Category: Real Estate

Tackling Affordability Challenges

Here are five strategies for cities to bring more affordable apartments to market.

For many cities, the housing storyline remains unchanged: Demand for multifamily housing is far outpacing our industry’s ability to create supply.

The number of renter households grew from 35.7 million in 2000 to 43.8 million in 2016. During that period, the number of affordable apartments for low- and middle-income renters fell short of meeting demand by 1.2 million units. It will get worse if we can’t work with cities to do something about it. Research from Hoyt Advisory Services found the U.S. needs an average of 328,000 new apartment units annually to meet rising multifamily demand.

While affordability challenges are complex, local, regional, and state policymakers have alternatives to what we know are ineffective policies. Here are five things our industry needs to encourage cities to do to bring more affordable multifamily inventory to market.

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Foreign Investment in U.S. Commercial Property Drops Almost 50%

Deals involving foreign investment in U.S. commercial real estate totaled $16.9 billion in the first six months of 2019.

(Bloomberg)—Foreign investment in U.S. commercial real estate plunged in the first half of 2019 as signs of a global economic slowdown made buyers more cautious.

Deals totaled $16.9 billion, down from a record $32.7 billion in the same period last year, according to a report by CBRE Group Inc. Much of the decline was in spending on large mergers and acquisitions, which tumbled 83%, the brokerage said. Individual asset and portfolio sales fell 26%.

A Pause on Deals

The current slowing economy and uncertainty over where U.S. interest rates were headed have caused many overseas investors to hesitate on deals, according to Spencer Levy, chairman of Americas research for CBRE. That may change as buyers get more clarity.

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Self-Storage REITs Smell Acquisition Opportunity in Newly-Built Facilities

As newly developed self-storage properties face a tougher lease-up environment, REITs see potential acquisition bargains.

Self-storage REITs are ready to swoop in on an enticing source of acquisitions.

As the self-storage industry continues to contend with a glut of supply in many major markets, some developers are nervous. Why? Because they’re wrestling with slower than anticipated lease-ups at new self-storage facilities.

“The pro formas for these developers aren’t necessarily meeting expectations. That’s a nationwide phenomenon now,” says Marc Boorstein, principal with Chicago-based MJ Partners, a commercial real estate firm whose specialties include self-storage.

For at least some of the five major publicly-traded self-storage REITs, this translates into possible opportunities to buy newly-constructed properties at bargain prices at a time when the REITs have been curtailing their in-house development activity.

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Fannie-Freddie Fall as Trump Plan Shows Quick Windfall Unlikely

Treasury officials acknowledged their recommendations could take years to implement.

(Bloomberg)—The Trump Administration’s plan to release Fannie Mae and Freddie Mac from their government shackles laid out a vision that could eventually lead to hedge fund managers minting riches on their investments in the mortgage giants.

But the Treasury Department’s proposal left much to be ironed out, signaling there might not be a windfall unless President Donald Trump wins re-election in 2020. That sentiment was palpable on Wall Street Friday with Fannie and Freddie suffering their biggest one-day drops since January.

Treasury officials themselves acknowledged that their recommendations could take years to implement — a timetable that would extend beyond Trump’s first term. And the report, released late Thursday, left it to a politically divided Congress to handle some of the most sweeping changes.

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Low-Cost Luxury

Why it’s time to remove the price attached to creating a rich living space.

More than anything today, residents want to have rich experiences in the places they live. But they don’t want to break the bank to do it.

While luxury living has been featured in apartment communities for years, as the costs of land, entitlements and overall building materials continue to rise, developers are increasingly forced to make choices in the design and feel of their communities to stay on budget. At the same time, residents are pushing back against higher rents, even as they demand the same level of luxury today.

But by choosing from products like Peerless Faucet’s new design-oriented collections, multifamily designers and developers can create rich living experiences for their residents, without spending a fortune.

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How to Rent your Apartment on Craigslist in 2019

Intro: Today we’re going to show you how to create a Craigslist ad that gets:

  • Tons of clicks
  • Hundreds of calls
  • And thousands of inquiries

Let’s get to it!

Table of Contents:

  • Chapter 1 – How does Craigslist Work?
  • Chapter 2 – How to Post Your Apartment on Craigslist?
  • Chapter 3 – Craigslist Don’ts
  • Chapter 4 – Tips For a Complete Listing
  • Chapter 5 – Sample Titles
  • Chapter 6 – Craigslist Tools

Chapter 1 – How does Craigslist Work?

