Southeast Feature Archive

Seniors Housing Transaction Activity Will Not Return to Normal Levels This Year, Says InterFace Panel

by John Nelson August 22, 2023

ATLANTA — One of the central questions of the investment panel at InterFace Seniors Housing Southeast was: Will transaction activity return in the fourth quarter? When Brooks Blackmon, panel moderator and executive managing director of Blueprint Healthcare Real Estate Advisors, asked the question, there was a quick response from the panel — “no.” “Return to what?” asked Kelly Sheehy senior managing director of Artemis Real Estate Partners. “Higher than today? Yes. Compared to 2019? No, it’s going to take time.” InterFace Seniors Housing Southeast is an annual conference hosted by France Media’s InterFace Conference Group, Seniors Housing Business and Southeast Real Estate Business. The event was held on Wednesday, Aug. 16 at the Westin Buckhead Atlanta hotel. Blackmon moderated the discussion. The panelists agreed that the fly in the ointment that has stifled investment sales the past few quarters has been the rapid runup in interest rates. The 10-year Treasury yield was at 4.3 percent at the time of this writing, which is the highest level since 2007. The secured overnight financing rate (SOFR) and federal funds rate, two short-term benchmark interest rates, have risen by more than 500 basis points in roughly 16 months. “Until debt markets improve, you’re …

August 22, 2023

Features Georgia Industrial Loans Multifamily Office Retail Southeast Southeast Feature Archive

Lenders, Borrowers Are in a Holding Pattern Until Interest Rates Settle

by John Nelson July 19, 2023

The U.S. economic picture is an opaque one for lenders and borrowers alike as inflationary pressures persist and the massive swings in interest rates are still working their way through the economy. At its May meeting, the Federal Open Markets Committee (FOMC) raised the federal funds rate for a 10th consecutive time to a target range of 5 to 5.25 percent. The fed funds rate is the interest rate that U.S. banks charge each other to lend funds overnight. This time a year ago, the short-term benchmark rate was at a range of 0.75 percent to 1 percent. Raising the feds fund rate is the primary way that the Federal Reserve combats inflation, which was at a 3 percent annual rate in June, according to the Bureau of Labor Statistics’ Consumer Price Index (CPI). The CPI is at its lowest level in more than two years, which is generally viewed as a positive sign for economic stability, though the June figure is 100 basis points more than the Fed’s target inflation goal of 2 percent. Jason Scott, managing director and head of conventional loan production at Regions Bank, estimates that it can take six to eight months for each interest …

July 19, 2023

Affordable Housing District of Columbia Features Loans Multifamily Seniors Housing Southeast Southeast Feature Archive Student Housing

Rising Interest Rates Take Toll on Fannie, Freddie Deal Volume

by John Nelson July 7, 2023

The multifamily divisions of Fannie Mae and Freddie Mac are off to a slow start this year as the government-sponsored enterprises (GSEs), their network of lending partners and multifamily borrowers contend with rising interest rates. Fannie Mae’s volume of new multifamily business totaled $10.2 billion in the first quarter of 2023, which is a 36 percent decrease from the same period a year earlier when the agency closed $16 billion. Freddie Mac closed $6 billion in new multifamily business in the first quarter, a year-over-year decrease of 60 percent. Seasoned agency lending professionals all point to elevated borrowing costs as the primary reason for the two agencies closing less business thus far in 2023. “The rapid increase in rates across the board has really been a shock to the industry,” says Vic Clark, senior managing director and head of conventional multifamily production at Lument. At its May meeting, the Federal Open Markets Committee raised the federal funds rate to a target range of 5 to 5.25 percent. The fed funds rate is the interest rate that U.S. banks charge each other to lend funds overnight. This time a year ago, the short-term benchmark rate was at a range of 0.75 …

July 7, 2023

Affordable Housing Build-to-Rent Conference Coverage Features Multifamily North Carolina Single-Family Rental South Carolina Southeast Southeast Feature Archive

