Features

The Case for the Continued Strength of the Multifamily Sector in 2019

by Kristin Harlow May 14, 2019

Capital One’s survey conducted at the National Multifamily Housing Council’s annual conference earlier this year offered a lot of food for thought regarding the outlook for the multifamily sector in 2019. The vast majority of respondents — 70 percent — believe that we’re nearing the end of the current economic cycle. But despite that notion and despite the 70 percent who are concerned about either rising costs or interest rates, plenty of optimism remains. To this point, 37 percent cited strong fundamentals and 29 percent pointed to an abundance of capital to deploy as drivers of another strong year in this all-important segment this year. Indeed, Freddie Mac predicts multifamily origination volume will grow to $317 billion this year, driven by solid market fundamentals and strong investor demand for properties. The 2019 figure will exceed by 3.9 percent the $305 billion in originations that had been estimated for 2018. Nowhere is this trend more visible than in the New York multifamily market, where demand continues to boom. We see this pattern play out in places like Long Island’s Nassau County, where there’s a definite lack of multifamily inventory in locations like Garden City and New Hyde Park, and where new …

May 14, 2019

Features

103 Consecutive Months of Job Growth and Counting: Gains Total 263,000 in April

by Jeff Shaw May 9, 2019

Beating expectations, the U.S. economy added 263,000 jobs in April, according to the Bureau of Labor Statistics (BLS), marking 103 consecutive months of employment gains. Meanwhile, the unemployment rate ticked down two-tenths of a percentage point to 3.6 percent, the lowest level since 1969. Some observers are calling the latest BLS report “an April surprise” since the consensus forecast among economists surveyed by The Wall Street Journal called for total nonfarm payroll employment to increase by 190,000. The latest employment data comes on the heels of positive news that the U.S. GDP grew at a 3.2 percent annualized rate in the first quarter of 2019. REBusinessOnlinereached out to three economic experts to get their takes on the latest data and its impact on commercial real estate. The three participants in the online Q&A included Andrew Nelson, U.S. chief economist for Colliers International; Ryan Severino, chief economist for JLL; and Tim Wang, managing director and head of investment research for Clarion Partners LLC. The following are their edited responses: REBusinessOnline: Can you explain why the economy is performing better than expected so far this year and the effect that that’s having on commercial real estate? Andrew Nelson: The economy has outperformed expectations …

May 9, 2019

Features Multifamily Student Housing

Designing and Developing Student Housing for Gen Z

by Katie Sloan May 8, 2019

Gen Z is one of the most fiscally responsible generations we’ve seen in a long time, prompting student housing companies to find creative ways of satisfying both cost and quality of life for students, especially within the off-campus luxury housing market. The following are important features to consider when designing and developing a student housing community geared towards this demographic: Innovated Tech Experiences One thing we know about Gen Z is that they are hyper-connected and have always lived on-demand. With an influx of luxury student housing options, student housing complexes need to find a way to differentiate themselves and the use of technology is a good place to start. Voice-activated integrations, including smart home devices, TVs and appliances, are easy wins for attracting Gen Z’s, who appreciate and expect the aid of technology in most aspects of their daily lives. Flexible Community Spaces Amenity-rich apartments that incorporate both community gathering spaces and wellness offerings are taking the housing industry by storm. Specifically, community gathering spaces with great Wi-Fi, comfortable, easy-to-reconfigure seating and a big screen TV. These spaces should be multi-purpose, from a studying lounge to a place to host dinner with friends, and they need to be flexible …

