RED Capital Group

Boston Multifamily Rent and Occupancy Forecast 2020

RED Mortgage Capital: Strong Economy Boosts Boston Multifamily Performance, but Looming Supply Likely to Hinder Returns

by Jaime Lackey February 19, 2020

The country’s largest commercial real estate services firm recently selected Boston as its choice for strongest U.S. gateway multifamily market performer for 2020, and with good reason. The Eastern Massachusetts economy gained momentum in 2019, propelled by its world class “Eds and Meds” cluster and resurgent high tech, R&D and financial management communities. Income growth and job creation ran ahead of national averages and apartment markets remained tight and rent growth robust regardless of elevated supply. Investor demand for metro apartment properties surged, especially after mid-year, while cap rates remained accessible by primary market standards, especially in the suburban Class B segment. Metro job creation trends fell into a bit of a funk in the fall and winter of 2018-2019 but rebounded vigorously in the second half. Payrolls increased at a brisk 31,200-job, 1.7 percent year-on-year pace after mid-year, representing the fastest growth recorded in three years. Sector leadership was provided by Boston’s top knowledge industry sectors, headed by higher education (8.5 percent), research and development (9.8 percent), software and computer network design (4.9 percent) and financial management (2.6 percent). Only softness in the consumer-driven side of the labor market – construction, retail trade, personal services and government – held …

February 19, 2020

Affordable Housing Loans Lument Multifamily ORIX RED Capital Group Seniors Housing Texas

Red Mortgage Arranges $22M Loan for Rehabilitation of Affordable Housing Portfolio in Texas

by Taylor Williams May 15, 2019

TEXAS — Red Mortgage Capital, a division of ORIX Real Estate Capital LLC, has arranged a $22 million loan for the rehabilitation of 14 affordable housing properties totaling 556 units located across 12 rural Texas communities. Existing debt on the properties was also restructured as part of the deal. The borrower was a joint venture between Related Affordable, a division of Related Cos., and the Texas Housing Foundation (THF). The United States Dept. of Agriculture (USDA) provided the loan through its rural development program.

May 15, 2019

Loans Lument Multifamily New Jersey Northeast ORIX RED Capital Group

RED Arranges Acquisition Financing for $60M Apartment Portfolio in Union City, New Jersey

by Taylor Williams May 7, 2019

UNION CITY, N.J. — RED Mortgage Capital, the lending arm of ORIX Real Estate Capital, has arranged acquisition financing for a $60 million portfolio of apartment properties in Jersey City, located across the Hudson River from lower Manhattan. The portfolio comprises 18 properties and includes 481 units of affordable housing product. John Darrow, Jim Martin and Harris O’Connell of RED, along with Brad Domenico of Progress Capital, arranged the financing through Freddie Mac’s small balance loan program. The loan, the borrower of which was not disclosed, featured a fixed interest rate and a 20-year term.

May 7, 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

California Features Lument Multifamily RED Capital Group Western

RED: California’s Southland Economy Loses Steam but Apartment Performance and Property Markets Strengthen; Cap Rates Decline

by Jaime Lackey March 27, 2019

Since the Baby Boom generation was in its infancy, Southern California has represented the apex of American popular culture, with its freedom, fun and limitless opportunity. But in the last few years the Southland’s place in the American imagination has been superseded to a degree by the digital prowess of its Bay Area and Pacific Northwest neighbors. Recently, the tide has begun to turn. While still wildly successful economically and culturally influential, the Bay Area, Seattle and Portland seem to be bumping into resource constraints that have dimmed their luster. By contrast, the Southland has found its stride, attracting increasing amounts of venture capital, building powerful digital and biotech platforms and proving a bit more adept than the cities to the north at finding space to facilitate economic and population growth. Venture capitalist Peter Thiel hasn’t been the only titan to notice. The impact on multifamily markets is palpable. Property sales volume records were shattered last year and cap rates fell to historic lows. Investors are increasingly embracing the value-add strategies popularized in lower-cost growth markets, driving prices of aging Class B garden properties higher and fueling faster rent growth in submarkets where the renter-by-necessity tenant predominates. Although increased supply …

March 27, 2019

Company News Lument Multifamily New York Northeast RED Capital Group

RED Mortgage Capital Adds New York Lending Office

by David Cohen February 22, 2019

NEW YORK CITY — RED Mortgage Capital has added a new multifamily affordable lending office in New York. Sean Cullen and Ronnie Gyani will lead the operations of the office. Previously, Cullen and Gyani worked together providing affordable housing services at RBC Capital Markets as well as ACRE Capital. Most recently they served at Barings Multifamily Capital originating affordable housing loan products, including Fannie Mae, Freddie Mac, FHA/HUD and balance sheet executions.