Suburbs Are King for Carolinas Multifamily Market, Say InterFace Panelists

by John Nelson June 21, 2023

Suburban markets in the Carolinas are the big winners in the current multifamily landscape, both from a new development and rent growth perspective, according to the various panelists at the InterFace Carolinas Multifamily conference. Hosted by InterFace Conference Group and Southeast Real Estate Business, the annual event took place on May 25 at the Hilton Charlotte Uptown hotel. At the end of the leasing and operations panel, moderator Mike Susen, senior director of real estate at Greystar, asked the property managers on stage if they could manage any product type in any Carolinas market, which they would choose. The consensus was their dream assignments lie in the suburbs. “Let’s do mid-rise suburbs, something out toward Matthews or the Mint Hill area,” said Amanda Kitts, senior vice president of property management at Northwood Ravin, referring to the suburbs of Charlotte. “I’d want to do product that those markets haven’t seen yet.” “Suburban product is still really strong right now,” added Bob Moore, co-founder and CEO of FCA Management LLC. “Tertiary markets are going to surprise you. You’ll see opportunities to do some deals where there has been a lot lower supply.” Property managers are keen to handle suburban communities because those …

June 21, 2023

Conference Coverage Features Industrial North Carolina Southeast Southeast Feature Archive

Interstate 85 Corridor Industrial Markets Aren’t Overbuilt Yet, Say InterFace Panelists

by John Nelson June 1, 2023

Interstate 85 traverses through the heart of the Southeast, the fastest-growing region in the United States by way of population. The southern terminus of the 666-mile interstate is in Montgomery, Ala., home of the mega Hyundai Motor Manufacturing Alabama plant, and it travels north to just shy of Richmond, Va., the site of North America’s first LEGO factory. Along the way, I-85 connects through Atlanta and the Carolinas markets of Greenville-Spartanburg, Charlotte, Greensboro and Raleigh-Durham. These I-85 Corridor markets have seen their fair share of industrial development in recent years, so much so that for the first time this cycle, some experts are worried about overbuilding. Steven McGee, vice president of Southeast development at Rockefeller Group, said that half of the nation’s population growth has been coming to the Southeast region, and that faucet isn’t expected to be shut off anytime soon. “America is getting bigger, and half of that growth is occurring in three or four states,” said McGee. “I don’t see any real structural elements that are stopping that growth. It’s a challenge on the timing [for industrial deliveries], but in almost every market we have record vacancy. We have very few options for occupiers coming into the …

June 1, 2023

Features Georgia Self-Storage Southeast Southeast Feature Archive

Demand for Self-Storage Remains Intact, but Threats of Oversupply Loom

by John Nelson February 9, 2023

The self-storage sector has historically been considered resilient and recession-resistant. This year, key trends are already emerging that will contribute to the health and performance of this $80 billion industry. Despite risks of oversaturation in some urban markets, 2023 promises to be a strong year for self-storage investments. Shined-up facilities What started in early 2000s continues to today. Where decrepit, one-story metal buildings with chain-link fences were the standard, now high-caliber, well-designed and polished facilities dot the landscape. Today, new development is almost exclusively Class A product. Intown and suburban communities demand it. And customers now expect professional lobbies with music and complimentary snacks and beverages, staffed by knowledgeable and skilled managers selling space that is clean, bright and secure. The once red-headed stepchild of commercial real estate is now the belle of the ball. The proof can be seen in the fervent attention from public REITs and private equity firms. Blackstone Real Estate Income Trust grabbed headlines in 2020 with its acquisition of Simply Self Storage for $1.2 billion. Smaller, yet just as notable, transactions also support increased valuation. In 2022, Space Shop Self Storage, one of the top 20 self-storage operators in the United State, sold two portfolios …

