Month: November 2019

Apartment Sector Likely to Experience Continued Rent Growth, Albeit at a Slower Pace

Apartment rents are rising, but far below previous years’ levels.

Apartment rents are likely to keep rising, even if the economy continues to slow over the next year, according to industry experts.

“The occupancy outlook probably will allow rents to continue to grow, although at a pace a little under the increases recorded of late,” says Greg Willett, chief economist with RealPage Inc., a provider of property management software and services.

Developers continue to plan to open hundreds of thousands of new apartment units every year for the next few years. Overall, however, occupancy levels remain relatively high. An economic slowdown would cut into those occupancy rates, but not enough to dramatically impact rents. The exception would be new, luxury apartment projects, which might struggle to lease-up. The markets where new luxury development is concentrated may also struggle.

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    Top 10 Major Metros Increasing in Foreclosure Starts

    In October 2019, foreclosure filings climbed upward, increasing 13 percent from the previous month, according to ATTOM Data Solutions’ newly released October 2019 U.S. Foreclosure Activity Report.

    The report featured the rise of foreclosure completions (or REOs) in October, which reached the highest point in 2019. Lenders repossessed 13,484 U.S. properties through REOs in October, up 14 percent from the previous month.

    ATTOM’s October foreclosure report also noted that foreclosure starts increased monthly in 36 states. Lenders started the foreclosure process on 28,667 U.S. properties in October, up 17 percent from last month but down 1 percent from a year ago — the first double-digit month-over-month increase since February 2018.

    On the state level, states that saw double digit increases from last month included: Arizona (up 52 percent); Ohio (up 52 percent); Florida (up 48 percent); New Jersey (up 47 percent); and California (up 36 percent).

    On the other hand, 13 states including Washington, DC posted month-over-month decreases in foreclosure starts in October, including Maryland (down 42 percent); Idaho (down 36 percent); Delaware (down 32 percent); Nebraska (down 26 percent); and Utah (down 25 percent).

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      10 Tips to Growing Your Network and Building Relationships

      How many times have you heard someone say “it’s all about who you know”, or “it’s all politics anyways”? Probably quite a few times, and in a broad range of circumstances. While many people do all they can personally to be successful, all too often hard work and talent go unrewarded because someone’s nephew also happened to be going for the same job. Whether we like to admit it or not, favoritism is an omnipresent force in the world of business, politics, government, and any other situation where human beings are making decisions on behalf of an organization or group. This is likely to be the case for a long time, because as long as human beings are making decisions on behalf of companies, basic preference is going to play a role in making those decisions, whether consciously or not.

      This is why networking and relationship building is such a critical piece of success in today’s business environment. Failing to understand and build competency in networking and creating bonds with people is just as bad as neglecting one of the core functions of your job. With that in mind, we’ve put together a list of ten tips for networking and building relationships.

      Being intentional about networking and relationship building will serve you in many ways throughout your professional and personal life. Having a network of people who are willing to help you out however they can will be a resource like no other. Life is unpredictable, and you never know how a person might be able to help you out at some point down the road or how you may be able to help them as well. With that in mind lets take a look at ten ways to be better at networking and relationship building.

      Let’s start with networking. Networking is the actual act of generating new connections with strangers. It can be done at business events that are set up specifically for networking, or at your local restaurant. Good networkers are people who are adept at making connections, no matter where or when. Let’s take a look at some tips to getting started in meeting new people!

      1.) Get involved

      It’s difficult to increase the reach of your network if you spend time doing the same things, or nothing at all. One of the first things most people can do to become better at networking is simply to be more active in the community! People don’t always want to meet you in a business setting, ski clubs, fishing clubs, sports leagues and any other number of activities are a great way to grow your sphere of influence. When people get to see you in these settings, they can build trust and get to know you personally. Give people the opportunity to see you in a low pressure, informal setting and the opportunities for friendships will multiply quickly. Someone who is actively participating in groups within their community will make more connections in one year than others do in five, putting you ahead of the game and increasing the number of opportunities available to you.

      2.) Be interested

      One of the most common mistakes people make in networking is the way they approach making relationships. While this is an activity that can drive business, you don’t want to be overly directed or transactional when making new connections. When walking into a networking opportunity, seek to develop a few solid conversations rather than gather as many business cards as possible. People won’t remember the person who walked up to them and took the first opportunity to ask for their contact information, and if they do it won’t be fondly. Seek to gather conversations instead. Talk to people about themselves, who are they, what do they care about? This information will be much more valuable than a business card and will open a doorway to a potential long-term connection.

