Ivan Kaufman’s Blog 2017-07-19T16:32:21+00:00

Ivan Kaufman’s Real Estate Blog

Weekly Roundup: Friday, April 20th, 2018

This week’s industry updates consist of value-add strategies, the rising interest in class B properties and what the slowing apartment boom means for rent projections. MBA begins by highlighting key takeaways with a video with Jamie Woodwell, Vice President of Commercial/Multifamily Research and Economics, on the multifamily market outlook. Then NREI explores how value-add strategies have grown in demand, but aren’t generating the same rent growth that they once promised. Next, Arbor’s Chatter blog states that while incomes are rising, affordability still needs to be improved given the fact that no renter group is spending less than a third of their income on housing. Multifamily Executive explores some of the perks of investing in Class B properties. Finally, MarketWatch asserts that as the market continues to absorb new development well, rents will continue to rise.

apartment-building- photo

MBANow: MBA Vice President Jamie Woodwell on 2018 Commercial/Multifamily Outlook
Mortgage Bankers Association – April 19
“We had solid property fundamentals; we had increasing property values; we had low interest rates; and we had ample supply of capital.”

Competition Intensifies for Value-Add Assets
NREI – April 17
“As yields get lower and lower, traditional buyers of core assets are more and more looking elsewhere.”

With Rising Incomes, Renter Cost Burden Shows Slight Improvement for Now

Arbor Chatter – April 20
“While rental housing costs remain high, the accelerated improvements in the U.S. economy have resulted in incomes that are beginning to grow slightly faster than rents.”

Positioning Class B as a Lucrative Value Alternative
Multifamily Executive – April 17
“With rents flattening in Class A core markets, many investors are looking elsewhere for assets other than new construction.”

That Apartment Building Boom Is Slowing — So Rent Is About To Accelerate
MarketWatch – April 11
“The pipeline of new projects appears to have peaked and the rental market has been able to absorb this decade-high pace of new supply without a significant increase in vacancy rates.”

Weekly Roundup: Friday, April 13th, 2018

The growth of secondary markets and single-family rentals are explored in this week’s industry trends. First, NREI examines how as rents continue to rise, investors are gaining interest in small properties in smaller markets. Also from NREI, we have a piece that tracks the increasing number of single-family rentals across the U.S. by market and risk-return. Pensions & Investments asserts that more millennials are being drawn to secondary markets as they seek a lower cost of living, shorter commutes and a better work-life balance. Next, MBA reports that multifamily properties saw the highest volume of mortgage bankers’ origination volume. We close things off with a piece from Multifamily Executive that provides a breakdown of the fastest growing cities for single-family rentals.

town-aerial-view

Prices Keep Rising for Apartment Properties, Forcing Investors into Smaller Markets
NREI – April 10
“Investors keep looking for apartment buildings to buy at good prices. The search is leading them to smaller properties in smaller markets.”

Top SFR Growth Markets for 2018

NREI – April 11
“Analyzing single family rental returns in 449 U.S. counties with a population of at least 100,000, ATTOM Data Solutions has ranked the top growth markets for SFR rentals.”

The Demographics Driving Real Estate Investments In Non-Gateway Cities

Pensions & Investments – April 10
“Data shows the population growth of millennials in non-gateway (secondary) markets has exceeded gateway markets with the trend expected to continue through 2022.”

Mortgage Bankers Close Record $530B in 2017 Commercial/Multifamily Originations
Mortgage Bankers Association – April 12
“2017 was a very strong year, driven by solid property fundamentals, rising property values, low interest rates and a ready supply of mortgage capital all contributing to extraordinarily attractive finance markets.”

Single-Family Rentals Outpace Apartment Rentals in 22 of 30 Largest US Cities
Multifamily Executive – April 11
“This rise in linear living, caused by the inability to attain homeownership for many of today’s residents after the housing market crash, has been more drastic in some markets than others.”

 

Weekly Roundup: Friday, April 6th, 2018

This week’s selection of multifamily news highlights takes a closer look at the growth of green mortgages, millennial renting trends and a summary of major shifts in the CRE market. First, Fannie Mae states that the number of Leadership in Energy and Environmental Design (LEED) certified apartments have multiplied by more than 13 times since the introduction of the Fannie’s first Green Mortgage Loan in 2012. Then, Freddie Mac explores a driving a surge in renting across all generational cohorts. Arbor’s Chatter blog examines the concentration of millennial demand across the U.S., narrowing in on smaller metros. Next, Bloomberg View suggests that Millennials don’t need those new luxury towers and that urban cores may be overbuiltMBA reports that the 4Q 2017 Commercial/Multifamily DataBook suggests continued stability for the sector.

outside-brick-apartment

Green Mortgages Are Gaining Acceptance with Multifamily Developers and Lenders
Fannie Mae – April 4
“The number of LEED apartments being built per year has increased by more than 13 times in just the last nine years, when LEED-certification was first used by the multifamily sector.”

New Research Finds Increasing Preference for Renting
Freddie Mac – April 4
“The spring “Profile of Today’s Renter” finds a total of 67 percent of renters view renting as more affordable than owning a home, including 73 percent of Baby Boomers (aged 53-71).”

Metro-Level Snapshot: Where are Millennials Concentrated in Small Rental Properties? 
Arbor Chatter – April 6
“One way to look at the drivers for Millennial demand across US metros is to consider their concentration.”

Those Shiny New Apartments Aren’t What Millennials Need
Bloomberg – April 3
Brookings says that 2012 was the peak of the “back to the city” movement. Urban core population growth is trailing off, and exurban population growth is surging.”

MBA 4Q Commercial/Multifamily DataBook Reports CRE Stability
Mortgage Bankers Association – April 5
“Commercial real estate rents and vacancies held relatively steady during the quarter and interest rates were relatively stable. New construction of CRE assets appears to have largely plateaued.”