Category: Real Estate

Number of Coworking Spaces to Double or Triple Nationwide in the Next Five Years

The number of coworking and flexible workspace locations around the country is expected to double or triple within the next five years, despite a recent slowdown in growth in the market sector in the past year, according to a report from Colliers International.

Despite the recent curb in coworking companies opening locations, operators and landlords expect growth to restart in the near future, as more and more tenants look to give their employees additional options for working closer to home.

“Occupiers are largely shifting away from a traditionally fixed-portfolio composition to one that is more of a network-driven portfolio that provides workspaces to employees that span a spectrum of new settings,” said Francesco de Camilli, vice president of flexible workspace at Colliers and author of the report. “Flexible workspace is really a key component that is going to allow occupiers to unlock this strategy. It’s really costly and time-sensitive to build out traditional office space in small- to medium-sized markets, where you might have a couple of employees.”

And Colliers expects it won’t just be the major players like WeWork and Regus driving that growth. The report said it expects more and more landlords to start their own coworking platforms — which some like Tishman Speyer and the Durst Organization have already done — and the emergence of niche providers like a coworking space for cannabis companies.

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    BLACK KNIGHT’S FIRST LOOK AT OCTOBER 2020 MORTGAGE DATA

    Mortgage Delinquencies Decline for Fifth Consecutive Month in October; Record-Low Rates Push Prepayment Activity to 16-Year High

    • Mortgage delinquencies improved again in October, falling to 6.44%, the lowest level since March
    • Despite five consecutive months of improvement, there are still more than 3.4 million delinquent mortgages, nearly twice as many as there were entering the year
    • Serious delinquencies – loans 90 or more days past due – improved in October as well, but volumes remain at more than five times (+1.8 million) pre-pandemic levels
    • October’s 4,700 foreclosure starts marked a nearly 90% year-over-year reduction as widespread moratoriums remain in place, while active foreclosure inventory set yet another record low at 178,000
    • Record-low interest rates again pushed prepayment activity higher, with October’s prepayment rate of 3.17% setting the highest single-month mark in more than 16 years

    ACKSONVILLE, Fla. – November 23, 2020 – Black Knight, Inc. (NYSE:BKI) reports the following “first look” at October 2020 month-end mortgage performance statistics derived from its loan-level database representing approximately two thirds of the national mortgage market. Data is then extrapolated to reflect the entirety of the active mortgage universe.

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      The Opportunities and Challenges of Sourcing Deals in Today’s Environment

      CRE pros talk about how they are sourcing deals and investors as in-person meetings remain largely on hold.

      Less than two weeks before Thanksgiving, commercial real estate investment professionals James Simmons and Sonya Rocvil spoke as part of a six-person panel on investing, acquisitions and development during the Diversity in Commercial Real Estate Virtual Summit, organized by the Avant-Garde Network on Nov. 14.

      Rocvil, founder and principal of New York City-based Bedrock Real Estate Investors LLLC, which focuses on workforce housing, says the 10 virtual events where she’s spoken this year haven’t led to any deals yet. But she hopes they have set the table for possible acquisition and capital deals in 2021. At the moment, her firm’s portfolio comprises two multifamily properties in Georgia.

      Rocvil notes that the absence of face-to-face networking since the pandemic started has been challenging, but it hasn’t halted networking by phone and through electronic means. Speaking at virtual events has been effective in broadening Rocvil’s circle from her home turf of New York City to the rest of the country, she says. In addition, she’s been able to rekindle connections that may have been somewhat dormant prior to the pandemic.

      “We’re in an environment now where your level of exposure can be even more than it was in an in-person environment,” Rocvil says. “I’m definitely stepping outside my comfort zone, I have to say, but that’s how you grow.”

      Bedrock Real Estate Investors currently syndicates deals for multifamily properties, mainly through family and friends. But Rocvil hopes to attract family offices and high-net-worth individuals (HNWI) as investors.

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        Mortgage demand from homebuyers drops to lowest level in 6 months

        Mortgage applications to purchase a home fell 3% for the week and were 16% higher than a year ago.

        Another record low interest rate on the 30-year fixed mortgage last week did not help drag homebuyers out of their recent slump.

