Commercial Real Estate Lending

Commercial real estate financing

Banks and alternative lenders are not shying away from commercial real estate debt in the tail end of this cycle. Flickr/401(K) 2012 Lending continued to climb moderately in the second quarter, thanks in part to a large jump in commercial mortgaged-backed securities debt. Capital markets remain favorable, pushing lending volume up across all major groups, CBRE reports. CMBS issuance jumped in Q2 to $38.8B year-to-date, well above the $30.7B in CMBS debt issued at the same period last year. “The overall lending environment is well supplied with debt capital from all sources; CMBS, life companies, banks and alternative lenders are all actively issuing bridge and permanent financing quotes,” CBRE Capital Markets Global President Brian Stoffers said in a statement. “The recent surge in CMBS mortgages demonstrated that these lenders are becoming increasingly comfortable with risk-retention rules that kicked in at the end of last year.”

Read entire article here in Bisnow.com

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CMBS Mortgages Lead Expansion of Commercial Lending in U.S.

According to CBRE, commercial real estate lending in the U.S. continued to grow in Q2 2017, led by a surge in CMBS mortgages.

Despite an increase in short-term interest rates by the Federal Reserve in June, capital markets remained favorable in Q2 2017, with rising equity prices, tight spreads and limited volatility.

The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, shows that loan closings edged higher between March and June, and are 27% above the year-earlier level. Volume improved across all major lending groups, as capital is readily available, with CMBS conduits leading all other lenders in terms of market share.

Reflecting the favorable capital market environment, CMBS issuance revived in Q2 2017, lifting year-to-date issuance to $38.8 billion and well ahead of 2016’s pace of $30.7 billion. CMBS conduits accounted for 36% of non-agency origination activity in Q2 2017, well above their 16% market share in Q1 2017 and 10% market share a year earlier. While the increase included a large Manhattan office loan in Q2 2017, it generally reflects stronger industry wide CMBS origination volumes.

View entire article here in National Real Estate Investor

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Five Considerations to Help You Make a Successful Real Estate Investment Decision

 

Envision the following scenario.You’re in the process of selecting a new location for your retail business. Your broker has just shown you a site on a prime corner. Your instincts are telling you, “This is the property!”

Not only are the area’s demographics a great match with your target market, but the site is near several successful businesses with high foot traffic, and the property’s lease rate (or land price) is extremely attractive. You’re tempted to have your broker write a lease or purchase agreement.

Before you take this leap, it is critical you take a step back and answer some important questions. With a career focused on project feasibility, I have assisted owners in developing millions of square feet across four continents. Here are the five questions I recommend asking for every project:

  1. Does the site have underlying property claims?
  • Entities that predate statehood |Most owners and developers understand the need to investigate any rights and land ownerships granted to First Nations or Native Americans. Less commonly understood are rights granted to entities that predate statehood and may impact development rights. Overlying claims on a parcel may include those of agrarian districts, utilities or railroads. Ownership interests in water rights or mineral rights may also prohibit development.

View entire post here in National Real Estate Investor

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The death of big-box stores is speeding up suburbia’s slide into poverty

Commercial retail financing

Poverty has been creeping into the suburbs for the last 20 years, and the rise of online retailers could be making it worse.

According to a new book, “Places in Need: The Changing Geography of Poverty,” by University of Washington professor Scott Allard, American suburbs are facing economic hardship on a massive, if poorly understood, scale.

As of 2014, urban areas in the US had 13 million people living in poverty. Meanwhile, the suburbs had just shy of 17 million.

The Great Recession of 2008 helped accelerate much of the poverty that emerged in the early 2000s, Allard’s research has found. But another disrupting factor was the technological shift that enabled — and continues to enable — online retailers like Amazon and other e-commerce sites to replace shopping malls and big-box stores.

This ongoing demise has hollowed out many of the jobs suburban Americans once turned to as a means of supporting themselves.

View entire article here in Business Insider.

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What’s the Secret of a Successful Mall?

Converted Mall

Acadia Realty Trust and Washington Square Partners would prefer not to call their new Brooklyn development City Point a “mall.”

But, respectfully, it has all the trappings: There’s the large department store anchor—Century 21—which opened last fall. There are the nationally recognized retailers like Target and Trader Joe’s, both opened this year.

But two things set City Point aside from the shopping arcades of middle America that seem to be reeling right now.

First, there’s its food hall, DeKalb Market, which opened earlier this month. It’s not hawking Panda Express and Chipotle; Katz’s Delicatessen, which has stayed put on the Lower East Side since 1888 and never felt the need to venture beyond the neighborhood, launched its first-ever satellite at DeKalb Market. Likewise, the Arepa Lady of Jackson Heights, Queens whose praises were lovingly sung by New York’s food press for decades, has a stall. There’s the Vietnamese restaurant Bunker. And Ample Hills, the ice cream maker. And on and on. People who care about food will no doubt care about DeKalb Market.

View entire article here in Commercial Observer

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Pop Up Goes the Retail Scene as Store Vacancies Rise

Popup Stores

As traditional retail stores close and vacancies mount, landlords across the country appear newly receptive to leases as short as a week, eschewing the typical 10-year time frame, even in locations that once shunned limited stays.

The upswing in pop-up stores, as the short-term placements are called, is playing out in all sorts of ways, and in all sorts of places — including dark malls, former grocery stores and shuttered art galleries, according to real estate brokers, landlords and tenants.

For retailers, the stores can offer lower rents and far less commitment. For the landlords, the reason is just as clear: A short-term tenant is better than no tenant at all.

“Landlords have their backs against the wall right now,” said Samantha Elias, the co-founder of the Vintage Twin, a secondhand clothing company whose stores frequently pop up in Manhattan. “I tell them that some money is better than no money, and I promise not to bother you.”

View entire article here in New York Times.

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Store Closing Foreboding for Malls

Mall Remodels

A new research report from Fung Global Retail & Technology, an international think tank that follows retail and technology trends, uses hard data to outline what retail property owners and managers already know—store closing announcements this year have been off the charts.

Fung Global researchers found that year-to-date in 2017, store closing announcements in the U.S. increased by 97 percent year-over-year, to 3,296 locations. The majority of retailers closing stores are typical mall tenants—department store operators and apparel and electronics sellers. The chains with the highest number of announced store closings, for example, include apparel retailer Rue 21 and shoe seller Payless Inc., each with 400 closings apiece. Apparel chain The Limited comes in third, with 250 announced store closings.

Read entire article here in National Real Estate Investor.

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