News & Press

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

Life Insurance Companies Look for More Multifamily Investments

Life investors tend to favor existing, well-managed communities.

Life insurance companies and their affiliates like to finance and sometimes invest in multifamily projects. To find out about the appeal, challenges, and limitations of the various arrangements, Multifamily Executive caught up with Sean O’Connell of Securian Asset Management, who is affiliated with Minnesota Life and Securian Life. Securian Financial serves as a lender to multifamily owners and does not own any properties, but O’Connell responded to some questions about how the equity investment side works as well.

MFE: Why do life insurance companies invest in multifamily properties?
O’Connell:
The multifamily sector is one of four primary sectors that insurance companies target for their commercial mortgage investments. Others being office, industrial, and retail. Historically, the multifamily sector has had minimal defaults. The life insurance industry has long duration liabilities, hence long-term, fixed-rate loans are a good match for these liabilities. Some insurance companies invest in the space as equity investments, both for existing properties or new development.

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Looking at HUD’s New Financing Opportunity for Multifamily Investors

HUD has permanently relaxed its three-year rule for Section 223(f) mortgage refinancing applications.

On March 2nd, HUD relaxed its three-year rule for Section 223(f) refinancing mortgage loan applications.

The three-year rule required that properties be seasoned for three years from certificate of occupancy before being eligible for a HUD 223(f) mortgage loan application. HUD temporarily waived this rule during the recession from 2009 to 2013, but has now permanently changed the rule. Section 223(f) insures mortgage loans for the purchase or refinancing of existing multifamily properties.

We will need to see if HUD’s 2020 multifamily accelerated processing (MAP) guide affirms the approach. In the meantime, the just released Mortgagee Letter states that multifamily real estate investors now have the ability to apply for long-term HUD financing for multifamily properties without having to wait three years for the property to season. Under the relaxed rule, HUD offers borrowers the ability to secure permanent, non-recourse fixed rate debt at low interest rates.

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Foreign Investment in Multifamily Lower In 2019

Single asset deals from foreign investors increased last year.

A recent report by CBRE documents the level of foreign investment in U.S. multifamily properties and reveals a 27.3% drop in portfolio deals in 2019. Last year clocked in with a total of over $10 billion as compared with 2018, which was over $14 billion and off the charts.

The firm discounts the fall and instead points at a different and a more positive data point—the numbers for single asset deals as opposed to portfolio transactions. “For single-asset deals—a better measure of investment momentum because of less volatility from year to year—inbound capital increased by 3.8% to $6.1 billion,” per the report.

Most of the incoming money came from the usual suspect, Canada, which accounted for more than half of the inbound multifamily investment volume. Bahrain, Israel, the Netherlands, and the United Kingdom rounded out the top five.

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U.S. housing market is missing 3.3 million homes, Freddie Mac says

The shortage increases by about 300,000 a year as homebuilding lags

America’s housing market is undersupplied by 3.3 million units, and the shortage is getting worse every year, Freddie Mac said in a report on Friday.

“New housing supply is not keeping up with rising demand,” said Sam Khater, Freddie Mac’s chief economist, who said the shortage is increasing by about 300,000 units a year as homebuilders fail to keep up with demand.

Oregon is the most under-supplied state, followed by Colorado, Florida, and California, Khater said. The next two states are a bit of a surprise: Minnesota and Texas, where land shortages are not an issue.

“More than half of all states have a housing shortage, and the shortage is no longer concentrated in coastal markets but is spreading to the middle of the country in more affordable states like Texas and Minnesota,” Khater said.

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KKR’s Fast-Growing Warehouse Arm Lands $894 Million in New Debt

Alpha Industrial Properties secured a $690 million CMBS loan and a $204 facility from an affiliate of Invesco Ltd.

(Bloomberg)—KKR & Co. has refinanced its U.S. warehouse business, Alpha Industrial Properties, with $894 million in new debt.

KKR’s platform, which has made 40 acquisitions since May 2018, raised $690 million in commercial mortgage-backed securities in a transaction led by JPMorgan Chase & Co., according to Roger Morales, the firm’s head of commercial real estate acquisitions in the Americas. It also raised $204 million in a separate facility from an affiliate of Invesco Ltd.