        Declining demand from buyers caused mortgage application volume to fall 0.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

        Mortgage applications to purchase a home fell 3% for the week and were 16% higher than a year ago. The annual comparison is now shrinking steadily.

        “The purchase market continued its recent slump, with the index decreasing for the sixth time in seven weeks to its lowest level since May 2020,” said Joel Kan, an MBA economist. “Inadequate housing supply is putting upward pressure on home prices and is impacting affordability — especially for first-time buyers and lower-income buyers.”

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          Renters Now a Majority in 23 Cities, Including Seattle

          Renters became a majority in 23 cities over the past decade even as ownership increased, according to a new study by Rent Café.

          “We looked at 10 years of U.S. Census housing data to determine where we stand now in terms of renter and owner population. Renting made significant gains in the last decade but dipped in the latter half, reaching a 7-year low in 2019. In the meantime, ownership rose to an all-time high, slowly rebounding after the great recession,” Rent Café said in the study.

          Renters took over 23 cities with more than 100,000 residents between 2010 and 2019. Established hotspots such as Seattle or up-and-comers like Memphis and Pittsburgh transitioned from an owner to a renter majority.
          In a surprising turn, Chicago, Sacramento, Reno, and Baltimore are among the 12 new owner-majority cities.
          Looking at the cities with the fastest-growing share of renter population, four of the top 10 cities are in Texas. Frisco and Plano are in the lead with a 41 percent and 59 percent change since 2010. On the other side, ownership gains were much smaller; Hartford, Conn. saw the largest increase in owner share, 27 percent.

          Renting made significant gains in the past decade but dipped in the last 5 years

          The renter population grew by eight million in the last decade, and is now 107 million strong.

          Specifically, renters currently make up 33.6 percent of the U.S. population — up from 33 percent in 2010. However, the latest numbers are far from the 2015 peak in renting, when 111 million Americans rented their homes for a 35.5 percent share. In fact, the number of renters reached a seven-year low at the end of the decade.

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            Apartment Investors Mull Opportunities in Distressed Malls

            Developers have proposed to redevelop more than a hundred malls into mixed-used properties with apartments.

            Apartment dealmakers may find an opportunity to build new apartments around the shells of under-performing or empty regional malls. Hundreds of troubled shopping malls may be seized by lenders over the next year, experts say.

            “In the current market with the pandemic, the number of properties considering this kind of redevelopment has multiplied three or four-fold,” says Brian McAuliffe, president of CBRE Capital Markets and leader of the firm’s multifamily sales business, working in the firms Chicago office.

            Regional malls, class-B and class-C shopping centers in deep trouble

            The pandemic has put tremendous pressure on many shopping malls. Hundreds have lost many of their largest, most important retail tenants as department store chains like J.C. Penney and Lord & Taylor declared bankruptcy and others scale back in the chaos caused by the coronavirus.

            The vast majority of class-B and class-C malls have lost at least one anchor tenant, according to research from Green Street Advisors. That adds up to several hundred properties that have lost a significant part of their income.

            Trepp has identified more than 100 properties that owners may soon surrender to lenders, more than a quarter of those are regional malls.

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              Multifamily Investors Plan to Add Value in the Pandemic

              One way for savvy investors to make deals pencil out in a tough market is target assets where strong management can generate some upside.

              Given current market conditions, some apartment investors are looking for a little something extra when they consider buying apartments.

              They have recently been able to close deals to buy apartment properties, despite the chaos caused the spread of the novel coronavirus. But to make these deals work, these investors often need a plan to add value to the property. Simply buying and holding an income-producing asset is not enough.

              Given current market conditions, some apartment investors are looking for a little something extra when they consider buying apartments.

              They have recently been able to close deals to buy apartment properties, despite the chaos caused the spread of the novel coronavirus. But to make these deals work, these investors often need a plan to add value to the property. Simply buying and holding an income-producing asset is not enough.

              That’s largely because of the risk of more job losses in the U.S. economy and an uncertain outlook on rent growth. Most buyers need some plan to raise the income from an apartment property to offset the risk of a slow economy.

              The plan to increase the income from an apartment community doesn’t have to include extensive renovations, extra amenities or higher rents. Many investors plan to improve the operations or management of apartment properties to create new value.