May 8, 2019

Conference Coverage Features Multifamily Nevada Western Western Feature Archive

Vegas Multifamily Renters Want Higher End Properties, Need More Affordable Options, Say InterFace Panelists

by John Nelson May 6, 2019

The Las Vegas Valley’s multifamily market is at an interesting crossroads, according to panelists at InterFace Las Vegas Multifamily. Hosted by InterFace Conference Group and Western Real Estate Business, the half-day conference was held April 24 at the Four Seasons Hotel in Las Vegas. The metro area’s population is growing at a rapid pace, with a net migration of 45,000 new residents in 2018, according to research from Marcus & Millichap. This is the largest annual total for Las Vegas since 2007, right before everything went south for the Southwest. “We started to recover later,” said Stephen Miller, professor and director of the Center for Business and Economic Research at the University of Nevada, Las Vegas (UNLV), who gave the conference’s special lunch presentation. “The recession here was deeper than the national average. It has been a slow slog, but in the last couple of years we’ve been growing more rapidly than any other state in the union in terms of employment.” He’s not wrong. Companies have already added 33,000 new positions to the Las Vegas Valley in 2019. This is a 3.2 percent gain that exceeds the previous five-year average, noted Marcus & Millichap. Most of these jobs were …

May 6, 2019

Conference Coverage Features Industrial Nevada Western Western Feature Archive

‘Mature’ Las Vegas Industrial Market a Safe Bet for Investors, Say InterFace Panelists

by John Nelson May 2, 2019

A stable economy, lower unemployment rate and diversification of industries are bringing more overall investment activity to Southern Nevada’s industrial real estate scene, noted panelists at InterFace Las Vegas Industrial. Hosted by InterFace Conference Group and Western Real Estate Business, the half-day conference was held April 24 at the Four Seasons Hotel in Las Vegas. Using the terms “investment” and “Las Vegas” in the same sentence can cause many veteran decision-makers to pause as they remember the state that this city was in 10 years ago. During the Great Recession, Las Vegas was struggling to survive and many were uncertain about the city’s long-term future as visitors shunned Vegas hotels and casinos as they went into self-preservation mode. “There was nothing more depressing here than the recession when you could drive from one side of town to the other in half an hour because no one was going to work,” said Larry Monkarsh, owner of LM Construction and moderator of the conference’s Developers/Owners panel. Times have certainly changed, ushering in a new era of investment, commerce and development that has brought a renewed sense of confidence to Las Vegas. Though market players will always have varying opinions, one word reigned …

May 2, 2019

Conference Coverage Features Multifamily Student Housing Texas

Low Interest Rates, Favorable Demographics Set Real Estate Industry Up to Win, Says Nadji

by John Nelson April 30, 2019

What is the economic outlook for the year, and what does that mean for the student housing industry? Hessam Nadji, president and CEO of Marcus & Millichap/Institutional Property Advisors, answered just that in the keynote speech that kicked off the 2019 InterFace Student Housing Conference, which was held in Austin earlier this month and drew approximately 1,400 attendees. Nadji began by laying out the basics on where the industry is today economically in comparison to before and during The Great Recession. “We’ve added 21 million jobs since the bottom of The Great Recession, and that has caused a 120 basis point reduction in the unemployment rate at a time when inflation is 200 basis points below where we were in 2007,” he says. “That is the crux of why everything in our industry as a whole — commercial real estate, and student housing in particular — has done so well. The combination of really good growth with very little inflation, and therefore low interest rates. “We have 7.6 million job openings today,” continues Nadji. “That is a record number of employers looking for qualified employees and about one-third of those employers are having a hard time finding qualified workers. That …

April 30, 2019

Features Retail

Nothing New About the Old ‘Dark Store Theory’

by Jeff Shaw April 25, 2019

Assessors and their minions frequently take the position that an occupied store is more valuable than an unoccupied store, a conclusion commonly referred to as the “dark store theory.” Owners of big-box retail properties and their tax advisers bristle at this erroneous contention because real property taxes are just that — a tax on the value of the real estate. It is the assessor’s function to value the property’s real estate components, which consist primarily of land, bricks and mortar. In the case of most big boxes, the real estate components include land, concrete, pop-up concrete or metal slabs. It is a common but mistaken practice of assessors to place a greater taxable value on a big box occupied by a major retailer than on a vacant building of equal design, construction and utility. This errant valuation methodology has given rise to controversy played out through expert testimony and sophisticated argument before administrative agencies and the courts. It is in this context that the term “dark store theory” has come into play. A call to action Owners of big-box real estate need to deliver a consistent response in the face of this increasingly pervasive and costly misconception. And because informal meetings …