“We have a lot of conviction in the sector’s drivers and expect to be significant investors in the asset class across a number of our real estate strategies,” Morales said in an interview.

Warehouses have become a hot asset as consumers increasingly embrace the convenience of e-commerce. Real estate-focused private equity funds have been vying with the largest real estate investment trusts for large portfolios of the properties.

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Branding Your Real Estate Business With Thought Leadership

Every establishment needs to be in touch with potential customers; this is not an exception with real estate investments. Branding thought leadership is essential to real estate dealings. This compilation aims to highlight the benefits of branding considered guidance in navigating the murky waters of the real estate world. Every outlet for business wants to offer that service which is irresistible to those who desire optimum and quality service delivery. Thought leadership in relation with real estate businesses aims to allow real estate service providers related to the problems faced by potential customers; it will enable customers to think highly of your brand and its uniqueness, highlighting the different issues faced and in conclusion setting apart your brand from other players in the field.  Ideally, all dealings in the real estate world solely involve surpassing your well thought out goals, and it consists of producing the results that, in the long run, positively affect your brand.  However, if you want to be a decisive leader, one whose opinions are defining on its own, if you desire to position yourself as a leading voice, by having a distinct brand. One of the best decisions to take in becoming a commercial real estate thought leader is to be consistent and continuously find ways to position your brand as being influential and authoritative.

This involves taking well thought out steps, calculated steps to be a thought leader in the widely acclaimed real estate leader. This is not one status that is attained in a day; it involves deliberate efforts to learn more about the field, creating a credible notion among your peers that you are conscious about this and you are well aware of all the implications and what it takes to be a real estate thought leader. There are many assured ways of doing this; but the most credible forms of gaining a voice in an already stifling industry is to be intentional about the steps you take; growing you and your team’s presence through reliable means such as education, research and long-lasting investment in the industry coupled with assured commitment to your immediate community.  Let’s paint a scenario where you already have a successful real estate outlet, a thriving brokerage business. At all, you are on this page because this is one of the dreams you want to achieve in no distant time. You already know your industry, and you have, through consistent efforts, defined your niche, and you also intend to help others grow in that geometric growth you have experienced. Now how would you go about this? How would go from just a business start-up owner, from one random innovative individual who has an outlet for the buying and selling of assets in the real estate world to the assured and proven expert on real estate matters; a trusted and assured source for consultations on issues of interest, one oozing stream of knowledge for those who dare to tap from this knowledge you possess.

How do you become a unifying voice of inspiration, a defining voice who is passionate about transforming ideas into reality and shapes the way others think about their industry? One particular way to go about this is simple; you work on it and with consistent efforts channeled in the right direction, you are really on your way to becoming what you so much desire. In line with the common saying that Rome was not built in a day, becoming a thought leader, a branding-thought leader in the real estate world is not a day’s job, and it merely does not happen overnight.  It is always the endpoint of determination, consistency, intention and diligence. But with a fast-developing global world, there are many routes you can take to get to that point; depending on you, these routes may even be faster than others. Here are some tested and assured ways you can attain your goal. There are three (3) critical steps to follow in your way to becoming an opinion leader in branding thought leadership. Some of these are:

  1. Take consistent and calculated steps to grow your audience:

Expanding the reach and increasing target audiences is one of the ways emerging businesses expand and drive home their influence. This is not one strange way for you, too, also become a leader in your chosen niche. This is seen as a natural extension of associating with similar industry experts and thought leaders. In linking with individuals or brands with similar aims and objectives, the same goals as yourself, then you are on your way to continue making your voice heard. In doing this, the audience of those you relate with would also become your audience. This is not one difficult thing to do, and it is not one rocket science. It is a typical move in the business world. Take for example, relating to a marketing firm committed to expanding the frontiers of the real estate world. By doing this, you can develop a reliable, loop-hole free strategy to aid your goal of becoming a voice to reckon with in the real estate world. Coupled with this, the use of website blogs, periodic newsletters, and in recent times the use of email marketing, will also further deepen your influence and expand your reach. This is even easier if you have a niche and drive conversion, and each time an individual or a prospective client reads any of the articles or clicks a related link, you have ultimately grown your audience even if it is by that one person.

