Category: Market Reports

Berkadia outlook: Multifamily stays strong in 2020

Posted on by Sarah

The mortgage banking and investment sales pros with Berkadia expect the multifamily sector to remain a strong one throughout 2020. But what could bring at least a minor hiccup to the sector? Interest rates and the presidential election. That’s according to Berkadia’s 2020 Outlook Powerhouse Poll, a collection of insights from more than 150 Berkadia investment sales brokers and mortgage bankers across 60 offices. According to the poll, investment sales brokers and mortgage bankers expect interest rates and the presidential election to have the greatest impact on multifamily investing and financing this year. A total of 86 percent of bankers cited interest rates in the study, while 44 percent pointed to the election. Rounding out the top three expected major trends, 44 percent of bankers cited GSE reform. For trends impacting multifamily investing, 77 percent of investment sales brokers cited interest rates, 63 percent the presidential election and 40 percent debt underwriting. The survey found, too, that 91 percent of mortgage bankers expect GSEs to see the most activity in 2020. Click to read more at www.rejournals.com.

Austin outranks major West Coast city in new projection of office job growth

Posted on by Sarah

It’s Bat City versus the City by the Bay in a new projection for the growth of office jobs in 2020. Commercial real estate services company CBRE predicts Austin will see a 2.6 percent rise in office jobs this year compared with last year. That puts Austin in first place for anticipated office-job growth in 2020 among U.S. markets with at least 37.5 million square feet of office space. Office jobs include those in the tech, professional services, and legal sectors. Austin edges out San Francisco for the top spot in CBRE’s forecast, published January 9. The company predicts a 2.5 percent increase in San Francisco office jobs this year versus last year. Personal finance website WalletHub recently ranked San Francisco and Austin third and fourth, respectively, on its list of the U.S. best cities to find a job. “It’s not surprising that the forecast for Austin is extremely bright, and we expect that technology companies and professional firms will still drive the demand for more [offices],” Troy Holme, executive vice president in the Austin office of CBRE, says in a January 22 release. Click to read more at www.austinculturemap.com.

Commercial/Multifamily Mortgage Debt Increased $75.7 Billion in the Third Quarter of 2019

Posted on by Sarah

WASHINGTON, D.C. (December 19, 2019) – The level of commercial/multifamily mortgage debt outstanding rose by $75.7 billion (2.2 percent) in the third quarter of 2019, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. Total commercial/multifamily debt outstanding rose to $3.59 trillion at the end of the third quarter. Multifamily mortgage debt alone increased $40.6 billion (2.8 percent) to $1.5 trillion from the second quarter. “Strong property markets, low interest rates and low mortgage delinquencies continue to draw more capital to commercial and multifamily mortgages,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Every major capital source increased their holdings of commercial real estate debt during the third quarter, led by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). The growth of investor-driven lenders is also evident, with mortgage REITs on pace to soon become the fifth largest source of capital for commercial and multifamily mortgages.” The four major investor groups are: banks and thrifts; federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS); life insurance companies; and commercial mortgage backed securities (CMBS), collateralized debt obligation (CDO), and other asset backed securities (ABS) issues. Click to read more at www.mba.org.

The One Best REIT To Own In 2020

Posted on by Sarah

As my regular readers know, I am a huge proponent of diversification, as I consider it one of the best ways to sleep well at night. However, as we roll into the New Year, I am fielding requests from readers inquiring about the best REIT to own in 2020. So, while I purposely fulfill that request, I must provide the following disclosure, and that is that one of the best ways to mitigate risk is to carefully diversify your portfolio. By diversifying, you provide yourself with insurance that if one stock blows up, it will not severely impact your nest egg. Digital Realty: A Data Center REIT To Own For Decades Digital Realty (DLR) is one of the oldest data center REITs in the world, having gone public in 2004 and as of Q3-19 owned 211 data centers in 35 cities across 14 countries. The company has global exposure represented in North America (77%), Europe (13%), Asia Pacific (7%) and Latin America (3%). Click to read more at www.forbes.com.

Opportunity Zone Outlook: Expert Craig Bernstein Outlines His Expectations or The Program’s Future

Posted on by Sarah

As this article goes to press, the clock is ticking on two of the first significant deadlines connected to Opportunity Zones. The countdown is on to Dec. 31.
“The first issue is the 15-percent step-up in basis, which effectively gives you a 15-percent discount on your initial Capital Gains taxes that would be
due in December 2026. An example would be the sale of Netflix stock,” explains Craig Bernstein, Principal and Chief Investment Officer at OPZ
Bernstein, a Washington, D.C.-based real estate private equity fund that specializes in Qualified Opportunity Zone fund investments (“QOF”). That step-up in basis is a huge selling point of the Opportunity Zone program, created by the 2017 Tax Cuts and Jobs Act. By reinvesting Capital Gains in Qualified Opportunity Zone funds, investors are able to defer, reduce and, in some cases, eliminate any Long-Term Capital Gains taxes on the Opportunity Zone Fund investment. Click to read more at www.rednews.com.

WeWork Considers Cutting Its Share Offering By Half, No Word Yet On Delaying Anticipated IPO

Posted on by Sarah

Topline: WeWork parent firm We Co is considering slashing its share offering by half, which could take the company’s valuation to $20 billion in its anticipated IPO and far below the $47 billion that the fast-growing real estate firm, with hundreds of office-sharing spaces worldwide, was valued at in January.

  • According to reports, the company’s financial advisors could seek a valuation of $20 billion to $30 billion in its initial public offering. It is not yet known whether We Co will advance with its IPO this month as planned following its filing in August, or delay it.
  • Concerns around corporate governance and the nine-year-old firm’s business model have been previously raised, including founder and CEO Adam Neumann borrowing millions of dollars from the firm at a low interest rate, to buy property for WeWork to lease. Click to read more at www.forbes.com.