February 9, 2023

Affordable Housing Development Features Multifamily Southeast Feature Archive

City Leaders, Private Sector Need to Safeguard Affordability for Legacy Residents

by Jeff Shaw January 31, 2023

— By Dennis Richards Jr., Atlanta BeltLine Inc. — Rapid development of Class A apartments across major U.S. cities has left many community leaders struggling to create affordable housing for its citizens. Atlanta is no exception. City leaders recognize the demand for new housing supply, but they know that once new developments are delivered to areas in and around formerly underserved and underinvested neighborhoods, long-time residents are at greater risk of displacement due to rising rents or rising tax assessments. As we look to the future, it’s imperative that development projects advance equitably. Here in Atlanta, Mayor Andre Dickens pledged about $59 million from the city and in May assembled the Affordable Housing Strike Force, a task force comprised of leaders from government and nonprofit sectors. The group’s goal is to build and preserve 20,000 affordable housing units while also preventing the displacement of city residents. According to the city of Atlanta, 1,739 affordable units have been built and 3,940 are under construction since the mayor issued this mandate. Executing the Vision The Atlanta BeltLine Inc. (ABI) is the agency responsible for developing the Atlanta BeltLine, a 22-mile, multiuse trail that runs through the core of the city. This project includes programming …

January 31, 2023

Affordable Housing Conference Coverage Features Georgia Multifamily Southeast Southeast Feature Archive

Interest Rate Volatility Will Slow Multifamily Investment Activity in 2023, Says InterFace Panel

by John Nelson December 6, 2022

ATLANTA — A lot can happen in a year. This time a year ago, the 10-year Treasury yield was at 1.489 percent, the federal funds rate was at a range of 0 to 0.25 percent and SOFR was at 0.05 percent. As of this writing, those three benchmark interest rates are at 3.527 percent, 3.75 to 4 percent and 3.82 percent, respectively — none of which are within 200 basis points from a year ago. Debt capital has become decisively more expensive, and officials at the Federal Reserve are signaling that more rate hikes are coming. For the U.S. multifamily sector, the result is that investors are increasingly becoming “pencils down” until interest rates find their footing. “We haven’t had much [investment] sales volume, as you can imagine, in the third or fourth quarter,” said Bennett Sands, managing development director at Wood Partners, an Atlanta-based apartment developer. “Looking ahead, our sales volume in 2023 will be down 50 percent [from 2022], if we’re lucky.” “It has been pretty quiet the past few months, and we expect that to continue for the next few months as well,” added Andrew Zelman, vice president of acquisitions at GID, a multifamily and mixed-use developer …

December 6, 2022

Features Heartland Feature Archive Northeast Feature Archive Other Southeast Feature Archive Texas & Oklahoma Feature Archive Western Feature Archive

Forecast Survey: What’s Your Take on Commercial Real Estate in 2023?

by John Nelson November 21, 2022

The editors of REBusinessOnline.com are conducting a brief online survey to gauge market conditions in 2023, and we welcome your participation. The survey should only take a few minutes to complete. Questions range from property sectors that you are most bullish on heading into 2023 to trends in deal volume to your outlook for interest rates. The results of our 12th annual survey will be collated and published in the January issues of our regional magazines. Conducting these surveys is part of our mission at France Media to provide readers with indispensable information, and we couldn’t do it without your help. To participate in our broker/agent survey, click here. To participate in our developer/owner/manager survey, click here. To participate in our lender/financial intermediary survey, click here. (Note: Please remember to click on “done” to properly submit the survey.)

November 21, 2022

Features Multifamily Seniors Housing Southeast Feature Archive

InterFace Keynote: Economist Expresses Optimism Amid Concerns Over Economy, Labor

by Jeff Shaw September 14, 2022

ATLANTA — After a quarter characterized by rising costs of living and mounting inflation, “recession” is the word on everybody’s lips. But Roger Tutterow, professor of economics at Kennesaw State University in Georgia, states that “it is not a foregone conclusion that we’re in a recession today or that we’ll get there in the next several months.” The official definition of a recession is not two consecutive quarters of negative growth in gross domestic product (GDP). “Most of the time it works out that way,” Tutterow said, “but the technical definition of a recession is a period of diminishing activity in production, trade, employment and income.” Tutterow noted that looking at these four components of economic activity and comparing them to today indicates a softening economy and an elevated risk of recession, but he does not believe that the economy is necessarily contracting. He puts the risk of a recession in the next 12 months as roughly one chance in three. Tutterow’s assessment of the current state of the economy and his near-term outlook came during a keynote address Tutterow delivered at the ninth annual InterFace Seniors Housing Southeast, a networking and information conference hosted by France Media’s InterFace Conference …

September 14, 2022

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