News & Press

Below are press releases announcing; acquisitions, divestitures and industry news.

Libor’s Likely Reprieve Is a Welcome Acknowledgment of Reality: Mark Gilbert

The financial industry has failed to embrace any potential replacements for the benchmark.

(Bloomberg Opinion)—The overseers of three-month dollar Libor are considering a stay of execution for the benchmark interest rate for trillions of dollars’ worth of securities that was scheduled to expire at the end of next year. It’s a welcome acknowledgment of the reality that the financial industry has failed to embrace any potential replacements for the suite of interest rates once dubbed the world’s most important numbers.

The London interbank offered rates dictate the pricing of everything from mortgages to corporate loans to derivatives contracts, across a range of maturities and currencies. But they’re flawed: The wholesale interbank lending market on which they were based dried up in the wake of the global financial crisis, while many of the banks responsible for setting their values have paid billions of dollars in fines for rigging the benchmarks in their own favor.

So market regulators have proposed alternatives, including the Secured Overnight Financing Rate in dollars and the Sterling Overnight Interbank Average Rate in U.K. markets. But adoption has been slow, particularly in the U.S. market. For example, in the week ended Nov. 20 almost $2.5 trillion of dollar interest-rate swaps tied to Libor were traded, compared with just $70.5 billion contracts that referenced SOFR, according to figures compiled by the International Swaps and Derivatives Association. So far this year, $96 trillion of Libor swaps outstrip the $1.8 trillion of SOFR trades.

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    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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        How to Increase Your Rental Property’s Net Income

        If you currently own a rental property, and your revenue is covering your expenses with a little extra to put in the bank, that’s awesome! But what if you could bank even more each month by simply thinking outside the box? What if you could increase your net revenue to double what it is right now?
        Would you be interested in that?
        There are so many ways to add value for your tenants that they would be willing to pay extra for. You can also get creative and utilize your property to create more income in other ways. All it takes is a little creativity and looking at things in a different way.

        Rent Parking Spots

        If you own a property in an area where parking is a high commodity, this is a no-brainer. Whether you’re in the city where people have to search for parking, or you’re close to a sports or music venue, you can cash in on it. And don’t worry, you can take care of your tenants, too!
        Let’s say you own a single family home near a football stadium. If there is enough grass, a large driveway or otherwise, you can use that space and sell parking spots for a premium to the fans who are attending the event. All it takes is a sign with your price on it and someone to collect the cash and direct the cars to the right spots.
        You can make this an attractive deal for your tenant, as well. Obviously, you need to ensure that they still have space to park during the events. After that, you can offer a portion of the profits to them, waive one month of rent, or any other offer that they might accept.
        The key is to make it a win-win for both of you. If you’re both making money off the deal and it doesn’t destroy the property, go for it!

        Rent Extra Storage Space

        It should come as no surprise that people LOVE their stuff, and that some take it to an extreme level to the point that they can’t fit everything in their home. This can be a major advantage for you if you choose use the opportunity as a money-making venture. The major concern is whether or not you have the space to rent out.
        Renting additional space works really well when you own a multi-family property. The living spaces are likely smaller than in a single family home, which means people will be looking for extra space to store their things. You can sell storage space to them in garages, attics, basements or extra units in the building. If you’re super savvy, you can make it a goal to own a multi-family property and a storage building that are next door, or in close proximity to one another.
        If you own a single family home, it can be a little more complicated, unless you have another spot nearby. This works really well when you’re renting a carriage house, an apartment over your garage or a mother-in-law suite. These situations almost always have a larger house connected or on the same property, which gives you the opportunity to rent additional space.

        Install Solar Panels

        This might seem like an odd one, but you really can make it work to your advantage. Installing solar panels on the roof of your rental property can be a major cash cow for you. You need to first do the research on whether or not it’s a good investment for you by considering the amount of time it will take to recoup the cost and how old the roof is at the time of installation.
        Once you decide that it’s a good investment, you can get it done and start making some extra money. There are multiple ways to accomplish the same thing, too.

        Include Electricity in the Rent

        One option is to install the solar panels and then increase the price of rent to include electricity. You then ultimately become the utility, and your tenants will pay you instead of the electric company. Whether it’s a single or multi-family establishment, you are likely to create enough energy to cover everything that is being used and have some left over.

        Sell Additional Energy Back to the Grid

        Since power grids are becoming smarter and smarter, many of them now offer a two-way transfer. This means that if you have excess power after running all the necessary electricity at your property for the month, you can sell the rest back to the grid. This is not an option that you would do “instead of” selling to tenants. It would be “in addition to”.
        There are more than 40 states in the U.S. that allow this type of transfer. It’s called “net metering”. Not only will you receive a check from the power company for the excess energy, you can also get some great tax benefits, as well. Start by checking with the power company in your area to find out if this is an option for you.

