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

Ivan Kaufman’s Real Estate Blog

Weekly Roundup Intro: Week of March 25, 2019

This week’s multifamily roundup takes a look at trends in vacancy rates, Class A apartments, and top amenities. First, Reuters reports that fewer U.S. metros saw their vacancy rate increase in the first quarter, while the national average only rose marginally from a year earlier. Next, RealPage observes that rent growth in Class A properties has begun to rebound after a few years of lagging behind Class B and C assets. Arbor’s Chatter blog analyzes renters’ living arrangements in small and large multifamily properties, with smaller buildings attracting more non-family households. Then, Curbed discusses the growing popularity among luxury developers of including high-end amenities at their projects, and what the impact has been on the market. Finally, Barron’s notes that while there are signs of a potential recession ahead, the commercial real estate industry should fare well due to its healthy fundamentals.

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U.S. Apartment Vacancy Rate Flat at 4.8 Percent in First Quarter: Reis

Reuters – March 28

“Far fewer metros saw a vacancy rate increase in the quarter: 15, down from 40 last quarter. Most of the increases were due to high construction that exceeded net absorption.”

Class A Makes a Comeback Nationwide

RealPage – March 26

“In early 2016, rent growth in the Class A stock fell below the increases in the nation’s Class B and C counterparts, and remained there until recently, when the expensive product line managed to pull itself out of the bottom rank.”

 Small Asset Multifamily Grows Share of Non-Family Households

Arbor Chatter – March 26

“Smaller multifamily properties have grown their share of non-family households. On the other hand, large properties are appealing most to married couples. The share of renters living with roommates continues to rise across all apartment property types.”

In the Apartment Amenity Arms Race, Service and Technology Win Out

Curbed – March 26

“Luxury apartments aren’t new. But today’s developers have elevated to an art form the practice of including amenities that pander to millennial lifestyle trends.”

A Recession May Be Coming, but Not for Commercial Real Estate Investors

Barron’s – March 25

“A detailed reading of the historical record indicates three types of excess that have preceded every recession and commercial real estate downturn: overbuilding, overheating, and over-indebtedness.”

 

Weekly Roundup Intro: Week of February 25, 2019

This week’s multifamily roundup takes a look at construction starts, the direction of cap rates and interest rates, and the markets attracting high-income renters. First, MultifamilyBiz reports that new construction activity picked up in January following the construction declines seen toward the end of 2018. Next, Nareit offers its outlook on the commercial real estate market by examining how cap rates and interest rates have moved over the last year. Arbor’s Chatter blog analyzes the Las Vegas apartment market, which saw the highest year-over-year rent growth in the U.S. last year, largely due to strong population growth and labor pool. Then, HousingWire breaks down HUD’s recently announced expansion of the FHA low-income housing tax credit financing program for multifamily assets. Finally, Apartment List reveals the top 10 cities for high-income renters, a rapidly growing segment of the rental population.

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Multifamily Housing Construction Starts Bounce Back Following Decline

MultifamilyBiz – February 27

“Multifamily housing bounced back 14% following its 15% December decline, and was up 1% compared to its average monthly pace during 2018.”

What’s Ahead for Cap Rates and Interest Rates?

Nareit – February 26

“Cap rates for most major property types continued to trend downward through 2018, and ended the year near or even below their lows a decade ago.”

Las Vegas Posts Highest Multifamily Rent Growth in U.S. in 2018

Arbor Chatter – February 26

“The Las Vegas multifamily market led the nation with the highest rent growth during 2018, driven by strong migration trends and a high concentration of prime-age workers.”

FHA Significantly Expands LIHTC Financing Program for Multifamily Properties

HousingWire – February 22

“According to HUD, the FHA’s expanded pilot program will ‘ensure faster and more efficient processing for low-risk, LIHTC transactions by eliminating redundant reviews.’”

Where Do Most High-Income Renters Live? Check Out the Top 10 Cities

Apartment List – February 22

“The number of households who earn six figures and choose to rent has grown 48% over the past decade, and now represents the fastest-growing segment of the housing population.”

 

Weekly Roundup Intro: Week of February 11, 2019

This week’s multifamily roundup takes a look at 2019 mortgage maturity volumes, small balance investment trends and interest rates’ impact on the apartment sector. First, MBA reports that loan maturities this year will rise 8% from last year’s total of $102.2 billion, which is a “relatively stable” volume. Next, MultifamilyBiz analyzes the top U.S. markets for new multifamily construction by dollar amount, finding that activity levels varied among the metros. Arbor’s Chatter blog offers its year-end 2018 report on the small balance multifamily market, noting that total lending volume was up 3.7% from the previous year. Then, Trepp observes that even if interest rates rise, the impact won’t be significant on the apartment industry, which has led all other sectors in price increases. Finally, Multifamily Executive reveals that Las Vegas, Phoenix and Atlanta had the strongest rent growth year-over-year, according to the latest monthly report from Yardi Matrix.

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2019 Commercial and Multifamily Mortgage Maturity Volumes to Increase 8 Percent

MBA – February 12

“The Mortgage Bankers Association said $110.5 billion (6 percent) of the $1.9 trillion in outstanding commercial and multifamily mortgages held by non-bank lenders and investors will mature in 2019.”

 Multifamily Construction Starts Showed Mixed Performance Across Top Metropolitan Areas in 2018

MultifamilyBiz – February 14

“Of the top ten markets, ranked by the dollar amount of construction starts, four reported greater activity in 2018 while six showed declines.”

Year-End 2018 Small Balance Multifamily Investment Trends Report

Arbor Chatter – February 7

“Despite significant pressure from rising interest rates through most of 2018, the small balance multifamily market ended the year strong, with consistent liquidity and borrowing capacity.”

Interest Rates Won’t Slow Down the Multifamily Market in 2019

Trepp – February 8

“If you look at transaction volumes and mortgage originations, multifamily continues to lead all commercial property types. At the end of the third quarter, multifamily prices were up 9% from a year earlier.”

National Rent Remains Flat, YOY Growth Rises to 3.3%

Multifamily Executive – February 12

“Las Vegas remains the strongest major market for rent growth on a YOY basis, at 7.9%, followed by Phoenix, at 6.5%, and Atlanta, at 5.9%. Each is at or approaching its cycle high for rent growth.”