      One thing to keep in mind is that people are excellent at spotting someone who is not being authentic. Avoid coming across this way by asking questions and talking about things you care about. When people get to see you in your natural element, they get a chance to build a connection with you on a human level. This will make potential business relationships in the future that much easier.

      3.) Set and track goals

      One of the most important things you can do to increase your rate of success at just about anything is to be highly structured in how you set and track your goals. Keeping track of attempts and their outcome will serve you in two critical ways. On one hand, having solid information about your successes and failures will que you in on patterns that you may not notice otherwise. If your goal is to attend networking events in your area and generate clients from those events, you may notice after a few weeks that evening events tend to yield the highest results. Maybe Friday’s are your best day of the week because you’re the most relaxed and conversational. Measuring your success allows you to optimize for more of it!

      The second benefit of setting and tracking goals is increased awareness this will give you in the moment. When you know exactly how many people you need to speak to in order to generate one client (because you’ve been tracking those numbers) you will be more willing to go the extra mile to strike up one more conversation. Having the goal at the top of your mind while networking will make you that much more successful.

      4.) Cup of coffee

      Never underestimate the kindness of strangers. One of the most powerful tools in your belt as a networking professional is the cup of coffee. Identify people in your network who are outside of your reach. The owners of companies, established professionals, or that intimidating local attorney you see on billboards in your hometown. You may be surprised to find how open to helping these people are. Many times, people in at the top of the ladder got there due to a few hands down over the years. They will enjoy paying it back by offering the same opportunity to those who ask. Simply send a message over LinkedIn or call their office directly, tell them you have a great deal of respect for them and you would like to get their opinion on a few of the things you’re working on.

      Setting this meeting up as a chance to pick someone else’s brain will make them feel valued and respected. This is also a low pressure ask for a meeting. When you make it about asking them questions you remove much the fear that this is a sales pitch for something. Take advantage of this opportunity by asking them thoughtful questions about the industry your in. Don’t ask for another appointment, and don’t ask them for business. Ask them if its alright if you keep in touch. Congrats! You just developed a long-term mentorship relationship with a successful and connected member of your community. These are the kinds of relationships that can prove to be invaluable over the years.

      5.) Do what you love

      Have you ever become frustrated in your networking endeavors by the difference between work talk and everyday talk? Have you ever said something like “I don’t get it, when I’m at the baseball field I can always carry a conversation with anyone, but as soon as I get in a business setting, I freeze up”? If you’ve ever been concerned about this it may be because those business settings are unnatural! If you don’t get excited about cars, and you aren’t terribly interested or informed in this area, a muscle car convention may be a difficult venue for you to have success networking within. While it sounds cliché, its true. If you do what you love you’ll never have to work a day in your life.

      Doing what you love also makes you unconsciously competent at whatever your doing. You won’t be able to help but become an expert in your passion. This excitement and passion will come through in your conversations with people and you’ll find that when your doing what you love, people will actually seek you out as an authority on the subject. Keep this in mind when selecting networking opportunities. Is this going to give you an opportunity to showcase yourself in the best light? Or is there a better opportunity somewhere else out there?

      Developing Relationships

      So, let’s say you’ve taken some of the steps mentioned above and you’ve developed a few introductory conversations with new relationships. Now the real challenge begins. Making the connection is just the first step, anyone who is truly successful in building their network is competent at creating long term bonds with people. In that spirit, here are five tips to help you further develop relationships in your network.

      1.) Be kind

      This may seem obvious, but being gracious and friendly at all times really goes a long way. In the same way that you never know how a relationship can generate benefits for you in the future, you never know when someone you’ve offended will be in a position of power over you at some point down the line. Aside from avoiding this uncomfortable scenario, having a reputation as a nice person will make it easier to develop relationships with new connections and to grow established relationships. When someone has heard good things about you, they are much less leery of allowing you into their inner circle. When people know what to expect from you day in and day out as a kind and thoughtful person, they will be more willing to engage with you in the long term.

      2.) Be generous

      A bank representative attending a charity event for a local children’s hospital had his number called at a raffle. He won a TV! Rather than quietly accepting, or better yet, passing the free TV off to the children of the family sitting at the table next to him, he loudly exclaimed “I won! I already have all the rooms in the house covered so this baby is going in the garage for football!”