        Offer Consumer Services to Your Tenants

        Many people are willing to pay for convenient, time-saving services in and around their homes. Depending on the expendable income of the tenants in your property, this could be a really creative and smart way to generate more income. Think about all the different services that you, your family and friends use on a regular basis. Can you recreate them?
        Each of the following is an example of a service that you could offer to your tenants for an additional fee. You can choose to offer them a la cart, or as a package deal. You can also include them in the rent, or have your tenants pay separately. Either way, it’s worth considering!

        Lawn Car Services

        Offering lawn services like grass cutting, tree trimming, gardening, wedding, fertilizing and more is a great place to start. There are tons of people who don’t have the time or the desire to do these sorts of jobs around their homes. If you have the ability to do it yourself or to sub-contract it out, it’s definitely worth considering.

        Cleaning Services

        This is another really great option to not only serve your tenants, but to generate additional revenue for your business. Consider the cost of doing it yourself versus hiring a company to do it and conduct a basic ROI evaluation. If the numbers look good, give it a try and see how it goes.

        Dry-Cleaning Services

        If you really want to go above and beyond, you can partner with a local dry cleaner to offer a pick-up and drop-off service for your tenants. In this scenario, your tenants could leave their dry-cleaning on the front door for the cleaner (or you) to come pick it up. Once it’s done, it is delivered back to their door. This is a convenient way to do additional business with your tenants and they will appreciate it, as well.

        Grocery Delivery

        Think about all the apps and grocery stores that offer this service! Can you find a local business who is currently doing it, or setup one for yourself and hire someone to do it? It might take a little more setup time to get this to work, but it’s definitely an option worth exploring. Home grocery delivery is a rapidly growing service that you could cash in on.

        Dog Walking

        Although there are lots of dog-walking apps and services on the market, your tenants are likely to trust whoever you recommend for these types of things. You can offer dog-walking on a daily basis, as well as pet-sitting when your tenants go on vacation. This allows the pet to stay comfortable at home, rather than being boarded at a kennel and gives the tenant peace-of-mind that their furry friend is well taken care of.

        Baby Sitting

        If you have a really great relationship with your tenants, they might even trust your recommendation on who should watch their kids. Whether it’s your own teenagers who are looking to make some cash, or you hire a contractor to do it, this is another excellent service. Parents are always looking for a great babysitter to take care of the kids while they take a night off. And who better to help them with it than you?

        Less Creative Options

        Obviously, all of the options listed above will take some due diligence, planning and potential bargaining with local service providers. If that’s not something you’re interested in doing, there are other ways to ensure you are making top dollar for each property you own.

        Refinance When It Makes Sense

        This is one of the best ways to increase your net income each month. We all know that the market fluctuates on a regular basis. We go through periods where interest rates are through the roof and others where they are amazingly low.
        If you really stay on top of the market and what it’s doing, you’ll be in a great place to refinance at just the right time. If you get a great deal and don’t spend a ton on closing costs and other fees, you can really improve your revenue situation substantially.
        It’s really helpful to shop it on an annual basis, too. Just like car insurance and other such necessities, many people become complacent and just pay their premiums year after year without ever shopping around. Be smart about it and always be on the lookout for what might be the right option.
        A great way to accomplish this is to start by finding a lender whom you trust. If you have a lender or an advisor who can help you identify the right time to refinance, that’s worth its weight in gold. Ask them to reach out to you when the market is primed for great refinancing deals. Don’t worry – you’re not an inconvenience. I promise you, they have a list of prospects to call when the market is at just the right spot.

        Investigate Tax Benefits

        This is another area where many investors are under informed and don’t get the full tax benefit of their properties. We don’t recommend trying to figure this out on your own unless you’re a tax professional. But we DO recommend looking in to the matter by contacting a tax professional and discussing all of the options.
        More often than not, investors will learn about additional tax benefits they didn’t know they had. These can be the result of renovations that you made to the property, energy-efficiencies that you added but didn’t realize you could get a break for, and so on. Your best bet is to keep really good track of all the improvements and investments you make to the property. Then share those with your tax advisor every year when you file your taxes. You’ll be amazed what is possible.

        Conclusion

        The key to all of this is just learning to think outside the box. Don’t get complacent as an investor and think that the monthly rent from your tenants is your only opportunity. The sky is the limit when it comes to offering additional services and amenities that your tenants might be willing to pay for.
        Always do the research on the potential ROI, the costs associated with the service or services you want to offer and what type of insurance may or may not be necessary. If you think insurance will be necessary for the service you want to offer, bid that out, as well. Go into the decision with as much information as possible for optimal results.
        Hopefully, this article has sparked some ideas for you. As an investor, you are the CEO of your real estate business and you get to call the shots. The more creative and forward-thinking you can be, the better. Not only will you be able to make more money from your rental properties, but your tenants will have the pleasure of convenient services that are offered from the same person they trust – YOU!
        Image: Pixabay

        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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