One guaranteed way of expanding your influence is to be ready to participate in related speaking engagements. Do not turn down any chance to physically speak to like-minded people, to share your dreams with other participants in the industry. Such audiences will want to talk to you, they will want to interact with you and know more about the plans you have, they will ask questions, interactions will be done and in doing this, you will learn more and become an expert in your niche. When doing this, do not forget to record your meetings, these interactions, even take pictures and share on popular social media sites such as YouTube, Facebook and Instagram. By doing this, you can still interact with individuals who are not privy to these physical engagements but are also in the same real estate industry as yourself. Through these mediums, you can even answer other questions thrown at you. This way, you have killed two birds with one stone and you have succeeded in participating in both online and offline interactions. In all, the earlier mentioned mediums if well utilized, have the potential to build your image to the desired level in the industry.

  1. Endeavor to associate with the right people:

As with the common saying, like minds attract. Within professional settings, you should only interact with the right people. Those with which you share the same ideology; building a following among the groups you intend to serve is that which takes time but will yield the needed dividends in the long run. Forming valuable relationships like this is sure to help you with lead generation and drive conversion through the power of attraction rather than promotion, in line with industry experts. In your association with proven opinion leaders in the real estate, you have the opportunity of tapping into their reputation and the needed influence while also expanding your audience by association. In the long run, you will find it that these top opinion shakers will become your peer group within the industry. As it also the norm with other human associations, the people you relate with will tend to help you with your dreams as they would have found out that you share the same ideas and goals for the industry. They are more likely to recommend you to their contacts, their circle of influence as one trusted authority. Hence creating invaluable awareness for your establishment. You also do not have to be concerned if you are increasingly thinking that you are doing too much leaning. It is more like a symbiotic relationship as they also have much to gain by their association with you. As you are indirectly helping to further drive down their influence as a loud voice in the industry.

  1. Network, Network, and never stop Networking:

As it is often mentioned in public circles, the world is one global village. The internet and social networking apps and facilities have made linking of the chief director to that influential individual deep in the tropics of Africa possible. To become a leading voice in the real estate industry, deploying the use of social media should never escape your thoughts. Platforms such as LinkedIn, Twitter, Facebook, Instagram, and other similar social media applications have been known to help in further providing exposure for your startup. Platforms that have been implicated in the times past to be capable of influencing something as crucial as an election. Think about the possibilities and numerous advantages it can provide for your emerging firm. In the use of these platforms, the timing and placement of your links, observing the current trends and latching onto them can help to launch your brand into the public eye, further elevating your position as an emerging thought leader. Learn how to make use of search engine optimization, be on the lookout for rare opportunities than can help to grow your brand. Join reputable and assured platforms where you can list your properties. Platforms that show current market growth, which highlights your reach, shows its relevance and overall helps to position you as a business leader. In another guise, learn that becoming a voice to be reckoned with in the real estate industry is not a day job, its not something that happens suddenly, it is painstakingly done through consistent efforts; it is more like a marathon other than a brisk sprint. There is no reason to do all the above highlighted within a short time. Take your time to learn the ropes and work at your pace to achieve the lofty goal of becoming a branding thought leader in the real estate industry. You want others to acknowledge you as one with the experience, an expert, one that is worthy of listening to and solving related complex issues. This requires time; put the right effort and watch your circle of influence gradually increase.

Thought leadership is considered a very vital part of brand building. It is not an activity that can be done in a rush. Every business owner wants the brand to grow; we all want to achieve the geometric increase that has been panned out for our brand. According to industry experts, becoming a leading voice in the real estate industry requires you sampling the thought leadership template of established brands and think about how it can be applied to your establishment. What most of these top companies do is take ownership of the main issues that are responsible for driving forward the company. By owning these issues, they can effectively respond to dynamic marketplaces, and in doing this, they can redefine and lead in their respective industries. Thought leadership campaigns had been known to align with how world-class firms in the industry make use of marketing, build lasting influence and go through the extra work of delivering value to their numerous clients irrespective. Other tips by which you can become a thought leader in the real estate industry include; let it be known that these tips should be applied based on that which fully applies to your establishment. These tips are;