      This was a story I heard after setting an appointment with this banker hoping to create a referral relationship. As insignificant as this moment seemed to him, this unfortunate banker had rubbed many people the wrong way that night. The optics of the well-off banker who already has more flat screens than he needs gloating and bragging about his win was less than positive. It just so happened that my future manager would be sitting at the table next to him that night. That decision he made years ago to behave in a greedy fashion is still rippling negatively through his network years after the event.

      So spread the love! One of the most important factors someone considers when building a relationship with you is whether or not you care about others. More than just being kind to others, be generous to others. When a big sale is on the table, bring in one of the new members of the team. When you win something at a charity event, pay it forward and give it to someone who needs it more. Whatever you put out into the universe you will get back several fold. If you are unselfish and show people that you care about others and are willing to give to them, they’ll be much more likely to give to you in the future.

      3.) Create comradery

      One of the easiest ways to build relationships is to create comradery with people. There are many ways to do this, but they usually revolve around building a one on one, special connection with someone. Create a running joke that only the two of you are in on. Develop a nick name that you give to someone in your office (make sure it’s positive and they appreciate it). Singling someone out for individual attention let’s them know that you care about them on a personal level. You see them as an individual and you’re interested in building a relationship with them. You’d be surprised at how far simply individualizing your interactions with people goes. Don’t be the person who walks into a room and says the same thing to everyone. Canned “how are you?” conversations won’t be very emotionally compelling to someone. Seeing someone and asking them about their favorite sports team or playfully bringing up a success they’ve just had will stick with them.

      4.) Notice and appreciate

      Another key aspect to building lasting relationships is to show that you care. You should be looking for opportunities to applaud or identify individual efforts, noticing successes and commiserating with failures. This will help to put you in a person’s corner and show them that you take a personal stake in their success. At the end of the day, people just want to know that you respect and care about them. Make sure your actions, and words are geared towards building people up and treating them as individuals. Being a good listener also comes into play here. People take notice when you ask a thoughtful question about something, they said last week, these small gestures will build over time and will begin to tip someone from a prospect or a new connection into a friend.

      5.) Be Authentic

      This should go without saying, but when implementing anything suggested in this guide, make sure you’re doing it for the right reasons. As much as some of these tips and tricks can help you improve your reputation and networking abilities, nothing will hurt your reputation more than doing these things through a fake smile. Pretending to be interested in people for personal gain almost always comes through and will be a nearly impossible façade to keep up over time.  If that is the reputation you develop, it will become a serious headwind into your network building efforts. Not to mention the stress and work that being false in all of these interactions requires. When you are being yourself and authentically interested in people, you won’t be able to help but be interested in them and their success. If your faking it to personally benefit, that most likely will come through.

      After reading through these tips and tricks, we hope you picked up a few actionable pieces of advice. Bearing in mind that we should be networking to help ourselves by helping others, using these tips can supercharge your ability to take make connections and quickly expand your circle of influence. One important thing that we did not discuss is to manage these relationships over time. Take opportunities to reach out to old contacts and keep in touch with them. Letting your connections rust is just as bad as never making them at all!

      Investors Hit the Pause Button on CRE Debt Strategies

      Private equity investors allocated a lot of capital to CRE debt plays over the past few years. That trend has been slowing of late.

      Private equity real estate funds have stepped up to be a major source of financing for the commercial real estate industry—and a bigger allocation for investors. However, fund managers may face a tougher road ahead for fundraising in the near term as capital flows to the sector slow.

      Debt strategies have moved from the fringe to a more established and accepted part of the commercial real estate investment universe over the past several years. That shift has generated a significant wave of capital. According to London-based research firm Preqin, global private equity real estate debt funds have raised about $165.6 billion since 2013.

      “Over the last three years in particular we’ve seen a massive amount of capital allocated to debt funds,” says Todd Sammann, executive managing director and head of credit strategies at CBRE Global Investors. The vast majority of that capital is targeting double-digit returns and is almost entirely allocated to closed-end funds. “The industry has seen fundraising trail off a little bit in 2019, which is not particularly surprising given the amount of capital that was formed,” says Sammann.

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        Breaking Down CBRE’s 2020 Market Outlook

        CBRE provided NREI with an exclusive sneak peek at its 2020 Real Estate Market Outlook report.