              “There is more downside risk than upside—buyers see that risk but also see some value-add,” says Sam Isaacson, president of Walker & Dunlop Investment Partners (WDIP), the investment management arm of Walker & Dunlop, managing three private equity funds that invests in multifamily properties.

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                HUD Charges Apartments with Discrimination Against Tenants Who Need Emotional Support Animals

                The U.S. Department of Housing and Urban Development (HUD) has charged a Philadelphia apartment owner with discriminating against a person with disabilities based on its refusal to waive pet fees for emotional support animals, according to a release.

                HUD is charging Post Presidential Property Owner, LLC, and Post Commercial Real Estate, LLC, the owner and manager respectively of Presidential City Apartments in Philadelphia, with disability discrimination.

                A tenant with a disability requiring an emotional support animal reached out to HUD alleging that she had been denied a reasonable accommodation to have pet fees waived at the apartments for such an animal.

                The Fair Housing Act prohibits housing discrimination based on disabilities, including denying reasonable-accommodation requests for the waiver of pet fees for assistance animals and rejecting requests for a designated handicapped parking space needed by a person with a disability.

                The complaint said “the tenant received an email from apartment’s counsel stating ‘a landlord is entitled to charge pet fees for an emotional support animal, which is considered a pet, unlike a service animal’.”

                Based upon this evidence, HUD recommended testing the subject property.

                The tests focused on reasonable accommodations relating to designated accessible parking and emotional-support animals for prospective tenants with disabilities.

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                  The 5 Best Ways to Deal with Rent Delinquencies Right Now

                  Landlords and tenants are facing rent delinquencies due to covid-19 so here are some thoughts to help from a veteran property manager.

                  By Justin Becker
                  Property Manager

                  There is no denying that right now, COVID-19 continues to affect the real-estate and rental market.

                  If you’re a property manager or landlord of a multifamily housing community or complex, navigating these waters for the last eight months has been somewhat challenging.

                  Nevertheless, with no real end in sight, mass unemployment, fluctuation in available job opportunities, and the ongoing pandemic, it is still very difficult for tenants to be able to pay their rent and still afford their other monthly expenses.

                  Working with tenants who are experiencing economic hardships due to COVID-19 has been par for the course for these last couple of months. Moreover, with most property managers’ and landlords’ hands being essentially tied in regard to legally dealing with late rent payments or lack of payments, it is not too surprising that people are starting to get creative by finding proactive ways to deal with rent delinquencies.

                  Other than being more flexible, many property managers are not sure what else they can do during these uncertain times. But the good news is that there is definitely more that can be done.

                  That said, here are the five best ways to deal with rent delinquencies right now.

                  No. 1: Build Proactive Partnerships

                  One of the best things you can do as a property manager right now is to collaborate with your tenants to ease the pressure and address financial hardships.

                  Obviously, open lines of communication are key here, and looking for a win-win solution to the problem makes everyone walk away from negotiations feeling a little better. A prime example of building proactive landlord-tenant partnerships is deferring a portion of rent and establishing a reasonable repayment plan.

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                    All Hail Amazon: Why E-Commerce is All Powerful in CRE

                    One hundred new warehouses. One thousand new delivery hubs. One hundred thousand jobs.

                    Amazon likes its numbers round, and it likes them in headlines. The e-commerce behemoth has been on a tear over the last several months, leasing, outfitting, and opening hundreds of millions of square feet across the country, in stark contrast to the general economic gloom.

                    Amazon opened 100 warehouses in September alone, in addition to the 100 distribution facilities and 1,000 neighborhood delivery hubs it leased, or plans to lease, in the near future.

                    It has more than 100 million square feet of planned space underway, and has ramped up its activity across the United States. These include at least six new warehouses in Georgia, four in the Atlanta area; at least seven distribution centers in Texas, near Dallas, Houston, Austin and El Paso; five scheduled to open in Arizona by December, doubling the number of its facilities in that state; and 12 in California.

                    Online sales have skyrocketed during the pandemic, so it’s no surprise that the
                    e-commerce king is a pandemic winner. In the process, Amazon is taking a lot of industrial real estate with it.

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