center? And — more importantly — are there statistics to back this up? …

February 20, 2019

Sunridge Apartments in Nacogdoches, Texas

Features Loans

Financing Flexibility Remains Key in Today’s Fluid Environment

by Jeff Shaw February 14, 2019

Every year brings a few question marks in terms of what’s ahead. Some years have more unknowns than others; many agree 2019 is one of those years. From politics to the stock market to trade tensions, this year has its share of variables on top of traditional uncertainties, such as natural disasters. Add lots of capital chasing fewer deals, an affordability imbalance, and a disconnect between buyers and sellers, and those question marks continue to multiply. Lenders have generally remained disciplined and diligent in the current market, estimating their level of risk and confidence as best they can. While they don’t have a crystal ball any more than the rest of us do, many finance professionals believe flexibility may be the key to thriving in 2019. “Most lenders, particularly Fannie Mae and Freddie Mac, have adapted to a more fluid financial climate,” states Marcus & Millichap’s 2019 Multifamily North American Investment Forecast. “Lenders remain cautious, adopting tighter underwriting standards but aggressively competing to place capital into apartment assets.” As with many temporary blips on the horizon, the report recommends seeing the forest as a whole, rather than getting distracted by a few worrisome-looking trees. “Strong demand drivers supporting long-term yield …

February 14, 2019

California Features Western

Multifamily Sector, Energizer Bunny Share Common Trait, Says MBA’s Woodwell

by John Nelson February 13, 2019

SAN DIEGO — The multifamily sector is like the Energizer Bunny, says Jamie Woodwell, vice president of commercial and multifamily research for the Mortgage Bankers Association (MBA). “It just keeps going and going and going.” The product type remains an investment darling. Although 600,000 units are currently under construction nationally — maintaining an elevated level of building activity that is the highest since the mid-1970s — consumer demand remains strong. According to Reis, the national apartment vacancy rate finished 2018 at 4.8 percent, up from 4.6 percent a year earlier. Apartment construction started to accelerate in 2017 and remained elevated throughout 2018, raising concerns that the apartment market was becoming overbuilt. Fortunately for developers, apartment occupancy growth has nearly kept pace with supply growth. “We’ve got this great balance right now really between supply and demand on the multifamily side,” said Woodwell during Sunday’s opening session of the 2019 Commercial Real Estate Finance/Multifamily Housing Convention & Expo at the Manchester Grand Hyatt San Diego. Woodwell teamed up with Michael Fratantoni, chief economist for the MBA, to provide an economic overview and commercial real estate finance forecast. The apartment sector is not only benefitting from strong real estate fundamentals, but also healthy increases …

February 13, 2019

Features

IRR: Approach Commercial Real Estate with Caution in 2019

by Jeff Shaw February 12, 2019

DENVER — The post-Great Recession recovery years have seen unprecedented growth, but there’s plenty of volatility and cause for caution in 2019, according to Integra Realty Resources’ (IRR) Viewpoint 2019 publication. The annual report provides national and market-by-market overviews across five property types: office, multifamily, retail, industrial and hospitality. Viewpoint 2019 also examines trends from the U.S. economy, housing, capital markets, interest rates and employment, specifically as it relates to commercial real estate. “As we leave 2018 with a greater level of uncertainty than which we entered, it’s important to recognize that this increased uncertainty is mostly intangible,” says Anthony Graziano, chairman of IRR. “Current street conditions and major economic indices signal economic strength, but the market knows that the economy goes where the money flows. Some downside risks may lie ahead.” The report was produced in partnership with well-known veteran economist Hugh Kelly, who adds, “Though the middle quarters of 2018 saw a real economic surge, a lot of those gains were left behind by the end of the year. Trade policy and a downward revision in the housing outlook are going to have an industry-wide impact. Add rising interest rates to a flattening employment rate leads us to …

February 12, 2019

California Features Western

Fading Tailwinds Will Limit U.S. Economic Growth in 2019, Says MBA’s Chief Economist

by John Nelson February 11, 2019

SAN DIEGO — Despite a strong U.S. job market, GDP growth will slow now that the tailwind from the Tax Cuts and Jobs Act has largely dissipated, predicts Michael Fratantoni, chief economist with the Mortgage Bankers Association (MBA). More specifically, Fratantoni is forecasting the nation’s economy to grow 2 percent in 2019, down from 3.1 percent in 2018. Passage of the sweeping tax bill in late 2017 and signed into law by President Donald Trump “led to some front-loading of some additional spending and benefits, particularly on the corporate tax side that showed up as this faster growth rate in 2018,” explains Fratantoni. “We also know that the budget agreement that was reached [early last year] really concentrated about $300 billion of spending particularly in 2018, maybe a little bit into 2019.” The comments from the veteran economist came during a special session Sunday on the opening day of the 2019 Commercial Real Estate Finance/Multifamily Housing Convention & Expo at the Manchester Grand Hyatt San Diego. Jaime Woodwell, vice president of commercial/multifamily research for MBA, also provided an update on the state of the commercial/multifamily market during the session. The-four day conference has attracted mortgage bankers from across the country. One …

February 11, 2019

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