        CBRE sees more growth ahead for the U.S. commercial real estate industry in 2020, although the pace of expansion could slow thanks to already strong fundamentals that will be tough to improve upon combined with some broader economic headwinds as part of its 2020 Real Estate Market Outlook. Specifically, uncertainty surrounding trade negotiations, weakness in manufacturing and the approach of the presidential election season will hang over the industry in 2020.

        Still, the report predicts a “very good year” for the industry.

        CBRE provided NREI an exclusive first look at the outlook report. Investment sales volumes should remain near peak levels and industry fundamentals in most sectors will remain strong as well, according to the forecast.

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          Multifamily rents gain 3.2%

          Occupancy has also been doing well

          Multifamily rent growth remained positive in October, a new report from YardiMatrix said.

          Multifamily rent increased by just $1, to $1,476. Year over year rent growth remained at 3.2%.

          Of the 30 major markets covered in the report, 17 saw year-over-year rent growth of at least 3.3%. San Jose and Houston remained below the 2.5% long-term average.

          Although the multifamily market boasts positive results, three states had bills passed to limit rent growth.

          Rent control affects the multifamily sector because it puts a chill on development during a period of low housing stock, YardiMatrix said.

          Although rent has topped historical growth levels, occupancy rates still remain strong.

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            Banker Warns of Exuberant Florida Developers

            Kessel Stelling, CEO of Synovus Financial, is concerned about lenders taking too much risk on construction loans.

            (Bloomberg)—A construction boom in Atlanta, Nashville and Orlando raises concern that some lenders may be taking on too much risk, Synovus Financial Corp.’s top executive said.

            “I still have some scars from the last crisis,” Kessel Stelling, chief executive officer since 2010, said in an interview at Bloomberg’s Atlanta office. “We lived to tell about it. I want to be sure we live to tell about it again.”

            Columbus, Georgia-based Synovus, which operates in five states, repaid $968 million in funds to the Treasury Department in 2013, becoming one of the last large banks to rid itself of the stigma of the Troubled Asset Relief Program in the wake of the 2007-2009 recession that brought the bank close to collapse.

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              The Looming Talent Gap in Property Management

              For millennial entrepreneurs, property management is the next hot job that no one’s heard of.

              Mrs. Woo was my first introduction to property managers. Back when I was fresh out of college, she’d knock on the door once a month for the rent check. When there was a leaky faucet or a tree that needed trimming, she’d call someone to fix it.

              For decades, I assumed that was what all property managers were like—somewhere between Mrs. Woo and Mr. Furley, the crotchety landlord on the ‘70s sitcom Three’s Company. But it turns out that my dated ideas had little to do with property management, especially today: It’s a profession that’s both highly in demand and evolving fast.

              Demand for property managers is set to spike by 10% in the years ahead as renting becomes a way of life for bigger chunks of the population. And as the renting population diversifies, so has the skill set required of property managers. Knocking on doors has given way to navigating software platforms. In place of wrangling renters for late checks, managers are finding themselves offering customized customer service to residents and owners alike.

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                Commercial and multifamily originations surge in Q3

                Strong market expected to continue into 2020

                Commercial and multifamily originations surged in the third quarter, the latest Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations from the Mortgage Bankers Association stated.

                Commercial and multifamily originations rose 24% from the third quarter of 2018 and 9% from the second quarter in the third quarter this year, the survey states.

                “Low interest rates are supporting strong levels of commercial and multifamily borrowing and lending,” said Jamie Woodwell, MBA vice president for commercial real estate research. “Through the third quarter, every major capital source is lending at a pace above last year’s level. Loans backed by multifamily and industrial properties, and made for life companies and Fannie Mae and Freddie Mac, are all running at a record pace.”

                And what’s more, this pace is expected to continue even into 2020.

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                  This Year Could Break a Record for Multifamily Sales Volume

                  In the first nine months of 2019, multifamily sales volume has been higher than during any other comparable period in the past 10 years.

                  Despite concerns about potentially slowing economic growth and new rent control laws around the country, investors continue to go after apartment properties.

                  The volume of U.S. multifamily acquisitions in the first nine months of 2019 was higher than during any other comparable period since this expansion cycle began a decade ago. In fact, this year might set a record for multifamily sales volume, says Alexis Maltin, manager of analytics with New York City-based research firm Real Capital Analytics (RCA). Investors spent $130.6 billion on multifamily acquisitions in the first three quarters of 2019, according to RCA.

                  Investors continue to be drawn to multifamily properties because of strong demand that has kept rents growing and occupancy levels well above 90 percent.

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