  • Creating a business blog: make use of a properly designed blog while offering trendy and valuable content to drive home your opinion. Gone are the days where blogs are dismissed as trivial and insignificant. Check the statistics of the proportion of the world’s population with an internet-enabled phone; then, you will get a grip on what we are trying to pass across.
  • Contribute guest blogs to other proven sites: This is also in line with you trying to grow your influence in the industry.
  • Write a column for your local newspaper
  • Create a vlog or podcast
  • Be internet savvy- answer questions on social media

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Rental prices in top housing markets fall in March

San Francisco remains the nation’s priciest rental market

Rental prices for one-bedroom and two-bedroom units fell in March, sliding by 0.4% and 0.3%, respectively, according to Zumper.

It now costs the average renter a median of $1,219 and $1,463 to rent the average one-bedroom and two-bedroom units. This equates to an annual increase of 0.2% and 0.6%, respectively.

Despite this growth, Zumper notes the nation’s top three rental markets including San Francisco, New York, and Boston, all experienced lackluster demand in March.

In San Francisco, renters saw their one-bedroom rental prices drop by 0.6% to $3,500, while two-bedroom rents grew 0.7% to $4,580.

New York renters also experienced some relief this month, as prices for one-bedrooms held steady at $3,320. Meanwhile, two bedrooms fell 1.5% to $3,320.

Rent for one-bedroom units in Boston remained stagnant at $3,000, although prices for two-bedroom units declined by 1.5% to $3,320.

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Multifamily Sector Battles Against Rising Rent Control Movement

Here’s why it matters for housing across the board.

For too long housing affordability has been falsely seen as an industry problem. But in recent years, it’s taken on such an epic scale that local communities and governments are taking more aggressive steps than ever before.

Nearly one-third (31.5%) of all U.S. households are housing cost burdened, spending more than 30% of their income on housing, according to Harvard’s Joint Center for Housing Studies. That’s 37.8 million households who are spending more than they should on housing.

The situation is particularly bad for the rental side of the housing market. While 22.5% of homeowners are cost burdened, 47.4% of renter households are. That renter share rises to almost 60% for those households considered severely cost burdened, paying more than half of their income on housing. And it’s not just the poorest who are struggling; the crisis has spread to the middle class as well.

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If a Bank Branch Has to Close, What Are the Most Likely Reuse Scenarios?

As banks downsize their bricks-and-mortar footprint, their vacated spaces can be turned to other uses.

Banks continue to shutdown branches across the country, but investors see creative reuse opportunities for these locations.

The typical closed branch encompasses around 8,000 to 14,000 sq. ft. of space, with some branches reaching up to 25,000 sq. ft. or 35,000 sq. ft., says Walter Bialas, vice president of research with real estate services firm JLL. This is where creative reuse of space comes into play.

“Take a 25,000 square foot outparcel, for example,” says Bialas. “With larger retailers under pressure and limited growth in that sector, you have to match a user with the space. Even many restaurants are not this large, so it becomes a challenge to lease or sell the space and maybe develop a plan to divide the space for multiple users, which is why office type users often fit the best.”

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Affordable Housing Lenders Anticipate 2020 Growth

Citi Community Capital remains on top of AHF’s annual ranking of construction and permanent lending volume.

With the high demand for affordable and workforce housing across the nation, lenders’ volumes were robust in 2019, with anticipated continued growth in the year ahead. According to a survey by sister publication Affordable Housing Finance, the AHF Top 25 affordable housing lenders provided over $41 billion in permanent and construction loans to developments that serve up to 80% of the area median income in 2019. This is up from the AHF Top 25 lenders’ $35.2 billion in 2018 and $30.5 billion in 2017.

Citi Community Capital remains at the top of our lender list, having lent almost $6.1 billion to affordable properties in 2019. That is down from the almost $7 billion in 2018.

“2019 was a surprisingly strong year. We went into 2019 thinking that interest rates would rise and that it would be more difficult for some projects to pencil,” says Richard Gerwitz, co-head of Citi Community Capital. “But not only was that not the case, but as the year went on, it became increasingly apparent that private-activity bond allocation was going to run out in a few more states, driving some developers to advance their projects. As a result, the last months of the year were even busier than they usually are.”

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