February 22, 2019

Content Partner Features Lument RED Capital Group Western

RED Capital Group: The Northwest Enters 2019 with Strong Momentum, Rising Risks

by Jeff Shaw February 1, 2019

For decades, the Pacific Coast has defined the American avant garde. From the Beats and Hippies of the Fifties and Sixties to today’s coders, gamers, software engineers and social network titans, the West Coast has set the standard for contemporary cutting edge social and life-style evolution. Lately, the region has emerged as a global economic leader as well. The rise of Big Tech operations in the five Pacific Northwest metro areas we cover — the East Bay, Portland, San Francisco, San Jose and Seattle (the “Pacific 5”) — has altered their economic landscapes profoundly. From 2014 to 2017, nominal metropolitan GDP per capita increased more than three times faster than the national average, and personal income per capita — already considerably higher than the U.S. mean — increased at an 80 percent faster rate than the metropolitan norm. Wealth creation and income growth on this scale fueled commensurate demand for rental housing space, especially the luxury infill product favored by investors and developers. Total Pacific 5-occupied apartment stock increased at a 2.4 percent annual rate over the three years ended in 3Q18 (Reis) — 20 percent faster than the balance of the RED 50, RED Capital Research’s large market peer …

February 1, 2019

Content Partner Features Lument Multifamily RED Capital Group Texas

RED: Texas Multifamily Performance Moderates in 2018, While Economy Booms

by Jaime Lackey December 14, 2018

With a preference for low taxes and business-friendly regulation, Texas is America’s proving ground for free market economic theories — a crucible in which the benefits of economic liberty are tested. While the long-term impact of the Lone Star State’s experiment remains an open question, it is hard to gainsay its impressive accomplishments to date. Texas recorded the fastest GDP growth among the 50 states (6.0 percent) in second quarter 2018, and the third-fastest compound annual GDP growth rate since the Great Recession (3.1 percent). By way of population growth, Texas ranked second among states since 2010, trailing only Utah. In terms of the 20- to 34-year-old “renter cohort” Texas was the leader, posting a robust 2.1 percent annual rate growth rate. Powerful economic and population growth go hand in hand with multifamily performance. Indeed, the five Texas markets that we model econometrically — Austin, Dallas, Fort Worth, Houston and San Antonio — posted stronger fundamentals in the current decade than the balance of our RED 50 large market peer group in nearly every category. The “Texas 5” occupancy increased by an average of 564 basis points over the period (Reis), nearly three times as much as the non-Texas component. …

December 14, 2018

Content Partner Features Lument RED Capital Group

RED: Florida 2018 Multifamily Performance Shines, Despite Rising Supply

by Jaime Lackey November 15, 2018

Florida markets typically perform well during flush economic times and the current cycle isn’t an exception. Blessed with the fastest growing population east of the Rockies and a business-friendly tax and operating cost environment, Florida is one of the first alternatives multifamily developers and investors look to when the primary markets begin to feel crowded. True to form, Florida experienced record investment sales volume in each of the past two years, and 2018 is shaping up to meet or exceed last year’s total. Acquisition cap rates continue to track lower, with asset prices reaching new highs. By the same token, the supply pipeline is building and occupancy is beginning to erode at the margin. Nearly 70,000 units in 300 projects are under construction across the state and another 375 or more projects are proposed. At least 40,000 new units will be delivered this year, and vintages of similar magnitude can be expected in 2019 and 2020. Can the Sunshine State property performance and investment returns continue to sizzle under these conditions? Strong Job Growth in Jacksonville and Tampa Keep Apartment Markets on Even Keel To date, Jacksonville and Tampa have exhibited the greatest resiliency among the six Florida markets that …

November 15, 2018

2018 Mid-Atlantic Multifamily Rent Growth - RED Capital

Content Partner Features Lument RED Capital Group

RED: Mid-Atlantic Region 2018 Multifamily Performance Update

by Jaime Lackey October 18, 2018

As the real estate cycle enters the late innings, multifamily investors increasingly are seeking alternatives to high-cost coastal metros but remain unwilling to sacrifice the property market liquidity found in the primary markets. Many are finding the right balance of opportunity and liquidity in the Mid-Atlantic States, where cap rates are often higher than in the “favored five” markets and value-add opportunities in strategically located Class B properties abound. RED Capital Research (RCR) performance models suggest that the Mid-Atlantic’s season in the sun has longer to run. Philadelphia Apartment Market Ranks Second Among the Top 50 U.S Markets for Risk-Adjusted Returns Sales of Philadelphia apartments topped $2 billion during the 12-month period ending in June, a 125 percent increase over the year-earlier period. Fund and trust buyers dominated trade, concentrating on urban mid-rise and suburban garden value-add plays at mid-5 percent to low-6 percent cap rates. Investors penciled IRRs in the mid-6 percent range for Class A assets, and the low-7 percent area for value-adds. The metro economy has performed well since 2015 — and posted accelerating gains in the spring and summer. RED Research models forecast further above-trend payroll job creation through 2019, before higher interest rates curb growth. …

October 18, 2018

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