April 25, 2019

Apartment Stock Growth and Forecast - Intermountain States 2019

Arizona Colorado Features Lument Nevada RED Capital Group Utah Western

RED Mortgage Capital: Intermountain Region Generates Strong Apartment Performance and Value Creation

by Jaime Lackey April 25, 2019

West Coast markets garner more press clippings and public attention. But the Intermountain States — Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming — are posting impressive numbers that belie their station in the American consciousness. Offering Americans the sunshine and outdoor recreational opportunities they crave and the lower operating costs businesses seek, the region is in the nation’s sweet spot and taking full advantage of its position. Population, income and employment growth lead the nation. Indeed, the region claims the four fastest growing states in America — Nevada, Idaho, Utah and Arizona — and its seventh, Colorado. Meanwhile, Nevada, Utah and Arizona recorded the fastest rates of payroll job creation last year, and Colorado and Idaho figured in the top six nationally. Apartment rents increased accordingly. Late-cycle bloomers Las Vegas and Phoenix posted the fastest rent growth last year among larger markets and Salt Lake wasn’t far behind. Emerging markets like Boise, Bozeman and Reno were in the same league, chalking down high single-digit increases. Investors competed fiercely for opportunities in the region. Apartment sales volume in the five Intermountain metros (the “Intermountain 5”) covered by RED Capital Research (“RCR”) — Colorado Springs, Denver, Las Vegas, Phoenix …

April 25, 2019

Features Industrial Office

SIOR Conference Tackles E-Commerce, Technology

by Jeff Shaw April 25, 2019

WASHINGTON, D.C. — The Society of Industrial and Office Realtors (SIOR) held its annual Spring World Conference in Washington, D.C. at the Omni Shoreham hotel from April 10 through April 13. The event drew over 800 SIOR members from 12 different countries around the globe. Major topics of discussion at the conference included: the impact of e-commerce on the industrial market; emerging digital technologies and their practical applications for the brokerage community; a discussion of how brokers and investors can access opportunities with the U.S. Government General Services Administration and the Department of Veterans Affairs; and how emotional intelligence impacts success in our personal and professional relationships. Special guest speakers included: Joseph F. Coughlin, PhD, director of the Massachusetts Institute of Technology’s AgeLab and author of “The Longevity Economy,” who provided insight into how the lifestyles of an aging but energized, tech-enabled, older demographic will impact the built environment Robin Chase, co-founder and former CEO of Zipcar and author of “Peers Inc.” who discussed how a combination of people power and corporate power can unlock the potential of a new, collaborative economy Greg Lindsay, a senior fellow of the New Cities Foundation who gave a talk on the emergence of …

April 25, 2019

Features Multifamily Seniors Housing

Real Capital Markets: Seniors Housing Investment Outlook Strong Despite Slowdown in Sales, Construction

by Jeff Shaw April 23, 2019

CARLSBAD, Calif. — Seniors housing investment and construction in the United States slowed in the first part of 2019, but investors are confident in the long-term outlook for this sector, according to a “Senior Housing Snapshot” report by Real Capital Markets (RCM). Following several years of robust sales and construction activity, the seniors housing market is redefining itself, adjusting to shifts in investor activity and a focus by many investors on a long-term horizon, the report concludes. RCM’s national report incorporates the sentiments of investors across the country and national statistics on investment activity from Real Capital Analytics (RCA), as well as construction and occupancy statistics from the National Investment Center for Seniors Housing & Care (NIC). Based in Carlsbad, RCM is a marketplace for selling commercial real estate properties. U.S. investment sales in seniors housing totaled $2.8 billion in the first two months of 2019, down from $3 billion in the same time period in 2018. This follows $15.2 billion in sales for all of 2018. According to U.S. investors, developers and real estate brokers surveyed and interviewed for the report, 66 percent believe that activity levels in 2019 will be comparable to the total sales for 2018. “Perspective …

April 23, 2019

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