Not every search engine is as sophisticated as Google. The question is: How can you make the most of it? Craigslist is an online, classified ad website with various sections devoted to Housing, Jobs, Second-Hand Items, Roommates, Dating, and more. The website is completely free to use and is available to anyone willing to work within the company’s stated guidelines.

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The top 5 markets for multifamily rents

Only two large metros made the cut

The national average for cost of rent rose $3 in July from the prior month to $1,469 according to Yardi Matrix. That’s a gain of 3.4% from a year earlier, the real estate data firm said.

Yardi Matrix ranked the top five markets for multifamily rent growth, based on the percent change in rent growth.

These metros have two things in common: a solid job market and steady population growth.

No. 1 is Pensacola, Florida, with a whopping 9.1% change in rent from July 2018 to July 2019. According to Yardi Matrix, this metro has a healthy job sector, contributing to positive population growth. Developers are forecasted to complete more than 2,000 units this year. Rent increased to a record of $1,178 this July.

Wilmington, North Carolina came in No. 2, another metro with a strong job market and population growth. This metro climbed three spots, as it was ranked No. 5 in the first quarter report. Rent prices went up 8.1%.

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In Search of Yield, More Multifamily Investors Explore Affordable Housing, Smaller Markets

In a competitive market for multifamily acquisitions, more investors are looking at niche plays.

In late August, investment firm Starwood Capital Group bought 21 affordable housing properties in Florida and Texas containing a total of 4,448 apartment units. According to Mark Keatley, managing director at Starwood Capital, the firm is “confident this portfolio is well-positioned to deliver attractive risk-adjusted returns to our investors.”

That statement is particularly relevant today because many investors are having a hard time finding apartment properties that they can buy at prices low enough to give them an attractive risk-adjusted return. They continue to buy billions of dollars in U.S. apartment properties, however. To make these deals work, a growing number of investors are putting their money into higher-yielding property sub-types, including affordable housing and apartment properties in secondary and tertiary markets, according to Brian McAuliffe, president of capital markets with real estate services firm CBRE.

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Why Landlords and Property Managers Should Require Renters Insurance

A guide to renters’ insurance benefits, clauses, and leasing agreement language.

If someone told you there was a single paragraph you could add to your leases that could save you thousands of dollars and give you significantly greater peace of mind, you’d add it, right?

Well, there is: It’s a clause requiring tenants to carry renters insurance and showing you proof of an active policy. If you don’t already have such a clause in your leases, I recommend adding one as soon as you’re finished reading this article. Here’s a look at why requiring renters insurance is such a savvy move for landlords and property managers and how this policy can protect you.

How Renters Insurance Protects a Property Owner’s Investment

As most landlords and property managers know, the insurance they carry on their building does not cover their tenants’ belongings. But renters insurance goes beyond protecting furniture and clothing in case of damage.

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Starwood Capital Buys Thousands of Affordable Rental Apartments

The company bought 4,448 rental apartments in Texas and Florida.

(Bloomberg)—Starwood Capital Group, the investment firm led by billionaire Barry Sternlicht, is stepping up its investments in affordable apartments as demand for cheaper housing soars across the U.S.

The company bought 4,448 rental units mainly in the Dallas-Fort Worth area, in Houston and across Florida, Starwood said in a statement Monday. Terms weren’t disclosed.

The purchase gives Starwood and its affiliates a total of almost 20,700 units of affordable housing, “making us one of the top 10 largest owners in the United States,” Mark Keatley, managing director at Starwood, said in the statement.

(Bloomberg)—Starwood Capital Group, the investment firm led by billionaire Barry Sternlicht, is stepping up its investments in affordable apartments as demand for cheaper housing soars across the U.S.

The company bought 4,448 rental units mainly in the Dallas-Fort Worth area, in Houston and across Florida, Starwood said in a statement Monday. Terms weren’t disclosed.

The purchase gives Starwood and its affiliates a total of almost 20,700 units of affordable housing, “making us one of the top 10 largest owners in the United States,” Mark Keatley, managing director at Starwood, said in the statement.

The apartments, in 21 communities, are in metropolitan areas with expected economic and population growth over the next five years, according to brokerage CBRE Group Inc. Florida and Texas will probably attract new residents because they have a higher quality of life and lower cost of living compared with other U.S. markets, Starwood said.

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